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Question Of The Month
By: Staff
Issue: 2008may

A DISTRIBUTOR ASKS:
“My company received a large order for a product from a retail brand whose policy is to sell solely through promotional products distributors. I placed the order, only to receive an irate phone call a few weeks later from my client who was mad because of my high pricing. She faxed me an invoice she had paid—it was directly from the retail brand.

I called the retail brand rep who said it was not possible for my client to have received the invoice. After faxing the invoice in question and several phone calls later, the rep told me that the company also does business with Fortune 500 companies directly, but that the invoice should have come to me rather than my client. I lost the client because the retail brand would not apologize for the invoice mix-up. What would you do to keep this from happening again?”

JEFF HOLT
VICE PRESIDENT, MARKETING
IMAGE SOURCE, INC.
UPIC: IMAGESCE
It’s great that you have such a strong customer relationship, but trust can erode after a series of seemingly benign mistakes. It’s time you took steps to protect your reputation and changed suppliers—at least for this project. Select a trusted supplier, get a rush proof and take the hit on set-ups, rush costs and expedited freight. Let your customer know the steps you are taking to fix the issue, and at some point address with the first supplier how you can get back on track. After all, trust is equally important at all phases of the supplier/distributor/end-buyer chain.

GRAYDEAN LAUGHTER
CEO
PROMOTIONS ‘R’ US
UPIC: PROIMAGE
It’s understandable to be upset—you have become a two-time loser. You lose the profit and the customer, which is the worst that could happen. I had the same thing happen to me when a supplier sent the product to my client COD. The client, expecting the product, paid the COD amount and called me. It was pleased with the product and the imprint but thought I would send the invoice like usual.

The amount invoiced by the supplier was my net. I explained to my client that this was unusual and apologized for the error. My client was ultimately happy. I never mentioned the amount or that it was invoiced with my net.
When I explained what happened to the supplier, the president apologized and mailed me a check. I didn’t make the normal mark-up, but I have a happy customer and a better understanding with the supplier.

In the future, if I know the supplier sells direct, I will try to find the product (or something equal or better) from another suppler. If this is not possible, then I will have the product sent to my office and I will deliver it or ship it from my address.


TIM HANSON, CAS
PRESIDENT
BALL PRO PROMOTIONAL GROUP
UPIC: SPORTS
We have one more layer in our distribution channel than the golf industry, thus creating price issues and channel confusion.

Theoretically, Titleist, FootJoy, Nike, Wilson, Callaway and TaylorMade do not sell direct. However, we have seen throughout the years that they will make a direct sale to a PGA or LPGA golf tournament corporate sponsor. We have also seen sales where a relative of a board member is the president of a Fortune 500 company and makes a deal under the table, making everyone look stupid.

It is important to know your customer and what it wants prior to making quotes. More than 90 percent of all our large quotes end up going nowhere. Our industry is in the solutions business—not the sale of products. It just so happens that our solutions include products. If you are selling solutions, you will rarely run into this issue.

DANON MIDDLETON
COO
TANGO PARTNERS
UPIC: TangoP
Saving the client relationship is most important. Request that the retail supplier provide a credit equal to the difference between its invoice and the price you quoted to the client. Offer this credit to the client for future orders with your company, as it might save the relationship.

The question is how to protect the business going forward when working with retail brands. Unfortunately, it’s a brand-by-brand opportunity with no guarantees. A possible solution is to do more in-depth research before using a retail brand to make sure you understand its billing policy. And then include a paragraph on the purchase order stating that the invoice should be sent directly to the bill-to address as stated on the purchase order and that if an invoice is sent directly to the client (the ship-to address), the distributor will be compensated the value of the commission.

REMY FENSTER
OWNER
RJF MARKETING
UPIC: rjfmkt10
Unfortunately for the distributor, this is a case of mistakes happening. The bigger issue, however, is that the supplier refuses to apologize or help rectify the situation. The best answer is to not do business with this supplier.

A DISTRIBUTOR ASKS:
“From a compensation standpoint, how do distributors determine a fair pay schedule for salespeople? Do they use a commission scale alone, or do they include benefits, expenses and other perks as well?”

WHAT’S YOUR ANSWER? E-mail answers along with your name, title and company name to Question@ppai.org by May 30 for possible inclusion in the August 2008 issue of PPB magazine.



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