Issue link: http://read.dmtmag.com/i/131533
32 • JUNE 2013 • WORLD FENCE NEWS Becoming partners with your suppliers continued from page 30 are we are moving in that direction), there is little any of us can do about the price of oil and gas, but there is much we can do to better manage our own industry and the flow of materials from manufacturer to customer. Let me give you an example of what I am talking about. When you purchase a car, refrigerator or television, would you expect to go to the GM, Frigidaire or Magnavox factory to place the order and pick up your product? Of course not. That would not be a manageable situation and would lead to complete chaos in that particular industry. One of the primary reasons is "service." How could Chrysler, Maytag or Panasonic expect to handle a million individual orders and process and service each one? Impossible! They can and do, however, process and service a few major accounts that can order as many as one million or more TVs or automobiles. And as far as price, do you reasonably expect that you could go to the Canon factory and expect to pay the same price for one camera as Circuit City or Best Buy would pay for 100,000 cameras? No, of course not. So I ask you two questions. First, if you buy $1,000 of fencing products for a particular job, do you think you should pay the same price for that product as a master distributor who could order and warehouse $5 million or $10 million worth of product? Second, do you think it is possible for any of the major manufacturers in the fencing industry to supply and service all of the individual retail fencing companies at once? Again, the operative word here is service. This is also a big factor in dealing with the big box stores whose sales model is to eliminate the middleman and sell factory direct. Yes, of course there is a place for them in the market – they have proven that over the years – but it certainly can disrupt the supply chain for a local fencing contractor, correct? (Later this year, look for an article by me built around the best ways to compete with these sales giants.) Setting aside the big box store example for the moment, if it were just a matter of making the sale and turning a dollar, the vendors could probably do that like a big box store and you would still have the fragmentation that has been haunting the fencing industry for the past 30 or more years. On the other hand, we could continue to clean up lines of distribution, like all other major product distribution in America, for the good of the industry. Unless you are Sears, no major manufacturer can, or should, sell directly to the public. Products should be distributed instead of sold directly, for all the reasons I have mentioned and many I have not. This is primarily for the purpose of managing and servicing the end user all along the way, before, during and after the sale. Consequently, in this industry no major manufacturer can, or should, try to sell and service the general public and the thousands of fencing contractors all at the same time. It would be like the Owens-Corning factory saying to all the homeowners and roofing contractors in the country to stop continued on page 34