Editorial: Size not enough to ensure success
That was a new one. My first reaction was an unspoken question of my own, "Is this what they're teaching now in training seminars for car salesmen?” But I told him that I would like his dealership to make enough money on the sale to stay in business because I'd like to have someplace nearby for when the vehicle needed service.
Working with wholesalers and contractors on a daily basis, I didn't have a hard time transferring the car salesman's question to our own industry. Should a contractor really care how much profit a wholesaler makes on a sale? Of course, he probably should be concerned if he wants his supplier to stick around. But it's still a fairly ridiculous question to ask a customer.
Most customers are more interested in their own financial well-being than in how much profit their supplier makes on a sale. They're willing to pay a fair price for a good product as long as they feel they've been treated well.
I don't believe they're willing to pay more to small companies, however, just so the "little guys" can stay in business with the "big boys." But I have no doubts that smaller wholesalers can compete with larger companies.
Note that in our Premier 150, the top 10 wholesalers are not necessarily the companies with the biggest sales gains. While they posted solid sales increases of 10%, the next 140 wholesalers on the list generated, on average, 35% more revenue than they did a year earlier.
That's not to take anything away from the top 10, of course, because they realized long ago that size alone will not ensure their success. The keys to success will continue to be what they've always been: managing the company efficiently and taking care of the customer.
Many good wholesalers not on the Premier 150 list have discovered that they don't have to be big to be successful. But, like their bigger competitors, they do have to operate efficiently and give their customers a reason to do business with them.
Regardless of size, successful companies won't ask their customers to worry about their profitability. Byoperating efficiently and taking care of the customer, wholesalers should find profits take care of themselves.