After a stressful few years, the relationship is back on a stronger footing.
Chain disruptions and labor issues led to a near-rupture point in the distributor-merchant relationship in 2021. The good news is that tensions have eased. **The merchant survey report said they retained more customers in 2022 compared to 2021, while distributors said the number of orders with errors decreased. Three-quarters of merchants and distributors report that they communicate well with their peers at the other end of the chain. An interesting dissonance? Traders say they are increasingly concerned that distributors will cannibalize their sales. Brian Duran, vice president of sales and marketing at Mediatree (ASI 70303), said, "Distributors are becoming a one-stop shop by purchasing décor fixtures or acquiring merchants. I understand it's good for profitability, but it's a gray area. This is what the ** business should have. ”
Is it friend or foe?
*What is the crux of the relationship between the merchant and the distributor? **Merchants reported in the survey that they felt threatened by online sellers. This year, the response of large ** merchants has jumped, and it is now at the same level as small and medium-sized ** business. Reasons include concerns about distributor direct procurement, consolidation of expenses with a small number of suppliers, and distributors offering services that compete with suppliers (e.g., decoration and kitting).
The percentage of distributors who purchased from more** merchants in 2022 was 53% compared to 2021.
On average, the merchant retained 72% of the previous year's customers, which is the highest ever recorded for SOI.
In 2022, 88% of the orders of ** merchants were delivered correctly. The previous year's rate was 84 percent, the lowest level in five years since counselors tracked this indicator.
During the challenge, our relationships with the best merchants became stronger. We've had a lot less out of stock, and now we can look to the future and strategize. ”
lisa hubbard, the vernon company(asi / 351700)
4 tips to improve efficiency.
Why is it so important to strengthen the relationship between the best traders and distributors? Because it increases efficiency, which leads to more business and satisfied customers. Here's how to improve your processes and communication.
Delegate back-office work.
*Merchants and distributors alike can save time and increase efficiency by hiring real people and/or virtual assistants to handle repetitive but necessary tasks such as checking inventory, confirming shipping addresses, and tracking order status. Brain Swift, President of Swift Incentives (ASI 490042), said: "You have to outsource as much as possible so that you can run your company more efficiently. Find a way to hire someone to help and integrate it into your business. ”
Consider overseas help.
SWIFT has a team in the Philippines dedicated to customer service for his Miami-based company. The key to hiring to be internationally competitive is to offer slightly higher salaries and more benefits, as well as comprehensive training. "There's a lot of room for improvement in wages," he said, "and invest more in employees so they want to stay." You don't want to have too much churn. We also have a loan program for medical expenses and other necessities. We will lend them money to meet their needs, and I have given my office manager the authority to do the work. ”
Implement automated systems as much as possible.
Lisa Hubbard, vice president of sales and marketing at Fortune 40 distributor The Vernon Company (ASI 351700) and a member of the Counselor Power 50 list, said thankfully the frequency of order errors has decreased and the backlog of orders has decreased. She says it's very helpful for merchants and distributors to use automation where applicable – such as internal workflows, order entry and status updates. Some vendors are even using robots in their warehouses to improve the efficiency of picking and packing. "Automate as much as possible, especially the back-and-forth between merchants and distributors," she says, "and let's work smarter, not harder." ”
Call for a second pair of eyes.
Brian Duran of Mediatree (ASI 70303) recommends a simple approach that doesn't require much additional input – CC to colleagues when communicating with clients via email. "I don't like having too many chefs in one kitchen, but I do like to send an email to another person for extra supervision and help. "If there's a problem, we can talk about it and fix it before we get back to the customer." This approach has helped me a lot over the years. The company has also changed the testing time – it is now four hours instead of 24 hours. "We've seen a higher response rate from distributors, we've found that errors have become faster, and it's easier for everyone to remember important details," he said. ”