Achi news desk-
Imagine the shock of seeing a supplier offering products they wholesale to you being offered to consumers for not much more than your wholesale price.
The shock turns to anger when it continues months later, with the supplier competing with you for Google ad placement. They can spend more as they have more margin to play with.
Their words of no we are not trying to take business from you a we just want to grow the market don’t land as you see customers you’ve cultivated for years switch to them.
As I said to one supplier representative, what they have done in copying our business and chasing our customers disgust me.
All of us in business have to put our needs before everyone else and that is what this supplier does. But the thing is, they get childishly upset when we reduce our commitment to them after finding a more valuable relationship elsewhere.
Maybe it’s just meh but it feels like in the early months of 2024 we have more suppliers going direct to consumers.
Some suppliers get it right. One I spoke to this week who was bidding on our business in advance said they were selling direct but at a price that was 10% higher than the suggested retail price he had on their items. What I liked even more was that their product, at their suggested retail price, gave us a gross profit of 62%.
This supplier is smart to structure their relationships with retailers and their own online offering so that it is a real win for supplier and retailer.
Not enough suppliers consider how to go about selling directly.
Some don’t publish it, they sneak around thinking retailers won’t notice.
Some use marketing spin to make it sound like retailers will benefit.
Some lazily copy what they see their retailers doing and refuse to acknowledge that they have done this.
Where the move is done poorly, ignorantly and/or selfishly, relationships understandably fall apart. Trust is challenged and retailers who do not trust a supplier will not want to do business with them.
All of us in business have to make decisions that serve our business and those that directly depend on it first. We need to be honest in our decisions and respect long-term relationships – if our decision involves change, we need to be honest rather than secretive.
In my own case, I have invested more in looking for direct supply relationships, from a manufacturer directly to us rather than through a wholesaler who controls a brand in the country. I am also happier working with suppliers who have no commitment to go direct to consumers.
Disruption is here to stay. Our role as business owners is to navigate this to our advantage.
