Are Suppliers from Mars & Distributors from Venus?

John Gray’s best-selling 1992 book, “Men Are from Mars, Women Are from Venus” postulated men and women seem to be from different planets given the fundamental relationship differences between them. In our industry, the symbiotic relationship between suppliers and distributors is very similar. Without suppliers, distributors would have nothing to sell and without distributors, suppliers would have warehouses filled with aging inventory. 

I was on both sides of this business for 35 years and worked with suppliers who were amazing and those I vowed to never work with again. The same is true of distributors. While the supplier-distributor business model changed radically with the advent of the Internet and easy access to foreign manufacturing, it’s still how most companies do business in our industry.

So what does a good relationship between these two groups look like? Can Mars and Venus come together in a business relationship that is mutually beneficial? I believe these five things are crucial for that to happen:

1. Build trust: Both sides in a partnership must trust the other to do the right thing and be ethical and honest in all their dealings. If a company you’re working with says they’ll handle something, trust they will follow through and keep their word. A partnership is a collaboration, and trust ensures that collaboration will endure and be mutually beneficial. Trust can’t be taken for granted and must be nurtured. Trust may very well be the most important aspect of any partnership because without it, there is no foundation to build upon. 
2. Build a partnership: Often, when someone says they want to “partner” with you, what they mean is they want all of the benefits without giving anything in return. Distributors have come to think of EQP (end-quantity-pricing) as a Constitutional guarantee rather than something to be earned. Suppliers should be willing to offer deals, payment terms, and possibly EQP in return for a distributor consolidating their sales for each supplier partner’s range of products. If I ask for something from a supplier, I expect to give something in return. Being a partner is a two-way street, and if not, then there’s really no partnership at all.
3. Communication: There is a time for emails and a time to pick up the phone and talk things out. Good partners know the right time for each. Often people hide behind emails when picking up the phone can solve a problem or ease concerns much more quickly. When you have an issue or a question, pick up the phone and work it out or, if possible, meet face-to-face and then send a follow-up email with the details of your meeting. A lack of communication can lead to assumptions, which may be totally wrong. Knowing where you stand and sharing feedback regularly is the key to strong, long-term relationship.
4. Deliver on Time/Pay on Time: Developing and keeping business relationships depends on both parties holding up their end of the bargain. Suppliers need to deliver their goods and services on time and distributors need to pay the invoices on time. Given the inventory challenges these days, it’s imperative to understand production times prior to ordering, as well as payment terms. Goodwill and trust are essential to long-term business relationships. When extenuating circumstances arise, communicate ahead of time to ensure there are no surprises (see #3).
5. Look to the future: Our world changes fast.  And while a supplier or distributor might be a good fit for each other today, tomorrow may be a different story. Ask about the future plans of your partner:  are they developing new products, sourcing new factories that could reduce costs or production time, growing their business organically or through acquisition? Always be open to new opportunities while keeping in mind the grass always looks greener on the other side. Relationships must change and morph over time to stay vibrant, to stay competitive, and to make financial sense to all partners.

Our business model is similar to many other industries, but very unique in one way. Before the Internet, the unwritten rule was suppliers in our industry only sold through approved distributors and distributors only bought from approved suppliers. More and more though, suppliers are setting up discrete and sometimes not-so-discrete business units that sell directly to end-users and distributors are importing directly from manufacturers outside our industry. 

Has the model we’ve relied on for decades become obsolete? The world is a different place now, and changes come at breakneck speed. Dozens of industries have been disrupted and forced to change how they do business almost overnight while ours has stayed relatively stable. Is it still possible for Venus and Mars to align and create a true partnership where business strategy, values, long-term goals and visions are the same?

I believe it is; however, it takes more work than it used to and it takes a commitment from both sides to trust, to communicate, and to be willing to change as needed to keep the partnership strong. As media tycoon Rupert Murdoch noted, “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” 

Work with partners you trust, but understand nothing lasts forever. You must be willing to adapt and change your business model as our industry and the world changes if you want to stay relevant and, more importantly, grow your business.  

Just as men and women have managed to co-exist over the millennia, so too can suppliers and distributors build relationships that are a win-win.