Today i wanted to talk about your suppliers and the pro's and con's of dealing with the big chains against the smaller independents.
Big Chains Pro's:-
* Buying in large quantities - Big chains have the strongest buying power, if there is a large job and the big chain wants to beat the independent they will, if the items are like for like there is no chance for the little merchant.
* Suppliers Service - With the big chains they have a very strong and powerful relationship with suppliers when a contract is struck between the two, the big chains would have negotiated the best turn around and price and have separate and dedicated departments to negotiate these deals, i worked for a company where i wanted to order an item, minimum order value was £200 and if it was under there order value it would be a £15 carriage charge and would take 3 working days, i moved to a different and bigger company and the same supplier didn't have a minimum order value and delivery was next day if the order was placed before 3pm.
* Stock Levels - Stock levels in bigger merchants are usually better, the national merchants have an automatic ordering system, if an item runs out there system will generate a purchase order to replenish the stock, this isn't on every item but on the large majority.
* Larger base of suppliers - You can bet that the national merchant will have accounts with almost everyone, it means that they can get hold of almost anything you can think of.
* Complaint procedures - Company appearance is everything to the big chains, bad press hurts them more than most and if word gets out that it's not a great company to deal with, it costs them alot of money, this is why they invest alot of time and money into combating this, if a complaint is made and it's brought to the attention of there head office, it's taken very seriously and gets rectified within certain parameters.
* Locations - These guys are everywhere, all cities and most big town's, if there is a market and they can make money in the area they will build or lease a property to start up.
Material sourcing - It's always ethical, could you imagine the flak they would get if they used a company who didn't conform? It wouldn't surprise me with the size of these companies that they don't investigate each other, if it got out that they brought from India and the raw materials were mined by a one armed 4 year old child who gets 10 pence a day, well it's the image companies don't want to have.
Management - Most not all branch managers have had to have thorough training to get to there respected positions and it takes years, they have made presentations, sales plans, margin reports, man management training, they have been through the mill to get ready to run a branch.
Big Chains Con's:-
* Service - I was told when i worked for a large chain that the small to medium builders were bread and butter, they make there real money from huge sites such as the Olympic stadium and projects of a similar size, the branches don't even factor in these developments, all items are delivered direct, when a company has this attitude it's hard to trust them with your business, i wouldn't if i heard this statement but it all depends on who you deal with in the branch. Many times I've taken business off of other merchants because they have let the customer down, it may be down to deliveries not being done when they have been promised or just prices being inconsistent.
* Unorganised - This is down to the staff once again but it always seems to be the same story, when a national chain has a very busy and profitable branch it's very difficult for them to keep on top of everything, this causes many problems, overcharges on goods, credits not being done, terms not being set, site visits not being conducted, the list is endless but the large chains will never turn away business and this leads to them biting off way more than what they can chew.
* Greed - Always looking for more, targets to hit, bonuses to be had and it's all down to margins and sales, so many items within the shop floor are ridiculously priced and the unsuspecting customer just picks it up and books it out without batting an eyelid, well most items have a mark up of 60-80% sales margin and it's mostly the silicone's, screws, nails, ironmongery, building chemicals, dpc's, etc... a very broad range of items and the worst part? staff can't change the price, head office have put restrictions on the price so staff cant drop it.
* Staff levels - The big chains are always looking how to cut costs, the first thing to go is staff, labour costs in any field are the biggest budget eaters and it's no different in the merchants, think back if you have been dealing with your merchant for a while at what the staff levels were like when you first stepped into the place, My last merchant had 10 staff when i first joined by the time i moved to another company it was down to 6 within 18 months, sales hadn't dropped and margins were still high but because we were coping well the higher ups thought that we could cope with less, we did but boy did our service drop, i went from a confident, composed, organised and dependable salesman to a shaking, stress raged, bumbling mess, always letting people down and running around like a headless chicken doing hours that would make Henry Ford proud, it took its toll and i moved on, i couldn't deliver what i first promised anymore and i took most customers with me, luckily my customers knew the crack and still had faith in me when i went to pastures new, it's one of the reasons I'm doing this blog.
* Upper Management - Upper management loses touch with the customer and it becomes more about figures than the customer, branch managers get stuck between a rock and a hard place, they want to take care of there customer base but the guys up top want more, this takes it's toll on the branches, it's a cascade of bonuses and bollockings, there all chasing a big fat bonus but if there figures drop for there area someone is going to get a firm telling off, well if this happens the next guy under him gets it in the neck until eventually it runs through right to the bottom.
* No "I" in team - I spoke to another manager a few years back and he said this year was going to be tough as a branch had opened less than a 100 metres away "The company had bought out another company and changed it into the chain" i had never been in this situation but he told me that they were basically on opposite sides of the road from each other on a one way system and even though they were both the same company they were separate branches, customers used to go one side get a quote then run across the road to the new branch and ask if they could beat it....which they did! He was getting annoyed with this and contacted his area sales manager who looked after all the branches in the area and proceeded to say "Why are the other branch under cutting me?! were in the same area! it all goes into the same pot so why give it away for less?" his manager replied saying it was a grey area and that the new branch needed to become established.
First off apologies on just posting part 1, I've decided to break this into two parts as it's a long post and it would be easier to read it in two separate posts.
Part 2 will follow and will have the independents.
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