Together or Alone?
In the print and promotional industry, every distributor business owner eventually faces the same decision: Whether to keep his or her company independent or to affiliate with one of the large distributor networks that, for the most part, dominate the industry. Each side has its pros and cons, so how do you decide which is right for your business?
AFFILIATING
The idea behind affiliating with one of the distributor networks is that the initial entry fee (say, 5 percent of your annual revenue) is paid back several times over in the services you gain in return. Group buying discounts, in-house legal counsel, a collections staff—it's easy to see how these three services alone could make you more money than you pay to use them, and most of the distributor networks offer even more services. The bottom line is, the less time you have to waste with non-selling tasks, the more time you have to sell and make money.
These, however, are all the sort-of-obvious, everybody-knows-it-so-why-talk-about-it benefits of affiliating. What about the lesser-known stuff? The secret stuff? The buried, revelatory like a diamond-in-a-pile-of-coal stuff that will finally give you the shining, million-dollar answer you're looking for? What about those reasons to affiliate?
1) What About Mentorship?
"Mentorship" might not be quite the right word, but the point is this: When you affiliate your business, you're going to gain access to a wealth of additional sales experience. Sure, you might have had a mentor or two before: A parent, a professor, a friend from the chamber of commerce. But how could it ever be more than what you'd have by affiliating? You'll be connecting your business with hundreds of others similar to yours. Oftentimes, these connections are older, more mature businesses that have already conquered what you're struggling with currently, and are happy to offer advice.
Dennis Funk and Rich Bewley, co-owners of Proforma Signature Solutions, cited access to Proforma's network of industry professionals as their number-one benefit of affiliating. "It tremendously helps having experts in multiple fields when constructing full service programs for our clients," said Bewley.
They also touted Proforma's marketing department, especially chief marketing officer Deanna Castello and the other support center team members. "Sitting down with Deanna and explaining some of our go-to-market obstacles has been beyond awesome as she has helped us position ourselves in a creative way that separates us from most of the competition we face," Bewley said.
2) What About Product Safety?
The larger your business gets, the more complex and time-consuming your product safety due-diligence becomes. You'll be moving more product, at a faster rate and to a larger pool of clients, making it harder to keep track of product integrity. You'll also be making more money, thereby setting yourself up as a target for lawsuits. Product safety issues are certainly solvable on their own. Ultimately, all they take is time, intelligence and money to solve, but those are three resources that could be dedicated somewhere else should you decide to affiliate with a distributor network.
Dan Livengood, CAS, ATMS-S, senior sales manager, eastern region for Newton Manufacturing, named product safety and compliance one of the key benefits of affiliating with Newton. "We led the way in this ever-important initiative and continue to encourage accountability from all sides of the marketplace," he said. "We seek to conduct business with partners who share our values and require all our supplier partners to sign an industry code of conduct. This effort provides layers of protection between the customer and the manufacturer by ensuring products have been properly tested with certification to verify," he explained. "We also require our suppliers to provide proof they are properly insured, and that they are as committed as we are in conducting business ethically and in full compliance with state and federal laws, as well as those importing from other countries. This also includes no child labor, abuse of labor, or discrimination, etc. We've had people align with us from this advantage alone."
3) What About Culture?
If you've worked for other businesses, then you understand how company culture impacts success. Being a part of a positive, helpful and fun work environment can do wonders in boosting your sales rate. It might seem far-fetched, but think of it this way: On average, a computer programmer is much more likely to create top-tier work at Google headquarters than in his or her parents' garage. Sure, there's an element of freedom in the garage, but Google has on-site gyms, cafeterias, top-secret gadgets and dozens of other company-culture perks to help said programmer create far better than what he or she would have done alone.
"It is interesting how importantly culture plays into the decision for many independent distributors looking to align with a larger partner," said Mark D. Gammon, CAS, central region sales manager for The Vernon Company. "Yes, we are arguably the most financially stable company in the business, and we are on the cutting edge of support, but if you do not have trust and confidence those attributes have no value," he explained. "When independent distributors align with us, one of the main reasons is that they felt like they could grow and concentrate on selling here."
Livengood agreed with the value of a strong company culture, citing Newton's culture of passion as another primary reason companies choose to affiliate with Newton. "We don't hide the fact that we're as passionate as our reps are about this business.
"When our reps celebrate landing a nice order or program, we celebrate as well. We're with them not only during the ups, but also the downs," he said. "Our relationships go beyond business and extend to a personal level. The proof of this is in the long tenure of our sales representatives and their desire to visit the home office to chat with their teams when they get a chance. We also encourage our reps to share our value of community involvement through involvement in their respective communities and charities they are passionate about."
STAYING INDEPENDENT
What about the other side of the affiliation question? What about staying independent?
Similar to affiliating, the reasons to stay independent are self-explanatory and easy to figure out on your own. Keeping your business alone and unaffiliated means you get to keep 100 percent of your profits, and call 100 percent of the shots, but also shoulder 100 percent of the risk and work. If the practical details are your only priorities, then there's nothing else to consider. But, sometimes deciding what you want to do with your business isn't about the practical details. Sometimes it's about personal achievement, about legacy, about building something that's 100 percent yours and reflects you as a person. Rod Brown, CFO for MadeToOrder, explained this desire and how it applies to MadeToOrder.
"Talking off the cuff here, but bottom line for us, I feel like we want to try and build a company of lasting value that has its own culture, its own brand, its own way of doing business that can be adaptable to our clients' needs and our employees' needs and our vendors' needs," he said. "We have, thus far, wanted to control our own destiny and be our investors in our own company. I think that's really the primary reason," he explained. "It's easy to go join one of these big networks, but then you are them. You're a part of them. You know, I'm 59 years old, what I'd like to do is have my company go on beyond me."
THE RIGHT DECISION
So, what's the right call? Affiliate or stay independent? Your final answer may come down to personal preference as much as the practical gains and losses of your business. By considering details beyond the practicalities of income, you'll be able to make the right decision and take your company in the direction best suited for your personality, the needs of your business and your overall personal goals.
- Companies:
- Proforma
- People:
- Deanna Castello
- Rich Bewley