or this could be called “protecting your back-side”!
The economic challenges faced by many distributors creates concern amongst manufacturer credit personnel about a distributor’s ability to satisfy their obligations (pay their bills). This can particularly be an issue for smaller distributors who are being significantly impacted by the downturn in the residential and light commercial markets. Additionally, companies that are highly leveraged represent another area of concern.
While this is an area that many manufacturer salespeople / reps are not overly familiar with, doing the work to write an order and then realizing that there is no commission as no payment is received is very demotivating, especially since in many cases the order could be placed elsewhere.
Manufacturer credit personnel have access to a number of financial information tools – Dunn & Bradstreet, NACM resources and meetings and the EMCB.
EMCB, Electrical Manufacturer Credit Bureau is the only one of these resources devoted to the electrical industry. Aside from tracking payment information and having a distributor company overview, an interesting feature is a manufacturer’s opportunity to post questions about a distributor to solicit input from others as well as post their experience with particular distributors. The benefit is that credit information is shared and losses can be minimized. The system also includes a database of distributors.
Many distributors are not aware that this manufacturer service is available, but just like distributors “talk” and participate in local NACM meetings, manufacturers talk also. If you are a rep calling on smaller distributors, or someone you think may have issues, touching base with credit to see what they are hearing may be prudent. Distributor management frequently does this on their larger customers.
Managing vendor credit can be critical to a distributor’s success as it impacts the ability to get product. What’s your “credit rating”?
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