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Distributors’ perspective: Lessons for the future

by Jack Lindenschmidt

Where is your company at right now? Enough has been written about our recent economic woes and collective belt-tightening. While we are not out of the woods yet, this is a good time to review what we’ve been through, what we’ve learned, and how that will help us in the future.

Lesson one

Did you gain a better appreciation of the people in your company? While a rising tide floats all boats, a sinking ship sends the rats scurrying. I suspect you have a better appreciation for those in your organization beside you today, and also learned a few surprising things about those no longer present.

Lesson two

Did you learn to appreciate inventory? In tough times, plentiful inventory in the channel—when plentiful means way too much—gives way to shrunken inventory. You may ask, “How can we sell when nobody has anything?” You can sell, and we are selling. Excessive inventory situations disappear in tough times, but sales do not. Plan better, don’t assume, and don’t over commit. Reliability on business partners takes on new meaning in tough times.

Lesson three

Have you come to appreciate good sources in the supply chain? Retailers who found themselves in business relationships with suppliers who were less than solid are now either gone or seeking better suppliers. The caliber of distributors in the North American Association of Floor Covering Distributors (NAFCD) have proven time and again to be the kind of business partners that retailers and manufacturers can rely upon in good times and bad.

Dependable, reliable

Distribution companies have proven to be as valuable in tough times, if not more so, to manufacturer partners and retail customers. Ironically, it is quite the opposite of how many view them. As lines of credit tightened along with inventory positions, NAFCD distributors were there to navigate issues for all participants in the sales channel, and will continue to be there in the future.

Distribution is a necessary, vital service which adds value without bloating prices. The slim margins that distributors earn do not result in lower price tiers to retail or consumers if product comes direct. In situations where the channel has seen a change in how the distribution function serves the market, prices have not dropped appreciably. The costs of selling, shipping and servicing product are still there, regardless of which upstream or downstream channel a member might assume. They don’t go away if they are moved—they’re just moved.

Why not trust the most knowledgeable and experienced people in the industry with the burdens and challenges of distributing product? Distribution companies get it—at least the good ones do—and NAFCD attracts quality, experienced distribution companies to its association. When you deal with NAFCD distributor members, the best out there are at your disposal, both in good and bad times.

The ebb of the economic tide has stemmed, and we can anticipate a flow once again. As we prepare for the upward turn in business, hitch your wagon to winning survivors who can help safeguard you in the next downturn, whenever it comes. Retailers who do business with NAFCD members know they have a reliable business partner who will deliver the highest value to their retailers and consumers, in good times or bad.