They That Sleep with Dogs, Shall Arise with The Dip
Updated: Oct 16, 2020
*** Richard Saunders (popularized in Colonial America, by Ben Franklin, as “Poor Richard”) is a purely satirical character who has no semblance to any actual modern-day person(s). The following commentary was entirely channeled by the spirit of Ben Franklin himself while the writer, fully engulfed in his own “The Dip,” was watching the Netflix documentary “The Social Dilemma” … Enjoy. ***
Dearest Distributor Compatriot,
It has been truly remarkable to observe the resilience displayed by this Industry’s small distributor. Your efforts, ingenuity, and energy are an inspiration that deserve to be heralded by someone of greater importance than myself.
While I confess to being an admirer of yours, I must confess that my tether to the Industry is noosed firmly around nurturing the whims of your larger distributor brethren. For in doing so, I have ensured the gainful employment that keeps financially satisfied my personal life partner – a specimen of humanity as equally impressive in culture and personal skin care, as they are in liberating dollars from our joint accounts.
Today I am scribing this message because I, too, on the Supplier side, have experienced the phenomenon being bandied about as “The Dip”. While it is doubtful that either my beloved Libra, or large distributor group clients would appreciate the financial strain my Suppliership has endured this year, it was my sincere hope that you small distributors would be game to lending me an empathetic ear.
2020 has sucked. And I don’t mean the normal levels of suckiness from years past, like when I am being incessantly squeezed out of profitability by large distributor rebate and fee demands, or when my Moon & Stars threatened to leave me because of the injustice I thrust upon them by leasing the XF Premium model regardless of my should have known awareness that XF Prestige model’s features better suited their style of life.
No, 2020 has reached a suck-titude level that surpasses all other years. It is, in fact, a Super-Sucker Event that has exacerbating ALL poorly thought out decisions from ALL previous years. Such as, why did I choose to invest significant dollars in an accounting software platform to primarily support calculating large distributor dollar kickbacks on entered sales orders, when it would have been wiser to invest in an upgraded print platform that could have eliminated costly waste, print errors, and over-runs? Akin to this, would be querying as to my thinking when I agreed with my Desert Sunset to shop for a home-based on status zip codes rather than an appropriate budget?
The realization of 2020’s gargantuan suckdom fell upon my restive mind during a particularly sharp spell of “The Dip.” Our quaint market is failing to respect the concept of economic scale. Look to the Commercial Print Industry, that we often scoff is “in peril of dying” as an example. Print still represents a $95 Billion market, while Promo’s 2019 numbers were a mere $25 Billion. There is no need to be early to bed and early to rise to see that Promo is a quarter Print’s size! Yet, alas, my large distributor partners are unremittent in demanding the aggressive price discounts and revenue kickbacks common in larger vertical markets regardless of whether Promo can afford them or not.
Here, my small distributor friend, is where you will justifiably feel the tinge of betrayal. The fact is, most Suppliers cannot afford these business practices, which means that your distributorship is used to replenish depleted coffers. You, of course, recognize how the last years have seen the emergence of new fees, increased prices, investment funded supplier mergers, lower inventories, discontinued skus, and staffing shortages. Which, by your own accountable virtue, has forced an increase to your previously considerable research workload WHILE ALSO depleting profitability with ratchet up buyer objections and rejections.
To be clear, these adjustments were vitally necessary due to even your adjustment in doing business. The last 12 years have seen an influx of “rush orders” and Supplier shopping on your part, and those changes have a cost involved. Regardless, the primary purpose of those additional fees was to keep large distributors in reception of their monetary demands while also keeping my Sweet Sweetness in those luxury labels they so adore.
Clearly, I am of full awareness that these practices themselves suck and have fallen inequitably upon your shoulders. Even now I am grasping how horrendously unfair it is that these fees, disproportionately caused by the profitability loss to the large distributors, are also generally negotiated away from affecting those same large distributors.
Goodness, it is my greatest dreams to see these inequities end. Unfortunately, it would take a global event that froze all sales to realign the balance of the Industry. Something so massive that it forced an equivocation of sales – which is nearly impossible given that your larger counterparts have forced my hand into offering them discounts that make it impossible for you to compete. So do let me know if you see one of those events lying about.
For now, I am off to re-engage the grind. Presently, I must rectify how to financially afford writing out these group rebate checks, while also being able to keep my staff employed. Additionally, I must remember to fill up my Eye Candy’s entertainment account before they are forced to, once again, cavort with the Bartender at the Island destination I have them safely quarantined at… The embarrassment I endured at seeing those photos on Instagram were only equaled to seeing my big daddy client’s “Supplier Preference” award that I won being provided to a different supplier when I failed to procure the $3000 needed to fund the event… The rotten apples from that day were lessons I needed to learn the hard way.
Eternal appreciation for the daily interruption,
Richard Saunders, MASI
Exec. VP of Distributor Accounts
An introduction The Dip commentary series is here.
Jeremy Chacon, PromoEQP © 2020