While I am not, and have not, been a distributor since 1971, I still get erroneous emails with offers to give me EQP. I am a supplier. I give EQP. What I get in return is the subject of my next column titled… Quid Pro Quo.
There are affinity buying groups such as Partner, Premier, Peernet. There are new groups and fee-based syndicates rounding up suppliers to participate and offering it to distributors as “members”. There are sales coaches and social media groups offering to get you EQP and “more”. I would say it is a widespread and growing effort. Every company involved in the production and sale of a given product is entitled to a fair profit.
In a sense, by setting your sell pricing every supplier is defining your profit potential. Our industry is unique and has always been under the watchful eye of the FTC in terms of price setting as we list “sell prices”. That is a no-no. They do not even read “suggested sell prices”. Check the federal laws and you will see that we “get away with it”. My hunch is we are too small an industry to be tampered with. Actually, that is not a hunch. I sat in front of the FTC in 1986 and they said so.
I have reviewed the videos from two organizations offering you EQP with selected suppliers. One has a fee but, you get more than EQP, you get training, etc. The other, seems to be a price grabber organization. I looked at the supplier list and saw many fine suppliers but far from all that a distributor needs today.
So, here is my question and my point of view. How do you use EQP? Is the best use to add 5% or so to your margins? In their presentations, these two organizations suggest you increase your profit by increasing your take. They talk about competing with “the big boys”. Time to become socially correct. At least two of the “big boys” are really “Big Homo sapiens”, the heads of quite a few are women (and it is about time). Yes, adding more profit to your given sale is appealing. If an “A” is not enough, you best check to see if your bookkeeper is stealing from you, or your math is poor, or your rent is too high. Please note that, in most industries, people who represent manufacturers to buyers make on average 5-15% of their gross sales volume. We do better, much better.
There is another way, I believe a better way, to use EQP and that is to increase sales. Use EQP to close, to compete. Smart EQP use should increase your overall earnings through increased sales. In this highly competitive sales world, in this distanced selling world, in this committee decision purchasing world, in this price check the bid before you buy world, we need any and every closing tool there is. A better price is an effective closing tool that can help an indecisive buyer buy from you. Getting a $1,000 sale by offering the buyer EQP is ultimately more profitable than not getting it at all.
In a majority of transactions, the buyer does not make decisions based upon price. Yes, a competitive price is important. If you are meeting the budget objective with the products /solutions you present, you have effectively removed price from consideration. Yet, price can be a factor if it is used as an incentive.
Everybody loves a bargain.
There is psychology in buying and selling by price. It is minimalized by creativity and relationships.
As in life, timing is everything. When to offer EQP is a strategic sales decision.
Here is how EQP can work most effectively.
Present your solutions to the buyer’s problems that satisfy his or her need.
Solicit further buyer input and listen for clues as to what has buyer appeal and buyer participation.
Qualify the buyer on order details. Probe deeper.
Use trial closing techniques and use the if /then approach.
Pat…. If I can get the order into the factory by next Friday, I can get the end column price and that will bring you in under budget. Perhaps we can add another component to the program. I’d like to write the order today.
Pat… The good news is that I called the supplier and spoke to their executive. They agreed to give us a better price. So, if we can write this order by Friday, your cost goes down and you save “x” percent.
Pat…This is a five-star certified manufacturer who has authorized me to offer you the end column price. So, we have the best manufacturer and the best price. Can I write the order now?
Hold EQP in your pocket. Use it to prove your value and to offer value without looking like a discount house of stuff. Using it this way proves your professionalism and the fact that you are, by definition, an agent working in the best interests of the client.
Next time I will address…Why Should I Give You EQP? in my Quid Pro Quo rant.
Joel D. Schaffer, MAS is CEO and Founder of Soundline, LLC, the pioneering supplier to the promotional products industry of audio products. Joel has 48 years of promotional product industry experience and proudly heralds “I was a distributor.” He has been on the advisory panel of the business and marketing department of St. John’s University in New York and is a frequent speaker at Rutgers Graduate School of Business. He is an industry Advocate and has appeared before the American Bankers Association, American Marketing Association, National Premium Sales Executives, American Booksellers Association and several other major groups. He has been a management consultant to organizations such as The College Board and helped many suppliers enter this industry. He is a frequent contributor to PPB and Counselor magazines. He has facilitated over 200 classes sharing his industry knowledge nationwide. He is known for his cutting humor and enthusiasm in presenting provocative and motivating programs. He is the only person to have received both the Marvin Spike Industry Lifetime Achievement Award (2002) and PPAI’s Distinguished Service Award (2011). He is a past director of PPAI and has chaired several PPAI committees and task forces. He is a past Chair of the SAAGNY Foundation, Past President of SAAGNY and a SAAGNY Hall of Fame member. He was cited by ASI as one of the 50 most influential people in the industry.