How to deal with your suppliers

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peter d

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New England
The third page of this thread got me thinking about getting good prices and treatment from suppliers. Since I briefly worked for a supplier, I have a good inside track on how to get good service and treatment from a supplier. I'm sure some of this is old hat to a lot of you but hopefully someone will find the info useful. :)

1) Whether you are a one man shop or a huge company, the key to getting good prices and service is to deal with one or more inside salespeople. Establish a relationship with them and have them come out and see your shop or office. They will make weekly trips by to take your order if you so desire.

2) If you're the kind of guy that just like to buy over the counter, then establish a rapport with the counter salespeople and store manager. Learn their names, treat them as you would want to be treated, and don't always moan and groan about the prices. They don't have any control over it in most cases. (More about that later.) If they see you on a regular basis and you aren't always calling the stuff they sell "junk," they will bend over backwards to help you.

3) Deal with one or two main suppliers, instead of trying to get the deal of the moment from everyone in town. I can assure we knew who shopped around and we knew who the loyal customers were, and I can assure you those two types of customers are in different pricing columns.

Now, we knew that certain customers liked to buy certain items from competitors because they carried brands that we didn't have, like our switchgear and wiring devices, to name the main ones. That wasn't a big deal because they were still regular customers.

4) Don't think buying material at box stores will count against you. We didn't hesitate to tell our customers to buy wire there because we knew it's cheaper and we knew, for instance, that our customer was trying to bid a lot of new homes and needed a good price. Many times our pallet price was still higher than the competition so we flat out told them to go elsewhere if it was for their benefit.

5)Prices are often times out of the control of the counter people or manager, but not always. We always had the power to cut a price or make a deal for a volume buy. Remember, the more you buy, the more you save. If I ever had a question about a price, I would go to the manager and he would tell me to cut the price or just tell the customer to go pound sand.

Don't be afraid to ask for a package deal; you might be surprised to see what happens. I'm not talking about 3 switches and 2 light bulbs, but if you put a nice list together to quote, you might be very surprised.

6) Attitude is everything. There were certain customers we loved dealing with, and some who we couldn't wait to get out the door because all they did was complain the whole time.

7) The worst customers are as follows:

a) The ones who moan and groan about every price even though they are charging the customer for the material.
b) The ones who don't pay their bill on time.
c) The ones who just plain moan and groan and are rude to the salespeople and other customers.
d) The hit and runners who are always looking for a deal and saying "I have a big job coming up" up and then are not seen again for several weeks or months.
e) And of course the ones who were know to have fast fingers especially around the tool wall.

Anyway, I hope this helps. I could go on and on but those are the main points. Please add to the list if you can. :)

[ August 28, 2005, 05:16 PM: Message edited by: peter d ]
 
Re: How to deal with your suppliers

d) The hit and runners who are always looking for a deal and saying "I have a big job coming up" up and then are not seen again for several weeks or months
Peter: How about the variation in this one...
"Sell this to me based on the price of 100 units..I expect to use that many, but I only need 1 right now" :D

[ August 28, 2005, 05:26 PM: Message edited by: augie47 ]
 
Re: How to deal with your suppliers

I'm puzzled why I should have to be nice to get a fair price or good service. I always am, but why should a jerk or a price shopper have to pay more?
 
Re: How to deal with your suppliers

Originally posted by mdshunk:
I'm puzzled why I should have to be nice to get a fair price or good service. I always am, but why should a jerk or a price shopper have to pay more?
Many suppliers use a "matrix" system for pricing. It keeps track of volume, and those that price shop usually have lower volume because they are spreading out over many suppliers, and thus don't get into the good price columns.

As far as being nice or rude goes, the price that comes out of the computer is the same for both. But when quoting job lots, special orders, or other things when the saleperson has a degree of control over the price, you can be sure that the nice guy is getting it for 15% over cost while the rude guy is getting it for 25% over cost. Like it or not, that's how it works.

Do you like dealing with jerks day in, day out? I'm sure you don't, and suppliers don't either.
 
Re: How to deal with your suppliers

Treat the supplier like you would like to be treated. Treat them snotty and be treated snotty, treat them like they know quite a bit and then they will almost always bend over backwards to give you the correct information you need. I need my supply house to be kind efficient clean and well stocked which they are and I appreciate it.
 
Re: How to deal with your suppliers

Depending on the market you are in, no matter what you do, Lowes and Home Depot may still beat the supply house price.

Reason being, they by certain items by the truck load, not the pellet like a supply house.

The only advantage you have on a supply house is that you can call ahead and have it ready and quicker times on a walk in. However, for basic items, you can simply go once a month to Lowes or HD and fill your truck with basic items, stock up and save some money. I know ECs hate them but they will blow away supply house prices in a lot of markets.
 
Re: How to deal with your suppliers

I would tend to agree with most of what was said. However, the key guy in getting better prices is almost never the guy manning the counter. He has very little say in what is charged.

The account managers do have some say, and if there is a reasonable volume involved, they can do some really good package deals. They love doing them, it's something in their soul I think.

I am often amazed at the prices that come out of some of these deals. And we are not talking 7 figures here. A good rapport with your account manager for someone who spends as little as $100,000 a year on parts (and even a small EC will probably be close to that) can find amazing deals if they talk to the right guy.

I would not worry too much about price shopping. These guys often make very little margin on the kind of stuff you are likely to find at HD anyway.
 
Re: How to deal with your suppliers

The danger to being too loyal is that your prices may tend to trend up when you don't comparative shop.

I think it is a natural tendency to "tweak" the price up if you don't think you have competition.
 
Re: How to deal with your suppliers

Originally posted by hardworkingstiff:
The danger to being too loyal is that your prices may tend to trend up when you don't comparative shop.

I think it is a natural tendency to "tweak" the price up if you don't think you have competition.
I believe it is possible to be loyal without getting the prices turned up on you. I deal almost exclusively with two supply houses (which one I use depends on what state I'm working in.) But, periodically, I will run a take off for an entire project, set it up as a package and put it out to 4-5 supply houses. I also periodically compare prices on large ticket items. My key suppliers know I do this, but they don't know when I am doing it. This seems to keep them honest.

On a side note, I've found that when I package an entire project (8-10K worth of materials) all of the suppliers generally fall within a couple hundred bucks of one another. If everything is that close, I'll go with the guy who gives the best service even if he isn't the cheapest.
 
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