Wednesday, May 20, 2015

A 30 Year Vendor Relationship That Wasn't Worth $1500

We sell trade show exhibits.  This is not a blog trying to get you to do business with us but a little background is necessary.  Total Displays has been in business for over 30 years.  My husband and I have owned the business for 11 years as of this writing.

As a company we look for partners, long term partners.  We are not the kind of company that goes out to partner with just any company to say that we offer absolutely every product out there.   When looking for partners we are looking for companies that have the following attributes:

  1. They sell to re-sellers or distributors only.  I have no need to compete directly with any of my manufacturers.
  2. They understand small business.  This can be a little trial and error.  I talk to people in the industry to find out about their reputation.
  3. I do like to be courted a little bit.  If I have to chase the partner, chances are they are not going to support me very well.
  4. I need to be able to make money.  That seems self evident but when someone wants you to sell their product and you ask them what your margins will be and they can't answer?  Run, run very fast and very far.  I will post more on this issue another day.
Once we have found a partner, we will make every effort to represent their product and their brand well while integrating it into our offerings.  These products are not such hard products but include services.  We also want these relationships to be long term.  We truly partner with companies.  Their success is our success and vice versa.  We don't expect a partner to be perfect, but to make things right when they are not.

Now on to the story.  One of the services we provide is freight and logistics.  Of course we don't have a fleet of trucks so we partner with companies that are experts in this field.   So here is what happened.  We have had a long time relationship with ABC Shipping Company.  They have been a good partner.  We have spent a lot of money (at least by our standards) with them over the years.  We referred three of our largest clients with the most shows.   They set up direct accounts with ABC Shipping Company.  They move a lot of trade show products throughout the year.

They shipped a booth for one of these clients, XYZ Company.  This was a brand new booth.  It had never been set up.  It was shipping directly to the show.  This booth was valued at 65,000.  We get the email from the carrier saying the following:

"Please take a look at how your freight arrived into San Diego our carrier did not handle this  crate very good. I am working with them to see how this happened. David and I thought you would need this information in case you rec’d a call. My agent could not get this crate out of their trailer being it was falling apart and could not be salvaged or repaired. They did a great job at regrouping the freight inside the crate. I will send them in the next email. One of the concerns we have is the transportation back to you. I am thinking we can have our agent skid, band, and bubble wrap for the trip to MN. Please let us know your thoughts. This freight was delivered at 1030 today signed for by Susie Showmaker.  I am very sorry that your freight did not arrive as it was shipped."

They were unwilling to pay to replace the crate.  Luckily the booth was not damaged and went up just fine.  Here is my issue.  I know that their procedures and policies would require us to insure the booth at a cost of an additional $500 per trip for any replacement cost.  Also the terms on the replacement cost were very vague and subject to interpretation.  What became clear is that they were unwilling to stand behind their service.  This may be standard policy for shipping companies.

Where is the principal in the matter, where is the service?  As a result, we have pulled all business, and told our clients that we are no longer recommending ABC Shipping Company.

Personally if it were my business, I would have done the right thing and offered the client SOMETHING.  Half of the value?  Anything would have been better than this.  Remember that key word partnership.

From www.meriam-webster.com

Full Definition of PARTNERSHIP

:  the state of being a partner :  participation
a :  a legal relation existing between two or more persons contractually associated as joint principals in a business
b :  the persons joined together in a partnership
:  a relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities
Partnership implies two companies in a relationship working together.  I am sure I will ruffle some feathers with this one.  But sometimes you have to throw away policies and do the right thing by your client.  FYI, we have already paid for the new crate for our client.

What did that $1,500 actually cost them?  A LOT.  

What would you have done?

No comments:

Post a Comment