BY MIKE HOCKETT
As e-commerce continues to re-shape the industrial distribution marketplace, supplier best practices have tended to stay the same. But many independents are several generations old or more, so it takes a
long time for their general principles to shift.
Even so, our survey shows a trend developing when
asked to rank the most important factor when evaluating suppliers (Figure 2, page 29). To no surprise, quality
took the top spot again, and by a hefty margin. What’s
interesting, however, is that the percentage of those that
ranked quality at the top has gone from holding steady
at 88-89 percent from 2009-2012, to 85 percent in 2013-14
and down to 84.8 percent this year. Respondents could
choose up to three criteria items.
Granted, in the big picture that is still only a 3-4
point drop, and quality was still nearly 12 points above
the No. 2 item – on-time delivery (63 percent) – but
it is the consistency that is notable. This is now three
straight years of decline. Distributors once again said
that carrying the best products is key to success. But is
having the best product becoming less of a priority?
Only time will tell.
As previously stated, on-time delivery came in second
at 63 percent, just ahead of service/support’s
62.6 percent. That is about a 3 point dip
from last year for on-time delivery, while
service/support increased 8. 5 points. Service/
support climbed steadily from 2009-2013 before a drop-off a year ago, but charts again
now as a close No. 3 factor. On-time delivery
had a steady decline from 76 percent in 2009
to 63 percent in 2013, but has leveled off
these past two years at 66 and 63. Price, in
fourth place, snapped a steady decline from
67 percent in 2009 to 50.6 percent last year,
charting at 57 percent this time around. In
fifth place, reputation of a supplier stayed
essentially the same, with a 2 point increase.
The state of this relationship between
distributors and suppliers is always important to keep an eye on, and as it has in recent
years, respondents indicated that relationship remains mostly unchanged (Figure 1).
More than one half of respondents said their
supplier relationship has stayed the same,
just over a third said it’s gotten better, while
11 percent say it’s gotten worse. Those are
each within a few points of last year, with
3 points more saying their relationship has
gotten better in the last year than 2013.
Going hand-in-hand with that, those who
believe their level of support has improved
has increased by 2 points over last year, and those who
say it has gotten worse has increased a point as well.
Those who believe support has stayed the same is a group
around 3 percentage points smaller.
Like in years past, distributors indicated that manu-
facturers again increased prices in the last year, with 88
percent saying yes. Interesting to note is a decreasing per-
centage there, however. In 2011 and 2012, 97 percent said
manufacturers increased prices, 91 said yes in 2013, and
it’s dipped to 89 and now 88 percent in 2014 and 2015.
Though prices keep going up, distributors say that a
strong portion of manufacturers have worked with them
to offset business costs (Figure 3, page 29). This year
more than 44 percent of distributors said manufacturers
have helped with new product introductions, up 4 points
from last year. Better than 35 percent said manufactur-
ers have helped with co-op advertising/marketing, a 1.7
point increase. Also showing increases were manufac-
turers helping with technical assistance (+1.6 points),
reduced shipping (+ 2.1 points), and extending terms (+1
In 2013 we started asking respondents if their business
installed or maintained vending machines at customer
locations. While less than one third – 30 percent – once
again said yes, that is up from 25 percent last year and
How has your relationship with your
suppliers changed in the past year?