The relationship between a distributor and a supplier is critical to the health of a business. When the connection is good, both businesses prosper. But when the waters get rough, it can become complicated for distributors who depend on suppliers for their inventory.
As a distributor, it’s important to consider the value of your supplier partnerships from time to time to determine if the relationship is helping your business. The stress of day-to-day operations can make it challenging to see the situation objectively, and without taking a step back, you could miss some signs that it’s time to switch suppliers.
To help you recognize challenges in your supplier relationship, we’ve outlined several red flags. While these aren’t instant disqualifiers of a current supplier, they are indicators that the partnership may not be as effective as it could be and it may be beneficial to look elsewhere.
4 Signs It’s Time to Switch Suppliers
1. They’re Costing You Money
The most important question you can ask yourself regarding a supplier relationship is this: “Are they costing me money or are they making me money?”
It may seem simplistic, but the answer to this question can be quite enlightening regarding the health and value of the partnership. Every touch point a manufacturer has with a distributor is going to cost time and money, but effective and efficient manufacturers will ensure those invested resources create dividends for the distributor.
The delivery process is one example. A good supplier gives you visibility to your orders and communicates changes in a timely and effective manner. If there are any issues at all, their customer service team will do whatever is necessary to rectify the issue through an efficient process, because they realize that your lost time is lost money. If you aren’t experiencing this process, your relationship could be costing you money.
2. They’re Providing Unsatisfactory Service
As a customer, receiving less-than-stellar service is unacceptable. Yet, many distributors experience this situation with their supplier relationships but don’t fully realize it. Asking these simple questions can help pinpoint whether or not you are receiving the level of service you deserve:
- Is pricing accurate?
- Are fill rates as close to 100% as possible?
- Does the product consistently arrive without any concealed damage?
- Do they handle warranties in a fast, efficient manner?
- Do they provide thorough technical service?
- Are they easy to reach when there is a problem?
These answers can be incredibly insightful in the evaluation process and can be indicators that something is amiss in the partnership.
3. You Don’t Feel Like Part of Your Supplier’s Plans
Like most relationships in life, the partnership between a distributor and a supplier will have its ups and downs. In the beginning, when you are a new customer, you immediately feel the impact of the partnership with exceptional service, deals and meticulous attention paid to you.
However, if the business relationship becomes mostly transactional, that’s a potential sign things have taken a wrong turn. You may not feel like they care about your business or are ensuring your needs are being met. You may even start to feel like you’re just another customer and not an important figure moving forward in their partnership.
This is typically discovered as strategy sessions and the number of growth opportunities lessen over time. Eventually, it feels like the supplier has stopped building into the relationship, leaving you thinking, “I wish I was a new customer again.”
4. The Supplier Isn’t Part of Your Five-Year Plan
While you want to feel as if you’re a key component of the supplier’s plans moving forward, you also want to feel as though your suppliers want to be part of your future plans. If a supplier isn’t meeting with you to determine how they can best support your needs in the coming years, that signals a problem.
COVID-19 changed how business was done for several years, but with the bounce back to a more normal operating schedule, suppliers should be effectively managing your expectations as a customer.
As you are putting together your five-year plan, suppliers should be jumping at the chance to be an integral part of it, creating efficient and accurate touch points that offer insights into what’s new, exciting products coming out, upcoming changes in the industry and more.
If you’re having future business conversations and it doesn’t appear that your supplier is interested in being involved, that’s a sign that their business is moving on and it may be time for you to move on as well.
A Better Way of Doing Business
The GE Appliances Air & Water Solutions team never stops working for you. With 12 distribution centers and more than 170 local delivery networks, our capabilities allow us to quickly reach most of the United States, getting you what you need, when you need it. We give the purchaser the ability to view pricing and place orders, solving pricing accuracy issues. We also leverage our smart capabilities to ensure on-time and damage-free deliveries — every time.
Our company values are built with people — we value our partnerships, no matter how big or small the business is. Whether it’s our customers or yours, we are dedicated to serving the air and water industry through quality products, service and training. We empower people to solve problems more completely, simply and efficiently.
Want to work with us? To learn more about the benefits of partnering with GE Appliances Air & Water, fill out this simple contact form to hear from a member of our team.