Volume 8, Issue 3, May-June  2004

 


Kinks in the Chain
Three Issues Plague Distribution

You can use any number of analogies to describe the relationship between window film dealers and distributors. Some may compare it to a football team, where each component must work cohesively to put together winning performance. In the window film game, the distributor must provide a quality product in a timely fashion at a reasonable cost. Excellent customer service does not hurt either. But, the dealer plays a key role as well, by ordering in a timely fashion, paying on time and knowing what products to offer his customers.

Most distributors say that they have good relationships with 75 to 80 percent of their customers. These are the people that are fairly loyal, order and pay on time and have solid product knowledge. But even with the “good” dealers, there are some common problems in the distribution chain. Both dealers and distributors point to three issues that have plagued their relationships over the past couple of years: warranty and return problems, payment issues and loyalty. Getting a handle of these issues will help both sides get the kinks out of the supply chain. 

Loyalty

While the film distribution chain can certainly be applicable to a sports team, Calvin Hill, president of Gila Distributing in Canton, Ga., may have an even better analogy—dating. “Everything is pretty good if both sides decide they want to have a relationship,” he said. “One side can’t be loyal while the other side is dating 20 other people.”

In saying this, Hill sounds like many other distributors. Most claim that dealers would be better served by sticking with one supplier. This gives them access to co-op advertising dollars (where the distributor or manufacturer picks up a portion of the advertising tab), while also providing them with the kind of loyal service and support that only a steady distributor can provide.

“He [a dealer who jumps around] may lose purchasing power,” Hill said. “It will tend to benefit the dealer most if he works primarily with one distributor. Some dealers like to cherry pick and buy from one distributor here and one there. That does not build loyalty and does not build a base to use co-op advertising.”

But, Debby Knudson, operations manager for Sun-Gard Southwest in Tempe, Ariz., thinks that distributors must first earn this loyalty.

“It’s the distributor’s and manufacturer’s responsibility to make that dealer want to stay with you,” she said. “We must have the price and service in order to make that happen. We have a responsibility to the retailer to keep them from jumping around.”

For Knudson, the key to good service is knowing what each loyal customer needs. 

“You have to almost know what they want before they do,” she said. “You need to know how they order and like to pay. And you need to get them off the phone in a hurry. Your established customers don’t want to waste time.”

These personal touches can earn loyalty.

“If you go to a distributor who develops a personal relationship with you, I like that they are responsive to the local market and how their materials could fit that market,” said Zoilo Centano, owner of Wintech Professional Window Tinting in Costa Mesa, Calif. 

But even with care and devotion, some dealers are forced to stray. Knudson understands that a dealer’s size may play a role in whether it hangs around or not. Large dealers, she said, can be demanding and insistent upon top-quality service. Smaller ones are more concerned with price, which can be more difficult for distributors to meet. 

“They can’t afford to be loyal no matter what,” she said.

Product offering can also drive dealers to other distributors.

“Sometimes you have to go to another manufacturer because the one you buy from does not offer a certain product,” said Eric Rivas, owner of Accent Window Tinting in Boise, Idaho. “If I want a specialty decorative film, I may have to go somewhere else. But I usually only deviate from my manufacturer when I have to. When you show devotion to a certain manufacturer, you usually get that back.”

But if they don’t get that devotion back, Rivas says dealers should look elsewhere.

“If you are dishing out $150,000 to $200,000 a year on film and they are not giving you the attention you think you deserve, you should look around.”

Then there are those like Bill Stevenson, owner of Class on Glass in Orlando, Fla. For him, buying film is not a matter of devotion, but of getting the best deal. And he claims it possible to do this by shopping around.

“We sell [just] about everything,” he said. “Some distributors may do better [with discounts] than others, but I think we are about at the bottom with everyone. It’s our opinion that consumers don’t buy film, they buy service.”

And, when the service is good, Stevenson says the brand of film does not matter as much.

It’s a scenario that’s all too common in the industry, according to Knudson. A dealer calls requesting a flat glass product. The problem is she doesn’t really know what product the dealer is requesting. So he gives her a description of the windows and asks her for the measurements, type of film and amount of film for a certain installation. This can be a dangerous road to travel for the distributor.

Lack of Product Knowledge

“It’s awkward because if we make a mistake or don’t understand what the dealer is asking for, all of a sudden it’s the distributor who does not know what they are doing,” Knudson said. “So we try to stay away from telling them what they want.”

Instead, Knudson suggests that distributors take the time to educate their customer about each film product so they can make an informed decision on what to buy.

“Product knowledge will make it easier [for dealers],” she said. “They need to understand what they are doing so they know how to ask for what they want. Then we can do our best to give them what they want.”

Product knowledge can also be an issue when there are warranty problems. But this time it’s the dealers who lament the distributor’s lack of knowledge. Usually in this situation, the dealer files a claim with the distributor. The distributor then has to go back to the manufacturer.

“Having the middleman can sometimes be difficult because it is time consuming,” said Luis Rivas, owner of Accent Window Tinting in Boise, Idaho. “The biggest complaint I hear from other dealers is turnaround time. All of the distributors I know are knowledgeable and can answer basic questions. But when it is something like film failure, it has to go back to the manufacturer. They have to tear it apart and figure out what is wrong with it.”
Distributors are bothered by many the willingness of many dealers to go over their heads to manufacturers with interpretation of claim or warranty issues.

“In many cases, if the customer is not happy with the distributor, he will go to the manufacturer,” said Jack Mundy, owner of ENER-GARD Energy Products Inc. in Burlington, Ontario. “But if he goes through the chain [and the distributor], the transaction will go a lot smoother.”

Mundy admits the distributor has a responsibility by being proactive and serving as a conduit.

“If a customer has a question, I won’t say, ‘Call the factory,’” Mundy said. “If we don’t have the answer, I will get it for them. If we just send them straight to the factory, you are not helping your customer. If they get the right answer at the factory, they won’t let us know. And, if they don’t let us know, how will we have an answer when another dealer has the same question.”

Product knowledge can also play a big role in warranty issues when a distributor sells multiple brands of film.
“There’s always a question about the type of warranty we are getting from the distributor and manufacturer and what the limitations are,” said Centano. “[On] the commercial side, you have thermal breakage warranties. Because commercial glass is sold in such large quantities, different film manufacturers have limits on how much they will cover.”

Centano said the different manufacturers’ requirements are often not explained to the dealer. This means he unknowingly may be giving his customers warranty guarantees that don’t apply to the film he is selling them.
“We are out there promoting various product lines and sometimes there is a question mark about what we are providing to the customer,” he said. “Then, if there is a problem, there is a big a dispute over who pays the bill.”

Payment Problems

a bad check and not paying in a timely manner is extremely expensive for a small business, [such as] a film distributor. We are personally funding this out of our own pocketbook. Eventually these things reduce our profits and lead to increased costs and less service.”

This consequence forces distributors to set up different payment plans for different dealers, depending upon their payment history.

“Some customers pay COD, some come in and write checks, some pay with credit cards and some dealers have various credit terms,” said Chris Weinhardt, marketing director for Enpro Distributing in Houston. “Each one is different depending on their track record and how long they have been a dealer. If one of our dealers has a history of either writing bad checks or slow pays, we might have to write a contract and negotiate payment terms.”

Others do this, as well.

“If someone wants to write checks, but [has] bounced [a check] ten times, you aren’t likely to take checks from them,” Hill said. “It’s just common sense and good business.”

According to Centano, it’s easy to understand how some dealers can have problems paying on time. He explained that his business was 80 percent auto glass and 20 percent flat glass five years ago. In 
making the transition to flat glass, he kept his overhead but went from a business that was paid upon applying film to one that was paid 90 days afterward.

“In flat glass, we are at the bottom of the ladder,” he said. “The money goes from the owner of the property [where they install film], to the general contractor and down the line. We may finally get a $20,000 check 90 days later. But if you don’t have the cash flow [from auto tinting jobs] to pay the monthly bills, you are holding those until the big checks come.”

Going through this helps him understand how late payments can happen and what they can do to a distributor.
“I feel for them and I know what its like to be on their side,” Centano said.

Others see the same thing.

“When you go down to the distributor level, you are dealing with small businesses,” Rivas said. “A lot 
of small businesses have overhead and don’t have income available to them. They don’t want to extend credit to an even smaller company, especially in a seasonal business.”

But some dealers say distributors have gotten stingier in the past couple of years. Stevenson said he used to owe money for two or three months and would not hear a word from his distributor. But the sluggish economy has changed things.

“They are getting pushy about everything being paid up,” he said. “I used to owe about $20,000 for 
60 days and I would not hear a word. Now if I break the 60-day mark owing $2,000, they start getting pushy.”
For at least one distributor, tolerance and understanding are the keys to this problem.

“We have not had some of the fastest paying people,” Mundy said. “But at the end of the day, if you can get money from them, you have to be tolerant.”


WINDOW FILM

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