Download Should suppliers market directly to end

Should suppliers market directly to end-users,
or does it always inevitably lead to direct
selling? We asked several suppliers what they
thought, and the answers may surprise you.
TO MARKET, TO MARKET
I
n the promotional industry,
suppliers who violate the
sacrosanct supplier to distributor to end-buyer supply
chain by selling direct to consumers may find themselves
gradually serving fewer and
fewer distributor clients.
While direct selling on the part of
suppliers is considered anathema to the
entire promotional industry, is direct
marketing to end buyers equally taboo?
Consider pharmaceutical companies,
which market directly to consumers
every day. From TV commercials to
lengthy magazine spreads to website
banner ads, they regularly raise awareness – often ad nauseam – to the different
medications they offer so that potential patients know to ask for them by
name from their physicians. Two of the
most heavily marketed ones today are
Pfizer’s Chantix, an anti-smoking pill,
and AstraZeneca’s Farxiga, a prescription that can lower blood sugar in adults
with Type 2 diabetes. It’s worth noting that both Pfizer and AstraZeneca
provide customer service department
contact information on their respective
consumer websites.
Whether it’s in the form of direct
mail, TV or radio spots, digital or print
advertisements or even trade shows, can
direct marketing find a place in the promotional industry? Is it not just acceptable but in fact necessary on the part of
suppliers, as long as it’s accompanied by
the caveat that any leads are immediately directed to distributors? Or does
it set a dangerous precedent that threatens to destroy the entire fabric of the
industry?
We asked several suppliers about
their perception of direct marketing and
its possible ramifications. From their
diverse opinions, one thing remains
clear: this remains a contentious issue
with no easy answers.
uski
By Sara Lavend
DAVID MORRISON
“I spent 30 years as a distributor, and almost 10 years at Bruce Fox. Direct marketing is acceptable, as
long as it comes with the promise and commitment of distributor participation. All leads must be funneled to distributors. This is a purely ethical matter; if you’re in the industry, you have to play by the
rules or you’ll find yourself outside it. There might be some concern over making sure sales are being
funneled equally to all distributor clients. But to do that, all you can do is ask the end-user, ‘Who’s
your favorite distributor?’ That’s the only way, because distributors can’t own what they don’t have.
Why should I give them a specific sale? They have to earn it. We go where the customer tells us. But
not bringing in the distributor at all is killing the goose that lays the golden egg. The commitment to
hold to supplier-distributor-end-user chain is the glue that holds the industry together. Without it, it all
comes undone.” – David Morrison, president, DYR/Bruce Fox
“There’s definitely a place for suppliers to market
directly to the end-buyer. A supplier knows the facts
and details that differentiate his or her product from
the competition. They’re able to stir up interest in
their product, which is to the benefit of both supplier
and distributor. Meanwhile, there are numerous enduser shows every year as well. But ultimately, both
suppliers and distributors must honor a commitment to each other. Here at RiteLine, we value our
STEVEN MEYER
distributor customer base and want them to remain
the creative resource for marketing ideas and product solutions for buyers. To
attempt to take the distributor out of the mix only invites channel issues and
a customer that loses faith in the medium.” – Steven Meyer, vice president/sales
& marketing, RiteLine, LLC
“A supplier knows the
facts and details that
differentiate his or
her product from the
competition. Stirring up
interest is to the benefit
of both supplier and
distributor.”
STEVEN MEYER, VICE PRESIDENT OF SALES
AND MARKETING AT RITELINE, LLC
“I’ve never actually seen direct marketing, and we don’t
engage in it here, nor do we sell direct to end-users. If a supplier does market directly to end-users, it should all be transitioned over to distributors. But then the question becomes,
how do you make sure that happens? That’s the only way it
can be acceptable. It becomes a slippery slope, because then
suppliers will ask why they need distributors at all. I see two
primary ramifications. First, the end-user ends up uneducated about what the supplier is really selling. Suppliers are
GARY MOSLEY
used to talking to distributors who are educated about items.
If a supplier goes direct to end-users, the latter might misunderstand what the supplier
is selling and say, ‘Well, I don’t want that!’ Also, another consequence is if the distributor sees direct marketing, they may think the supplier is going after their clients, and
then will refuse to buy from that supplier anymore. A supplier can say, ‘Oh yes, we funnel everything to distributors.’ But if the distributor hasn’t seen any sales from them,
they’ll come back with, ‘Well, I haven’t gotten any of those.’ Because of the serious
ramifications, I highly doubt that direct marketing will play a significant role in the
future of the industry.” – Gary Mosley, owner, Kati Sportcap
“If a supplier does market directly to end-users,
it should all be transitioned over to distributors.
But … how do you make sure that happens?
It becomes a slippery slope …”
GARY MOSLEY, OWNER OF KATI SPORTCAP
“I’m not fond of
direct marketing. Frankly, if it
persists, eventually there will
be no need for
the distributor.
The distributor link is supBUD ROBERTS
posed to serve
as a sales link
that also combines knowledge of the
product and the ability to provide
answers. The removal of that link then
means the manufacturer is now spending incredible time attempting to
relate totally with the end-user. I can
see supplier direct marketing becoming an important aspect of the industry, eventually. Thankfully, I’m at an
age where I don’t feel that I’ll have to
be too concerned with it.” – Bud Roberts, president, Soyad/Prestige
“I’m brand-new to the ASI market, and I sell a gun
caddy and trash bag cinch. I still sell both online at
their retail price on my consumer site, but distributors can take advantage of a deep discount. However,
I do realize that it may be regarded as a negative by
prospective distributors. I just sent out my first Email
Express through ASI a few weeks ago, and I got a call
right away from a distributor who loved the trash
bag cinch. But he was wondering if I had a version
MIKE KASBOHM
of the video available that he could send to his client
that didn’t point them to my website. He was afraid they’d come direct and he’d
lose the sale. I explained to him that at the website I only sell at retail, and his
cost is only $.69 each at just 50 pieces. He can offer 15% off and still double his
money. I went on to let him know that I prefer to work through my distributors,
and that if he’d like to he could let me know who he’s working with and if they
come direct, I can point them back to him. But I still sensed his reluctance.
Why is this threatening to him? I might end up taking down the consumer site, but it’s part of my marketing. I found it strange that a distributor
would be threatened by direct marketing, which creates awareness. The distributor adds the promotional aspect to the item, so why does he feel threatened? Maybe distributors don’t want to compete with other distributors. If
suppliers broaden their base with direct marketing, maybe then the playing field becomes too level. Also, there could be a concern that the supplier
and end-user won’t understand each other. But conversations should all go
through the distributor anyway. As a supplier, I don’t want to field questions
from a lot of end-users. I want the distributor to do well. I don’t want to lose
the sale for them.” – Mike Kasbohm, owner, SpecTech Inc.
“Suppliers
absolutely
need to direct market.
On a typical day selling
product, when a blank
apparel supplier goes
on a sales call, about
85% of the shops they
approach will say, ‘We
only use apparel that
NABEEL ADMIN
our customers want us
to use.’ So direct marketing is very important
because a blank apparel supplier like me needs
to be able to reach an end-user so they know to
ask for me. I believe it’s more important to reach
end-users than distributors. I personally haven’t
seen direct marketing. We’re relying on wordof-mouth marketing at this point. But you could
argue that you might be able to market directly to
end-users when you can’t sell wholesale to them,
like a group planning a family reunion. You can
say, ‘Here are my goods, and they’re available at
the following distributors.’ At the end of the day,
I believe direct marketing has to be done by suppliers out of necessity.” – Nabeel Amin, Lane Seven
Apparel Trading
Sara Lavenduski is assistant editor of SGR, and its sister publications
Counselor, Advantages, Wearables and Stitches.