Distributors and suppliers are both working towards the same goal, so what’s stopping them from working together?
DealTrack Blog — Supplier collaboration
The rise of Amazon Business has distributors rattled. To compete, distributors should focus on the things Amazon can’t provide—using the Deal Economy as fuel.
We learn about collaboration from an early age. As children we quickly learn that we need to collaborate with teachers, classmates and team players in order to be successful. "There's no 'i' in 'team' is a common mantra in sports and work teams. And "supply chain collaboration" has been a hot topic for decades.
Despite that, there are very few systems that enable wholesale distribution companies and their suppliers in the building materials sector to truly collaborate on their trade agreements.
Topics: Supplier collaboration
The phrase win-win is probably over-used, but I am going to use it anyway to describe the situation where both parties come out of a negotiation feeling like they have won. Let’s be honest. If you think you won and the other party (your supplier or your customer) feels they lost, then it’s not really a good situation.
Price is important, but (particularly in industries like building materials distributors and grocery retailers where margins are tight) time to market, supply chain reliability, innovation, quality and flexibility are elements that contribute significantly towards a company’s competitive edge.
Vendor monies that support reseller sales are big business. US-based research conducted in October 2018 estimates that, at top performance levels, distributors, dealers, and retailers use $600+ Billion (USD) in vendor funds. Projections from the EU find that approximately €500 Billion (EU) in vendor funds are similarly spent.