It's Time to Find a Niche in Ad Specialties

While the main tools for procurement are found online through companies like ASI, PPAI, DMIA and others, some suppliers are wary of what online procurement has to offer.

"We don't do a lot of online research. To be honest, I think the Internet is just a gigantic advertising board. However, ASI and PPAI are starting to offer a lot more online catalogs, so we've downloaded some of them," said Kevin Smith, president, PPI Graphics, Canton, Ohio.

Narrowing the Search

What online services do offer, however, are choices. And while choice is often considered a virtue of freedom, it can also be a thorn in a businessperson's side. Even with procurement teams and tools for sourcing, the options can still be overwhelming. To combat this, distributors have come up with different ways of narrowing their pool of suppliers.

For instance, because American has about 6,000 vendors in its database, it needed a way to cull out who they wanted to work with. Part of the solution was to become employee-owned and to develop a preferred vendor program called "Partners for Progress." In the program, vendors offer various discounts for prompt payment and rebates, which supports employees' Employee Stock Ownership Plan (ESOP) accounts.

"This produces a full circle commitment that encourages the reps to use vendors who contribute to their ESOP fund. Those vendors then get the exposure that was promised," said Martin.

While Martin and his procurement team have access to all 6,000 vendors that are in the database, the sales reps have access to only the 400 vendors who participate in the program and contribute to ESOP funds.

However, before even thinking about picking and choosing its suppliers, the company needs to make itself known in the industry. The key to doing this is to build relationships as well as gross sales dollars. According to Smith, a distributorship just starting out should go to trade shows to educate manufacturers as to its capabilities. As PPI Graphics grew, manufacturers eventually started calling on the company, at which point it was able to be more selective about who it would work with. There are a couple of reasons why this is beneficial, one being that at busy times of the year, jobs can fall through the cracks. Working within a limited pool of suppliers allows distributors to develop relationships and build order numbers and dollars spent.