There are horror stories about relationships between distributors and suppliers of all sizes and descriptions. Distributors claim lines were taken away without provocation or notice; suppliers claim distributors are given more than ample time and support to live up to their sales obligations.

However, our 2002 Small Distributor Survey found that, despite the interest that the topic has generated in the last few years, relationships between suppliers and their distributors are generally healthy. A whopping 89 percent of respondents say their relationships with suppliers are good or excellent. At the same time, 53 percent say they are working to improve relationships through a variety of means.

The responses seem contrary to reports we hear about deteriorating relationships between the two industrial supply partners. Industrial Distribution's 55^th Annual Survey of Distributor Operations found that distributors of all sizes considered suppliers selling direct to be in their top three concerns for three years running. In that vein, in the 2002 Small Distributor Survey, small distributors named "suppliers selling direct" as a main concern. We asked respondents what they did to help make relations better.

Brown Aviation Tool Supply Co., a specialty distributor in Oklahoma City, Okla., specializes in hand and power tools and gages for the aviation sheet metal industry. President Michael Brown describes his general relationship with suppliers as excellent.

He did, however, note a few problems that seem common among small distributors.

"There is definitely some tension in the distributor/supplier arena. Our line is so specialized that I don't think it affects us as much as some general line distributors," Brown says. "We are seeing some suppliers start to sell direct and as sales seem to slump ... more suppliers go after additional distributors, which is certainly an irritant to us."

Indeed, Brown is one of many respondents who said their relationships with suppliers are excellent but also noted there are some problems.

"The most aggravating thing for me is the new wave of integrators that have started to aggressively go after ... contracts with some of my existing customers," he says. "Integrators have absolutely nothing to offer the end user in ... technical or application support, yet suppliers seem to cozy right up to them and leave their long-time distributors out of the picture."

Jim Eastwood and his wife Becky own Puget Safety Equipment Co., in Bellingham, Wash. He says consolidation of safety manufacturers is the biggest problem he faces.

"Customer service and product knowledge have deteriorated in the last several years," he says. "When big companies purchase smaller ones, the salespeople that remain are given more lines to sell without adequate training."

The problem affects delivery and, in some cases, the quality of products. Eastwood notes that the problem is particularly acute in the safety equipment industry.

"Conglomeration has taken some wonderful small manufacturers and reduced their customer service and added to their shipping times," he says.

For example, Eastwood often orders 150 cases of a product that, in years past, was shipped complete right away. As soon as the manufacturer was purchased and absorbed into a new corporation, Eastwood started getting partials and back orders with lengthy deliveries, he says.

"I'm sure that when a company is bought, the new parent immediately reduces the amount of inventory they are allowed to keep on hand," he says.

The trend is reversing a bit in safety equipment manufacturing, Eastwood says. Several owners who sold to consolidators have bought their businesses back, sometimes at ten cents on the dollar, because of poor management practices after the sale, he says.

"One thing manufacturers need is better training for their inside people, and not just technically but an attitude shift about customer priorities," Eastwood says. "One company that is so good at this doesn't even have an outside sales force. They get it done using effective literature, expert inside salespeople and samples that ship immediately."

Eastwood says manufacturers selling direct is not an issue for his company because he sells only the lines that don't compete in that way.

"I have a lot of inventory and as far as I'm concerned, manufacturers selling in my territory direct are breaking agreements with me. I drop those lines," he says.

Another specialty distributor says new suppliers often ask him to purchase more initial stock than he can sell in his region. Ron King owns King Tool & Supply in Erie, Pa., and specializes in high-tech, coated cutting tools and mill supplies.

"A manufacturer may want me to put in $10,000 in stock. That's fine for Chicago or Detroit, but Northwestern Pennsylvania is not a region that will initially support that. You have to work up to that amount," King says.

Like Eastwood, he doesn't stock lines from manufacturers that sell direct and still expect distributors to stock products.

"They can't work both sides of the street, selling direct and expecting distributors to stock. We can't afford that. If we put in stock, we need to be protected," he says.

About 50 percent of King's suppliers need a better technical support department, he says, but most suppliers are sensitive to his critical delivery needs.

"Suppliers are doing a better job than ever in shipping from stock or delivering special products faster. It used to be just-in-time killed us," King says. "My customers are mold makers and tool and die makers. Just to compete with foreign makers, they have to put out molds in four weeks rather than the sixteen weeks they used to have. Cutting tool suppliers are delivering even special end mills in the same day. That used to be unheard of."

According to these three distributors, a sampling from our survey, some of the old complaints have not changed and some new ones have cropped up in recent years. Still, they say relationships with suppliers are solid and professional far more often than not.