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Profitting from Small Dealer Relationships

18 Jan, 2001 By: Jim Intravia imageSource

Profitting from Small Dealer Relationships

If you are a small, independent dealer, one of your most important assets is
other dealers. They are often just like you and are quite likely to become
useful assets; they can lend you items for test & troubleshooting; give you
advice (business and technical); cover for you in certain situations (vacations,
busy times, health problems, etc.) Presumably, you will do the same for them
when they make the requests.

I have seen dealers who frequently offer help, always with the obligatory
“call me if you need anything”, as they are leaving. However, when called,
certain of them don’t return calls, or if they are pinned down, they are just
too busy to help right now. You might want to think back on your own situation
to be sure that this is not you. There are some who are “users” of other people,
and then there are some that are just passively inconsiderate. Needless to say,
those people need to be weeded out and shut out early. Let them sink or swim on
their own. My rule of thumb is simple. When they do that once, that is the end
of the relationship. Unfortunately, in many cases they have gotten help from me
5 or 10 times prior to that.

However, small dealer relationships can be excellent. It often takes two to
deliver a machine. A few friends and I help each other out like that regularly.
Occasionally, a second opinion on a problem; in person, at the machine, can make
a big difference. This type of cooperation also helps reassure customers that
dealing with a “one horse show” is not as scary or limiting as they have been
led to believe. Typically, each of us has our favorite type of machine that we
concentrate on. When your friendly local small dealer does the same, that allows
you to both cut your inventory in half. You both may choose to stock certain
high mortality items but the two of you can split other specific items. For
example: One stocks the exposure lamps, the other the heater lamps. Each lets
the other know to call him first so that he can move out the expensive inventory
instead of the other ordering from a supplier.

Business Advice

I find that there are a few of us who do this when necessary. An odd situation
occurs, and we ask each other what that person would do. Some examples:

1. Really good customer for a long time is paying slower and slower and letting
people go. What would you do in this situation?

2. Customer has not and probably never will pay for a very large repair. What
would you do in this situation?

3. Customer abandoned a machine at my shop and I threw it away. A year later
they want it back. What would you do in this situation?

4. I have a chance to become authorized on such and such. I need to come up with
$100K, which I can borrow. What would you do in this situation?

All of the above are situations that I have been in, have asked others for
their opinion and/or have been asked these questions. Of course there are many
more. Every businessperson has or will have their share of situations that are
relatively unpredictable, or at least outside the norm. We can each handle our
own, or we wouldn't be doing this. However, some of the solutions (when there is
one) are not so obvious. Another dealer may be better aware of the consequences,
or may have more experience with the legal system.

Example 1: A customer does not pay for an item (let’s say toner), and six
months later, you go back and take the toner back. Are you aware that you can be
arrested for stealing? They bought the toner. The fact that they did not pay for
it yet does not mean they won't, nor does it allow you to “take the law into
your own hands”. If you go before a judge, he or she will tell you that you need
to use legal means to get your money, but you cannot just take their property.
However, as a businessman, I can tell you that, legal or not, I have done this.
I took my chances, knowing what the consequences could be. That is your
decision. My decision was not necessarily a good one, but that was my choice.

Example 4: My first chance to be authorized came about in 1985 or so. A
more experienced dealer talked me out of it, and I did quite well for the next
year or two. A year or two later, I decided I was now too smart for his advice,
borrowed the money (way less then; about $15K), and about two years later found
myself authorized, in debt, and close to bankruptcy.

Experienced VS. Inexperienced

In many cases, the two dealers are many years apart in these areas. Obviously,
the younger dealer is more likely to need business advice. It often works out
that the young one has something to offer in exchange; technical expertise,
brute strength, willingness to do things the older dealer won't. This may be how
the inexperienced dealer returns favors. The old-timer might need physical
assistance (us old guys have things like hernias, heart conditions, and
arthritis). Often, the younger dealer is more enthusiastic about tackling
certain machines or problems than the older one and can help in this way.

Smart Vs. Stupid

Sounds extreme but lets call a spade a shovel. There are some people who need
all kinds of help constantly. They just don’t seem to be able to handle anything
on their own. If you are one of them, I have nothing to say except; Sorry. If
you have one who leans on you all the time, you have to handle it somehow. If
the individual can help you in some ways, fine. If they are of no use
whatsoever, then you have to make a tough decision. You have to let them know
that you don’t have time for their problems; you have your own to solve. If they
really need your help, you can treat it as a service call, but you will have to
charge them because your own business is suffering. Sounds hard nosed and cold.
It is. That’s me. Maybe its not you. Maybe you will just pretend you can't help,
or forget to return a call. Your decision. Be honest about it, or don’t. Let
your time be used up, or don’t.

Not all things are black and white or strictly business. Sometimes, you can
just be nice to someone, with nothing to gain. Just try to be nice to people who
deserve it.

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