The Woes of a Promotional Products Distributor  “The Top Ten List of Why Distributors Fail”

by Kay Kotan
Published by Wearables Magazine (Nov/Dec '08 issue)

Promotional Products Distributors (PPD’s) don’t start out theirbusiness planning to fail. Theyjust fail to plan! There are startling statistics of the number of PPD’s that don’t make it in this business. But, why is that? Following is my TOP TEN LIST to answer just that question:

10. THEY DON’T SURROUND THEMSELVES WITH THE RIGHT KIND OF PEOPLE!

PPD’s traditionally start out in a spare bedroom of their home – ALONE! They understand the price codes and have some catalogs. So, they put out their shingle and are in business. Soon they have questions and have no one to turn to for answers. They feel so alone! From day one, find a mentor to steer you along the path. Even if it costs you, it is well worth it. It will save you so much time, money, and the dreaded learning curve. Join associations like ASI & PPAI as well as local chamber and business organizations. Buy training materials and become a sponge! Don’t isolate yourself.

9. THEY DON’T OFFER GRAPHIC DESIGN SERVICES!

I am not suggesting that you must become a graphic designer to be a PPD. But, by all means, have a contractor or employee who can do graphic design work for you. If you are particularly working with small businesses, typically these customers don’t typically have the means nor the knowledge to produce the graphics you need to create quality products. Align yourself with a graphic designer from the very beginning.

 8. THEY WAIT FOR THE CUSTOMER TO CALL THEM!

Many PPD’s don’t want to “bother” their customers, so they wait for the customer to call them. I am not suggesting you call them every day—that would be a “Bother!” But, indeed, become a business partner with your customers. If they typically order pens twice a year, call them four to five months after their last pen order or before if there is a special buy on the particular type/brand of pen they prefer. If a customer is traditionally an exhibitor at trade shows in March every year, call them in November or December to start planning for give-aways for their shows. If you track these kinds of purchases and get the customer started on them early, you won’t be shuffling at the last minute trying to pull the rabbit out of the hat because the customer failed to call you early enough.

7. IT’S OKAY, YOU CAN PAY ME NEXT MONTH!

Why are we so afraid of accounts receivable? It is like the taboo of business communications! Be upfront with your payment policies from the very beginning. Train your customers to pay you on-time every time. It is quite acceptable to ask for half to full payment upfront for new customers. If you don’t receive timely customer payments, not only are you not getting paid your profit on the job, but you will have to take money out of YOUR pocket to pay the vendor. Because, of course, you don’t want to be a late payer to create problems with your credit with your vendors. Be very careful with extending credit. Offer a discount for timely payment if needed. Stay on top of your accounts receivable at any cost!

6. “THEY” WON’T DO ANYTHING TO HELP ME!

PPD’s refer to “them” with their customers. Customers don’t want to hear about “them!” (“Them” might be a manufacturer, a decorator, a shipper, etc.) Your customer wants to know what YOU are going to do to help them with their situation. They don’t want to hear excuses about “them” or passing the buck to “them.” If you run across a situation where your supplier is unable to provide or perform to satisfy your customer’s need, don’t refer to “them.” Customers want to feel like they are talking to the person in charge. The customer also doesn’t want to feel you are an expensive middleman in their way of getting the best price and service. Refer to “them” as “my warehouse” or “the plant” or “the shop,” etc. Don’t’ cast blame on anyone else. Ultimately, you are the product provider to the customer. Take the customer service attitude that proves it to your customer.

5. HERE IS A PICTURE OF THAT PRODUCT. ISN’T THAT GOOD ENOUGH?

If a customer is willing to invest in a product, don’t they deserve the right to feel, see and test the product himself? Yet, so many PPD’s expect their customers to purchase out of catalogs. Customers have a higher comfort level when they have been able to hold the product in their hand and take it for a test drive. Be willing to have on hand or order in product samples. A show room is a big plus, too!

4. OVER PROMISE AND UNDER DELIVER

Because PPD’s are anxious to get the business, they sometimes tell the customer what they want to hear while knowing full well a miracle will have to occur to make it happen. Instead, be realistic with your customer and yourself. If the expected delivery time is ten days, tell your customer 14 days. If all goes well and the product arrives within the expected ten days, you will be a champion in the eyes of your customers. If you have unexpected delays, you still have four days of cushion to eliminate/resolve the issues and still deliver within the promised timeframe. Remember, “UNDER PROMISE AND OVER DELIVER!”

3. DECIDE TO PLAY SMALL

Many PPD’s start out thinking they’ll be fine if they can just make X dollars a month/year. Why not decide in the very beginning to PLAY BIG! Now playing big has a different meaning for different people. But if you start out playing the game on a small level, you might miss the opportunities for the big game because you aren’t playing or even showing up on that field. Why not start calling in larger businesses from the very beginning? To PLAY BIG you must make a decision to put on your big girls pants and show up for the game ready to play!

2. I CAN BEAT ANY PRICE IN TOWN!

Why has it become so honorable to be the low cost leader? By being the cheapest price in town, what message are you communicating to your customer base? Will they be getting a quality product? You certainly want to be competitive, but you are in business to earn a living. By becoming the low cost leader, you will attract customers that are price shoppers only. You will not attract and retain loyal customers. Become know for quality products at competitive pricing with exceptional service.

AND THE #1 REASON PROMOTIONAL PRODUCTS DISTRIBUTORS FAIL...

1. AS LONG AS I HAVE AN ANSWERING MACHINE TO ANSWER MY CALLS, I’LL BE FINE!

How many times have you wished you could just dial the phone and a live person answer it on the first ring or two without having to punch in a bunch of numbers? You MUST have normal business hours where your phone is answered nearly if not all the time. Customers want to have their questions answered today! If a new customer has to leave a message on answering machine, they will most likely call the next PPD in the phone book or on the web. The same goes for e-mail. Answer e-mails promptly. Submit bids in a timely fashion, too. Quick, efficient and accurate communication with customers is the ultimate key to winning them over and keeping them as a life-long business partner.

WANT TO USE THIS ARTICLE IN YOUR EZINE OR WEB SITE? You can, as long as you include this blurb with it:  Kay Kotan is a Coach, Author & Speaker serving the Promotional Products Industry.  Are you having trouble honing in on your target market?  Claim your FR*EE gift - a free special report detailing the hottest niches in the promotional products industry, go to her site at www.kaykotan.com/niches.html! Ask Kay a Promotional Product Distributor business question at  kay@kaykotan.com.

Kay Kotan is a Success Coach serving the Promotional Products Industry.  If you would like to know if you are on the road to success, take a FREE ASSESSMENT of your promotional products business on-line at www.ppdassessment.com.