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Real Issues Real Answers: The Vendor Advantage

Question 2

Please explain how your co-op, buying group and/or wholesale distributor works with you to keep you competitive (with product purchases, business services, etc.).


The Responses


“At our company, we look for suppliers that will bill through our co-op. That simplifies our payables, and earns us a rebate from our co-op at the end of their fiscal year. We also earn a rebate on all of the commodities that are purchased through our co-op. For this reason, we don’t have to write as many checks, we don’t have to fill out as many credit applications, and I don’t need a lot of buyers on staff. Our co-op acts as our buyers, and gives us a cash rebate on all of our purchases.”

“Timely information and rebates are the primary keys.”

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“Our wholesale distributor has restricted regions for the distribution of product. We are the retailer for our region, thus allowing us exclusivity to those products. This gives us an edge on our competition, as we sell a top-of-the-line product which we can tout as such.”

“I work with several wholesale distributors. Once I inform them of the scope of work, 90% will work with me on pricing.”

“Usually they don’t help, or offer to help much. However, if called on a big job they will sometimes help with better pricing.”

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“We participate in group buys and volume purchases. The minimum service fees that our buying group charges do not cut into profitability of the items.”

“We purchase most of our materials through Do it Best Corp. They keep us competitive.”

“The wholesale distributors and manufacturers that we deal with recognize that it is the small independent yards that really help to build their own business. They do a fantastic job of stocking materials that, for us, are special order only. They are also committed to regularly scheduling deliveries that we can count on for our homeowners and contractors.”

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“They provide us with deep market info, up-to-date insights on trends, roundtables with fellow dealers and training.”

“We buy direct when we can, usually billing through the co-op or buying group. Costs are cheaper when you take out the wholesaler.”

“Our distributor has a regular series of specially priced items that I can use to entice traffic in the store. Quantity discounts are also available.”

“They give the best prices they can. Sometimes lowering a price to meet the levels we need to be profitable.”

“We use Vendor Managed Inventory with most of our local distributors; sending realtime inventory numbers to our vendors that triggers orders for items falling below the ‘minimum.’ With some vendors, this happens every other day; others, once a week. During the recession, we worked with several of our distributors to offer commodity items on consignment, which allowed us to pay for materials after selling them.”

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