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Longtime Â鶹´«Ã½ dealers are no strangers to consolidation within the industry. But dealing with the aftermath of vendor and/or wholesale distributor acquisitions can be a whole different story. From changing longtime relationships to new inventory issues, it can be a lot to handle, particularly for smaller dealers.

Our challenge has to do with the consolidation of our wholesale-distributor partners. We’ve noticed that the communication from our long-time wholesale distributor partners has gone sharply downhill since they were acquired. Plus, we’re seeing more problems with inventory availability and supply chain issues than since the peak of Covid a few years ago. We’d love to learn how others are dealing with this. Any insights will be appreciated.

Responses from lumberyards, full-line building material dealers, and specialty dealers/distributors:

“You’re not alone and I feel your pain. It’s getting increasingly more challenging to be an independent in the land of giants, especially when the giants keep buying up the smaller independent distributors.�

“Can’t control what others do. Do what you have to do.�

“Have the hard conversation, find out the reason, and do what is right for your company. Let them know they may lose your business due to lack of performance. We have had luck with this and performance has improved. Unfortunately, vendors get comfortable with people they think are loyal to them and slack off. Every now and then they need to be reminded that this is a competitive market and they need to be an asset to you or you will move on and find a new partner.�

“Do business with the people that you can count on—move on from the ‘non-performers.’�

“Bring up your concerns with your sales rep and his manager, and if there is no improvement, you have to start looking for new partners because someone else’s shortfalls should not affect your business or your service levels that you provide to your customers.�

“We have given business to other wholesalers but unfortunately for some products we only have one distributor in our area and when they don’t have material we need when we need it—it is a nightmare.�

“We are finding other vendors to fill the gap left by the previous vendor. This is a time consuming exercise.�

“We have had the same experience with lack of communication with our vendors. Not only from consolidation but from turnover. On top of that, it seems more and more vendors are setting up to make everything self-serve, so they expect you to take care of everything yourself— i.e. online ordering, online warranties, etc. It really takes the personal relationships we used to cultivate with our vendors out of the picture and I think it affects confidence and loyalty between us and them. Unfortunately, we have not come up with a solution to the problem either, but when we notice this happening with a particular vendor we have reached out and expressed our concerns to their management. Some have responded positively and made adjustments.�

“Using buying groups.�

“Too much centralized decision making with regional impact. We are trying to strengthen our relationship with remaining independent distributors. We push larger consolidated wholesalers/manufacturers to provide service and pricing at agreed upon levels.�

“Covid-19 affected all availability and lead times on inventory and shipping costs. It’s slightly better now.�

“Search for multiple suppliers in the category.�

“Keep relationships open with other vendors for this very reason. Give their competitor a few orders and see if their service is better than your primary vendor.�

“Service is poor at best. It is no longer about relationships and only about money. Longtime A-list vendors have become average at best.�

“I am trying to operate very efficiently. We do a lot of special orders.�

“This is very similar to what we have experienced. We have also lost long term partners who were key to many of our successes. A 20-30-year vet to a 6-year or less manager.�

“This hasn’t affected us significantly.�

“We get frustrated first, then work to deal with the problem. We have seen reduced turns by having more inventory to cover their outages offset by a higher sell price to make up for it. But we satisfy our customers’ needs. We also need to be even more diligent at reviewing every delivery, confirmation and email I order to make sure an order is correct.�

“Tighten up your internal communication processes and insist on the same excellence from your vendors as well as your customers.�

“Just keep swimming.�

“Lack of communication and lack of relationship, just no connection other than price.�

“Consolidation of vendors leaves shortages of materials as you only have one vendor.�

“Not a problem for our business.�

“You know, when I was a young man I had the mistaken impression that life would be easier as I got older and (hopefully) wiser. I now know that it doesn’t get easier and each day will have its own unique challenges. Once you reach the top of one hill you find another, more challenging hill ahead. My advice to this dealer would be to embrace the challenge and, eventually, find the solution that makes your company not only as strong/competitive/efficient as before, but better. There are a good many wholesaler/distributors out there. A new one may be the solution to this predicament.�

“You and your competitors are all in the same boat, it’s a level playing field out there, you just have to work harder to maintain and grow your business.â€�

Responses from wholesale distributors, manufacturers, and service providers:

“We have had to do many face-to-face meetings with the management team and still haven’t seen an improvement. The local management understands the challenge, but their upper management doesn’t seem capable of action.�

“The communication issues could be coming with changes in personnel. The new ownership needs to be more proactive to keep the business (customers) that just came with the acquisition.�

“Honest communication.�

“Consolidated companies are mostly concerned with inventory turns and improving return on investment. It is difficult to transfer that mindset to better customer service with a more diversified inventory.�

“As a stand-alone, family-owned distributor, we have gained momentum from surrounding competitors being gobbled up and seemingly lost their focus after being brought into a larger business entity with investors to please. My suggestion would be to search for independent customer focused distributors—trust me, we are out there!�

“We are seeing the same issues and have been forced to locate other suppliers who can provide the quality service we expect.�

“Companies get acquired and then all of the systems need to be migrated together or they operate different systems which makes things challenging. The true issue is that companies get so big that they stop focusing on the customer and service and look at data only.�

“Hyper communication and focus is the only way to stay on top of this.�

“Wholesale distributors should not be having communication issues, or inventory issues, at this time. The industry is down from peak volumes at the distributor-level, and customer service should be excellent. I would recommend scanning the market for other suppliers that are ready to be responsive and help you succeed in the market.�

“It is a must to have quality current purchase history reports. As a rule, we recommend to keep a 60-day supply of A items on-hand, and a 30-day supply for B-D items.�

“Supply chain issues do not exist as of now.�

“We are also seeing communication and service drop significantly. It’s as if the acquiring company doesn’t care about current relationships. ‘This is how we do things now,’ seems to be the response to problems. We’re seeing billing problems with invoices not matching purchase orders. Our team is spending hours trying to figure out what the ‘new’ vendor is doing. It’s very frustrating. Likely our team will look for another vendor to meet our needs, which is sad as we’ve had this relationship for over 20 years.�

“They seem to have decided that their overhead is now our overhead.�

“Not yet. Since Covid-19, most vinyl and wood window manufacturers added 30%+ production volume. When interest rates start to come down, supply issues will become a factor in the window supply chain.�

“Look for other—possibly smaller—service-focused partners. Large conglomerates that perform well are rare.”

Has consolidation among vendors impacted communication or inventory and supply-chain issues for your company?

Responses from dealers:

“My truss supplier was bought by a corporate overlord and has slowly become more expensive and slower in their process, quoting, and shipping. My sales rep has also changed. Anytime I have an issue, I end up contacting my former sales rep who is still with the company to fix it.�

“Post-acquisition nightmares with AP and then quality.�

“We had a nationwide distributor recently purchase a local family-run competitor of theirs and became the sole distributor for the product line I purchase. Now I don’t have any other option to buy the product from, which has made things rather difficult.�

“Consolidation or relocation may help suppliers bottom line but rarely improves service.�

“Competition keeps vendors sharp. Need at least a dual supplier model.�

“We haven’t noticed any communication issues yet.�

“We have seen some vendor consolidation, so far it has not negatively impacted our business significantly. However, we also have not experienced the advantages that the vendors have advertised.�

“Too frequently supply chain disruptions with large manufacturers are going ‘off market.’�

“This is a loaded question—dealing with multiple vendors and products has been better with some and worse with others.�

“Many of the better vendors are seeming to get swallowed up by not-so-great vendors. Less choices means less competition, means higher prices and worse service. It’s sad.�

“The more ‘corporate’ they are, the harder they are to deal with.�

“Every time we have experienced a merger, prices seem to go up, customer service and quality go down.�

“We are a very small business and as they get bigger, we get smaller.�

Responses from vendors:

“Interactions like billing and payments are automated.�

“We as distributors have not had any issues with consolidation. With that said, I do see the effects from some of our dealers which has strengthened our position with them.�

“New owners don’t care about customers’ needs. Old owners (who are staying on during the transition) don’t have any control to fix problems.�

“As a wholesale distributor, the manufacturers that we work with have had steady ownership.�

“The historical lines of doing business, manufacturer, two-step distribution, and end user has blurred quite dramatically the past few years. We find that a few of our partner mills that we have done business with for the past 40 years and have basically taught them the business in our local market are now going to business through competing channels, and we have seen our sales drop with a few vendors by 65% or more. These same vendors would be our last resort for purchasing products from and are now more competitors than suppliers.�

“The consolidation of quarries with a top heavy management team has delayed product, caused confusion as to what they will be quarrying and caused issues with product availability. The management team seem to be numbers people that really don’t understand the true business.�

“If something goes wrong, you have to ask your buyer or salesperson to intervene. Too many times and they see you as a problem customer or supplier.�

“A smaller company with specialty parts was acquired by a larger corporation, and the service level as well as order fulfillment was greatly impacted.�

“We’re losing sense of urgency and missing the relationship aspect that are important in this industry.�