Panel Agrees Distributors Are Not Dinosaurs

April 1, 2000
Trip Forman occasionally hears end users asking, "Why do I need a truck-equipment distributor? Why should I pay a middleman?"Forman, president of Pick

Trip Forman occasionally hears end users asking, "Why do I need a truck-equipment distributor? Why should I pay a middleman?"

Forman, president of Pick Up Pals Inc in Lubbock, Texas, tries to explain it to them by comparing the grocery store's role as distributor. The customer, needing a bag of chips to munch on while watching a football game, goes into the store and makes his purchase. If the customer were to shop for that bag of chips at a truck-equipment distributor, he'd walk in and see a griddle, a bag of potatoes, and a bag of corn. The customer would ask for a bag of chips and the distributor would say, "Do you want corn chips or potato chips? Do you want baked or fried? Do you want salt or seasoning?"

Concluded Forman, "As truck-equipment distributors, we bring a myriad of questions to our end consumers to try to customize that equipment to suit them the best."

Is the distributor a vanishing breed? That's one of the issues Forman and four panelists dissected in "The Role of the Distributor in Adding Value to the Sales Process." Attendees asked questions about the Internet - its power and potential to diminish the relevance of the distributor.

The consensus of the panel: It isn't going to happen. "I'm going to go out on a limb: I don't think direct buying is ever going to put distributorships out of business," said Ron Collins, president of Collins Associates Inc in Cincinnati. "The definition of a distributor may change, but he still has to be there. This is not a system like Home Depot.

"I have a company that manufactures truck cranes. Some of my biggest customers are manufacturers of utility bodies. These people go directly and take the big bids, make the bodies, and mount the cranes. They're easy to install. These people are my really close friends, so they wouldn't mind me saying this: They can no more fix my crane than they could flap their wings and fly. I cannot count on them as the seller to service the product, and it's something I must approach and find an answer for in this new wave.

"I think we are different. I think we are very different. And I think our distributors are going to be around for a long time."

Collins said distributors tend to look at the Internet as a monster that is going to put them out of business because people are going to sell direct, which he says is "just plain not the case." He called the Internet "the most valuable electronic catalog we could possibly have."

E-Promotion Collins encouraged manufacturers to use the Internet to disseminate pertinent information - new products, features, pricing - and to communicate with distributors so that time won't be wasted through incessant faxing and invoicing. He said he envisions the Internet helping to sell "more products" in the coming year.

Forman said the Internet saved him $500 a few days before the convention. A customer downloaded a photo of a cracked service-body bed and Forman concluded his company had been at fault. Instead of driving four hours from his Lubbock base, he called thecustomer and said, "When do you want to schedule it?"

"As a sales tool on a complex purchase like a rigout from truck distributors, I don't think the Internet's ever going to be a final selling tool," he said. "I think we'll trade information, just like the fax. It's a huge catalog. It's a tremendous resource piece."

Peter Jones, president of Crysteel Manufacturing Inc in Lake Crystal, Minnesota, said that if he were to eliminate the distributors of his products, he'd have to hire 1,200 sales people, contract with 300 welding shops to provide service, and then enlarge his corporate office. Distributors offer the advantages of inventory and local knowledge of industry nuances.

Remaining Relevant Todd Whitehead, president of D&H Truck Equipment in San Diego, said distributors will remain relevant as long as they continue to provide personalized service. They know the Federal Motor Vehicle Safety Standards. They can help the customer to define his wants and needs. They can package a series of products to meet those wants and needs. It's up to the distributors to steer the customer in the right direction.

"We have a story in our store," he said. "We have a customer who comes with a Ford Ranger and wants an 8'x12' flatbed installed. We joke about it. But the reality of that situation is very real.

"The responsibility is ours as distributors to understand what we can do and what we can't do. The ones who don't conform put a black spot on the rest of us. It's imperative that the quality houses step forward and make certain that they conform and that we don't put 8'x12' flatbeds on Ford Rangers."

Peter Vanderlinden, president of Caytec Equipment Ltd in Calgary, gave an example: A customer will come in and say he needs a crane. Asked what he wants to lift, he'll say: "5,000 pounds at 25 feet." Asked the size of his truck, he'll say: "One ton."

"Then we give him the option: Scale down the crane and keep your one ton or buy a bigger truck," Vanderlinden said. "That's what we provide to the end user."

Warranty is a Key Distributors also provide the valuable commodity of after-market support for warranty, maintenance, and repair services. They continue to serve their customers after the initial purchase of the truck, trailer, or equipment - not just with warranty and maintenance work, but also by offering repair services on trucks and equipment already in operation.

"So many times the end user thinks that buying direct will make him happy because he's paying less for it," Vanderlinden said. "The end result might be the opposite because if anything goes wrong, the manufacturer has to deal with it, and he doesn't have the people in place to deal with it."

Robert Green of Robert Green Trucking in Rock Hill, New York, said there has to be a team approach. He said he deals with a crane company that sells directly to large end users and with a dump body company that sells directly to vehicle manufacturers for exports.

"We, as distributors, have to be in a position where we're going to service the end users, because it's paternal, familial, whatever it might be," he said. "If one of Ron's other customers puts a piece into my backyard, I have to be prepared to service that piece of equipment because I represent that brand Ron manufactures. That's part of value-added. "We have to be prepared to work with our manufacturers and decide what we can live with or not live with. We have to travel this road together. We can't live in an antagonistic relationship."

Forman said that rapidly changing technology is "mind-boggling," requiring distributors to work closely with chassis manufacturers and attend training classes, such as Aisin's automatic transmission school. What does it all mean? Distributors have to stay on the cutting edge.

"We need to stay true to those values of becoming educated," he said. "Then when we go out, the end user is going to have to choose us eventually, because we really will sell the best product, the best value."

About the Author

Rick Weber | Associate Editor

Rick Weber has been an associate editor for Trailer/Body Builders since February 2000. A national award-winning sportswriter, he covered the Miami Dolphins for the Fort Myers News-Press following service with publications in California and Australia. He is a graduate of Penn State University.