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I spoke with a contractor prospect the other day and asked him where he bought his stuff. He said he bought his wood from a local branch of a national wood flooring clearinghouse, his sandpaper from a local converter and his finishes from Home Depot. I asked him if wood floor contracting was his full-time business, and he said, "Yes, 10 years." I couldn't help myself: I asked him, "If you are a pro, why do you buy like an amateur?"
Why Distributors Help
These are tough times in the wood flooring business, and we are all trying to get through to the other side as best we can. As a professional contractor, there a several ways you can benefit now and make sure the relationship you have with your professional distributor gets better.
Your local wood flooring distributor has the training and relationships with top-flight manufacturers that get you access to the best products at the best prices. These aren't mutts and strays. Don't be fooled into thinking that because you are cutting out the distributor you are getting the best deal. The best distributors get to pick which lines they will carry, and there is fierce competition between distributors over who sells what. You benefit when your local distributor gets and develops these lines. Your distributor buys better and builds stronger manufacturer relationships, and you get the best pricing and support. Having a distribution partner who will represent you to the manufacturer gives you the best shot at getting help when something does go wrong on the job. Everybody wins when the system works the way it should.
Great Opportunities
In these challenging times, your local distributor is hungry to grab as much of your business as possible. These are great opportunities for contractors to buy materials at prices we might never see again. This slow season won't last forever, and you want to be careful that the deals you make today are good for you and your distributor. A solid partnership will serve you now and going forward. You need your local distributor today, and you will really need them down the road to get what you need, when you need it.
Here are some tips to help you maximize your current profits and build a stronger relationship with your distribution partner.
1. Paying up front can get you deals. Distributors are keen to turn existing inventories into cash. A sale is great as long as it results in a receivable that pays in a timely manner. Cash is king, and you might be very surprised at the pricing you can get if you are willing to make a big buy and pay the bill right away. If you are the guy who pays late every month or has to be chased for the money, don't expect to get the deals.
2. Don't be afraid to ask what kinds of deals are available. It's not insulting to ask your distributor to make you a better deal. We are looking for opportunities to make additional sales. Manufacturers are offering us deals, as well. Just be careful that you don't step over the line and appear to be taking advantage of the situation. A little give-and-take is healthy, but distributors will remember who jammed them when this economic crisis turns.
3. Stock up while you can. I believe we are heading toward a period this year where it will become difficult for all of us to get supplies that were stock items last year. I predict there will be shortages as soon as this summer on products that have always been in stock. If you can save 10 percent by buying now and using the stock in the next few months, that's a better investment than anywhere else you could put your money right now.
This is my fourth recession in this business, and just as day follows night, things will get better … soon. Be the company that plays it smart, and you will be the big winner next year.