When we think of large companies like Amazon, Wal-Mart and Alibaba we often don’t think about the smaller anonymous companies that serve as vendors and are the foundation that allows their distribution to work. The just-in-time vendor is the key component to their supremacy. Companies like Wal-Mart or Amazon, despite their overall size, still do not have the capability to warehouse every SKU that they sell. What they have is the ability to warehouse only what they need, using smaller manufacturing based companies to effectively drop-ship the product to their customers on a timely basis. Since the large suppliers – and by extension their customers – can pick and choose only what they need, vendors have become more and more specific in their manufacturing. To survive in this market, it is more important to excel in a limited product line than to produce everything yourself.
I cannot tell you how to be a good major distributor but the last five years as a vendor, and my 55 years in the industry overall, have taught me how to be a good vendor. There are two key concepts to grasp to become a good vendor and they are reliability and accountability. When you receive an order, you have a responsibility to deliver exactly what the customer – or the customer’s customer – ordered and to deliver it exactly when the customer wants it. If you are not reliable, there is no reason for a supplier to choose you, even if your prices are the lowest. The second concept is accountability: if there is something wrong with the order, fix it and fix it quick. Own up to the mistake and replace it as soon as humanely possible. Your job is to keep your customer, all of your customers, happy. As the market moves further and further from brick and mortar and more online, it will become even more essential for vendors to prove their worth to their distributors.