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Suppliers, wholesalers: allies or adversaries?

Aug. 1, 2011
If you look at your suppliers as adversaries, or have the opinion that they are all trying to take advantage of you, you are missing the big picture. Everyone is trying to stay in business and make a profit.

Symbiosis (symbiotic): a cooperative, mutually beneficial relationship between two people or groups.

How do you think of your supply house? Is it a place where you pick up a few parts, grab a donut or a soft drink, and shoot the breeze with your fellow craftsman? Is it where you get quotes on fixtures and trim when bidding a job? Is it the place you "love to hate" when prices go up and you need that material right now? Or is it all of the above and more?

Let's start from the fact that both you and your supplier/wholesale house are in business to make a profit by selling something. In your case it is the labor, material and expertise to install and/or maintain plumbing or mechanical systems. In your supplier’s case it is the material, tools and equipment needed for those systems.

You are the client your supplier is trying to woo, just as you pursue work from general contractors or the public. Toward that end, the supplier/wholesaler usually assigns a sales representative to your account. The representative's job is to get you to buy your materials from his company. He does this by keeping open lines of communication with you and by trying to give you competitive pricing on your material needs. If he is a good salesman, he'll try to keep you informed as to upcoming projects, changes in the industry, whether it is new products or possibly changes in local code, and maybe a few unfounded rumors too.

Ally or adversary?
If you look at your suppliers as adversaries, or have the opinion that they are all trying to take advantage of you, you are missing the big picture. Everyone is trying to stay in business and make a profit. No one is going to stay in business very long in these economic times by gouging his customers; whether it’s you or your suppliers or sub-subcontractors.

When preparing estimates for projects or establishing product pricing to retail, it is common practice to get multiple bids from different suppliers and then selecting the lowest bids. While this method is common, it is sometimes not the most effective way to get the best deals.

In the first place, many suppliers use loss leaders to give ultra-low pricing on some common products while raising the pricing on peripheral materials to cover the shortfall. In the second place, if you are constantly looking for the lowest price on any given item(s), your suppliers will take note of your loyalty quotient (or lack thereof) and price you accordingly. If all you are using your supply house for is low pricing, you are missing the boat by a mile. Wholesalers have a great depth of industry knowledge, not only on materials but on technical data and upcoming trends or changes that could give you the edge you need to be successful on a project or two.

If you've been in the contracting business for a few years, you know how galling it can be for a general contractor to always go with the low bid even if that low bidder can't do the job for the price quoted. How do you feel when a general with whom you have had successful projects comes to you and negotiates a job with your company? You feel pretty good I'll bet. Your suppliers feel the same way.

Aren't you apt to do a few extras for the general that negotiates a project with you because he wants you on his job as opposed to the low bidder? Don't you look more favorably on that general contractor? Put yourself in your wholesaler's shoes. Working with your supplier on a project as a valued partner brings large dividends to both of you.

Instead of playing one supply house off another to save a few pennies on a copper 90°, try a different approach. If you do a detailed takeoff for a project, how about presenting that takeoff to your supply house sales rep and ask him to price it for you, line by line. In exchange for his efforts, and as an incentive to get the best pricing, give that supplier the material sales for the entire project if you win the bid based upon his takeoff. By making that offer you are telling that rep, and by extension that supply house, that you value them as a team member and that their efforts will be rewarded should you be the successful bidder.

This method only works if both parties are honest and above board. If the sales rep peddles your takeoff to one or more of your competitors it will obviously be the last time you'd be likely to trust that person. Likewise, if you shop the rep's numbers to other suppliers in order to force a lower price, you aren't being too honest either. It all comes down to integrity and taking a calculated risk for a greater reward. Heck, you’re in the contracting business aren't you? What greater risk is there today?

The Brooklyn, N.Y.-born author is a retired third generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached at [email protected].

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