Last week my sales team and I were discussing the nasty behavior from suppliers who answer the phone when we call for a stock check.
Calling vendors and sourcing product is an activity we are very good at.
The majority of our vendors are GREAT people happy to hear from us.
Then there’s the handful who act like they’re selling the last batch of gold that exists on the planet and we are lucky to have them on the phone.
Quite frankly, I don’t really care if a supplier mixes ego into the stock check activity because there is some entertainment value talking to a challenging sales person. If fact, our contract and original equipment manufacturers customers have made comments that talking to us is like a breath of fresh air.
Many just turn the sourcing activity over to us because…well…they have better things to do than talk to challenging sales people.
Our industry tends to attract the type of sales person that enjoys extreme sports and all night parties (although none of them work at Inland Empire Components, Inc.) This behavior can result in a cranky irritated stock check void of common courtesy.
Selling obsolete and long lead time electronic components is at times akin to running a stock brokerage.
Not that my partner and I have ever owned a stock brokerage but I’ve seen the Wall Street movies and Trading Places is one of my all time favorites.
Our industry is intricately tied to supply and demand. This can cause our phones to blow up with desperate customers being quoted 40 week lead times. Despite this fact, the industry has taken on some of the characteristics of the crashing housing market. (New houses mean new microwaves, televisions, refrigerators, and whole house communication systems).
As most of you know, the housing crash has caused a lot of people to get really cranky. That event coupled with the feeling of uncertainty perpetrated by the media just fuels the fire of the agitated sales person.
The fact is a circuit board redesign is a costly business decision so our customers keep us busy.
Any major interruption in the supply chain makes for frantic buyers and engineers. Like many industries, our market is made up of people with often conflicting agendas and goals. In our business, you have the end customer (buyers and engineers) managing critical and often obsolete component purchases. Their goal is to source product fast and product had better be new and original.
Contrast that with the rare but difficult supplier who thinks they are selling Rhodium. Parts that are being quoted by three other distributors at a nickel are quoted at seventy cents because the stockist perceives to have in their possession the only parts in the universe.
Here’s the problem with that philosophy. I know how many customers are on my list in any given year. I know what a customer is worth. The real money isn’t made on screwing the customer on a one time deal to make a quick hit. Fair honest dealings is not some old-fashioned notion. It is sound business advice akin to the laws of the universe.
The perception that business is “war” is acknowledged. That just hasn’t been my experience over the last 23 years. Granted, some of my competitors have made a lot more greenbacks than me. The majority of my competitors are also my customers so we have a dichotomy here. I sell to and buy from my competitors and they do the same. Really, I’m in one of the greatest businesses on the earth. We really love what we do. It’s never boring and like jumping into a fast-moving river full of rapids everyday.
The real money is made with relationship building resulting in back-end business. Let me give you an example of what I mean about backend business. Depending on the year we can have 1,400 plus customers buying from us. Applying the 80/20 rule of business (meaning we do 80% of our business with 20% of our customers)
results in our top customers placing multiple purchase orders year after year and some for 2 decades now.
Attrition happens, customers go out of business or change their business models so we continue to market our business. We don’t make the majority of our income from the 80%.
Still we can’t predict which OEM or CM will move from the 80% category to the 20%. We don’t know who will connect with us long-term because unless you’ve invested heavily in psychics, algorithms and data…market conditions change. Purchasing agents leave and get replaced. The new purchasing contact may hate us because we remind them of their ex-wife or ex-husband. They find another supplier that reminds them of their new girlfriend or boyfriend.
The value is made in the relationship. Will the relationship always be monetized? No. But that depends on how you define monetization. After so many people lost their houses, had their retirements raided and in my case, lost my daughter, the real monetization is in common courtesy.
It doesn’t mean we won’t stop working our tail off to provide the very valuable service we provide to our customers…supplying diminishing electronic products and asset conversion. And we certainly know how to hold our own against the most challenging suppliers in the business.
But we will continue to do it with elegance and value.
Ridiculous price jacking and outright offensive behavior because a supplier happens to have in their possession a line item that is being affected by supply and demand forces is short sighted. Prices will rise and fall on market conditions. That’s a reality in our very competitive business.
I’m not against making a fair buck. My customers pay for the value we bring to providing a solution to their problem. Typically the problem is their manufacturing will be interrupted if we don’t provide the product they need.
Basic common courtesy is always preferred in any business transaction.
Ironically, I traveled to Atlanta for a conference a couple of weeks ago and happened to be staying at the Omni CNN head quarters. I went on the behind the scenes CNN Tour.
Check out my pictures. Up on the giant screen in the food court was this crazy video of a bunch of extreme politicians from Greece. One of the men in the video got violent. Then the news turned to the question “Does Common Courtesy Still Exist in Politics?”.
Just the last two months I’ve traveled to Washington State, Georgia and New Mexico. I went to San Diego and San Fernando Valley’s Granada Hills. In every case I can say that Common Courtesy Still Exists in Business and fortunately you can find it at Inland Empire Components, Inc. .