On the other hand, when misunderstandings, jealousy and rivalry stymie their symbiotic coexistence, everyone along the supply chain loses.
{mosimage}Deb Winter, vice president, Federated Foodservice, Arlington Heights, IL, has studied the relationships among brokers, distributors and suppliers, noting that unrealistic expectations about sales agents abound. However, during her presentation at the IFDA Sales & Marketing Conference here last month, Winter counseled the attendees that, as with all forms of relationships, open and regular communications can pave the way to greater sales.
SMALL DISTRIBUTORSHIPS NEED BROKERS TOO The survey's intention, according to her, was to underscore that smaller distributorships, many of which are members of the Federated Foodservice marketing group, are in dire need appropriate broker attention, something, they feel, they aren't receiving. Conversely, she posed without resolving the dilemma faced by a brokerage that doesn't have time to heed the solicitations for help from a distributorship that is too small to build a mutually profitable relationship.
Winter offered distributors the following steps to successfully working with a local broker:
Establish realistic expectations
View the brokers as a resource and partner
Build a relationship that helps the distributor to succeed
Communicate your needs and expectations
Winter interviewed foodservice manufacturers, distributors and brokers to present a picture of each player's expectations of one another. What surfaced, she revealed, were unrealistic expectations of what a sales agency is to do for its up and downstream trading partners. When looked at collectively, the misperceived responsibilities and obligations of the downtrodden sales agency leave it with little time to count its dwindling commissions.
For example, distributors expect brokers to share their successes with them; be responsible for providing POS material to DSRs; participate in ride-withs, sales meetings and food shows; actively solicit new business for them; prepare product demonstrations; be accessible; consult with sales and purchasing departments; update them on new lines and market conditions; share supplier information and respect their confidentiality and more.
Suppliers also have expectations of their sales agents. Among them are: introduce new items to end users; help sales people move cases, attend sales meetings and food shows; keep the manufacturer aware of competitive issues; build relationships with distributors; and make 20 calls per week to distributors' customers.
According to Winter, suppliers consider the brokerage to be the "sales and marketing extension of the manufacturer in the respective market. Many suppliers today empower the brokers to make 90% of all decisions in their specific market on pricing and marketing budgets."
BROKERS ALSO MISUNDERSTAND DISTRIBUTORS As for sales agencies, many of which represent up to 70 product lines, they too have expectations. Winter's survey showed that brokers' opinion of distributorships is equally unflattering.
"Distributors seldom respect the broker's time or efforts as we try to do our job," she said.
Due to heightened competition, manufacturers are applying pressure on their sales agents, Winter continued.
"Manufacturers expect no wasted time at all. New items must be sold at every call. Reports must be submitted on a regular basis on what was sold to whom and why. Brokers must list their top 10 targets and top 10 operator accounts, who they expect to sell and who they stopped selling to and why," she detailed.
One harried sales agent told her: "The job is very stressful. It seems that I'm never in the right place at the right time. It's quite the juggling act."
Among the leading industry issues that keep brokers up at night are manufacturer consolidation that has caused unprecedented line movement among sales agencies and a decline in their income. The resulting behemoth manufacturers have an inordinate number of product lines that brokers are entrusted with to present in a rational manner to distributors and operators.
Winter said that more work with operators; more execution; more reporting and more time demands have led to lower commissions for brokers.
While electronic data interchange (EDI) can help brokers fulfill their administrative responsibilities, currently it is an unrealized dream because too few distributors are capable of participating in this technological e-commerce process, she said.
Winter said distributors and suppliers should appreciate that brokers are in business to make money; they are a service business, with limited capital investment and very few capital assets; derive revenue almost entirely from commissions; and their growth opportunities are limited by geography.
She suggested the following thoughts to distributors on optimizing their share of a broker's business:
Project focused efforts against new sales opportunities.
Utilize brokers for sales training on core product lines by setting plans at quarterly or semiannual reviews.
Take advantage of brokers facilities, such as test kitchens, and samples.
Build a top-to-top relationship based on trust with the broker ownership.
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