Supply House Extortion
I spend most days reading the Wall at HeatingHelp.com. The Wall is a vibrant online forum, visited daily by some of the sharpest people around. It attracts contractors, engineers, wholesalers, institutional people, and a lot of homeowners who are looking to get educated in these days of high fuel prices.
A recent thread on the Wall caught my eye because of its provocative title, which was the same at the title of this column, except without the question mark at the end. This contractor didn’t need no stinkin’ question mark. He was convinced that what was going on was extortion, pure and simple, and he came to the Wall, as so many do, to get it off his chest, and to get some feedback from his fellow contractors.
His complaint was probably about the countermen at this supply house, but it could have been about the wholesaler’s heating guy back there at the desk. What’s interesting is his reaction to what you might consider a good salesperson just doing his or her job. Listen:
“Does anybody ever run into this sort of extortion? I have been receiving a lot of flack and jabs from my local supply house because I haven't been installing their brand of equipment. For years, these folks were the only gig in town, and every contractor in town went to these guys for furnaces, and boilers. Now there are more supply houses available, with different product lines. I installed a particular boiler in my house because we have a few of these installed on campus, and I have recommended these boilers to some of my other contractor friends. They have been installing them, and enjoy the product line. So, the local supply house has been throwing jabs here and there about ‘availability of parts,’ for my preferred brand, and saying, ‘Why don't you put in a real boiler?’ and ‘The boiler we sell has been around for over a 100 years!’
“The thing they fail to realize is that the boiler they’re pushing and the one I prefer basically have the same controls and parts. I don't like the terminal strip location on their boiler. I have installed a lot of them and I prefer what I’m using now. Whatever happened to personal preference, and a difference of opinion? And I'm not here to bash their boiler, only the local supply house. This crap is getting old.”
Can you see it happening? Maybe the countermen are getting spiffs from the rep or the manufacturer. Or perhaps they don’t fully understand the boiler that this contractor prefers. There’s a lot of new technology available these days, and not everyone is comfortable with everything that’s out there. It could be as simple as that, but whatever the reason, the guys at the supply house have decided to bust this contractor’s chops whenever he shows up to do business with them. They probably see it as good-natured fun; the contractor sees it as extortion.
So what did the other contractors on the Wall have to say? Here, listen:
“Simple. Boycott them. I had one supply house that was giving me poor support and I left there for a few months. They eventually got the idea. See if other contractors are having the same issues and take them with you.”
In other words, vote with your dollars, and tell all your friends to do the same. And these days, because of the Internet, telling your friends to do the same is getting easier.
One of the best salesmen I know says that once the customer has decided what he or she wants, the only correct thing for you to do is to smile and shut up. Then fill the order and say, “Thanks for the business!”
But here, listen to what these other guys had to say:
“I hate that, too. Although none of what you’re describing really amounts to ‘extortion.’ I've been targeted for the conversion pitch by a local supplier to go from my preferred brand to another many times. I've even been offered vacation trips around the country if I make the switch. It's definitely a bribe, though. And cheesy.”
Not extortion. Nope. Just cheesy. Nice.
And another county heard from:
“It's funny you mentioned an offer of a trip. My boss got to go to
“But he also boycotts supply houses that become slow on service. We are a small company and I asked him why he doesn't give most of his business to any one house in particular so that he can get volume pricing. He told me that he doesn’t like to do that because they get too comfortable and their prices slowly go up.
“He will periodically stop buying from a supply house that frustrates him. They later come back, giving him the deals. He's been at it quite a while and it seems to work for him. But my point is that even though he is tough, the wining and dining got his loyalty.”
Take me to
Back in my rep days, I called on a very scary wholesaler who had a sign over his desk. It read, Loyalty = 5%
Isn’t that precious?
Cut’s both ways, I suppose.
But wait, there’s more! Yet another side heard from:
“Did you talk to them about what they are doing to you? I'm a distributor, so I've seen this from the other side of the counter. Oftentimes, I bet the guys just think they're being funny or are being ‘pushed’ by a manufacturer's rep or a boss. Don't take it personally. It's your choice, and it's your name on the job.
“The ‘walking away’ for a few months is effective, but not if the distributor doesn't know why you walked. Don't joke with the guys at the counter about things that are important to you. Find a manager, look him or her in the eye and say that you're going to buy what you think is the best for the job. If that doesn't work, then walk.”
I like that advice. It’s reasonable.
And then there’s this, which I think is also reasonable:
“It's their job to sell their product, as long as they know when no means no. By the way, I've also been swayed to try a different product, only to find that I liked it better than what I was using!”
And size also matters:
“Oh yeah, certain individuals have a real hair across their butts for me at one supply house because I don't make them my regular supplier. Never mind that they want to charge me 30% more for everything because I'm a small company and don't buy enough. I told them that when they can give me better prices, I'll be back. It hasn't happened yet.”
And probably never will.
And finally, there’s this real-world view of things:
“You are taking food off the wholesaler’s table and that is how they look at it. Get a thicker skin and a sharper tongue, and don't take it to heart. We've all been there.
“We deal with several different suppliers for the different products we install. That being said, we have our main supplier with whom we do most of our business because they are very good to us. They don't beat us up on the other products we use. We have stopped doing business with a few over the years and it was because of the attitude you’re talking about. I say that if they get abusive, go elsewhere.”
One man’s joke is another man’s abuse, and while it’s not extortion, busting chops can sure be hazardous to your bottom line.
Is it worth it?