Issue link: https://www.e-digitaleditions.com/i/42495
Presidents Message continued agreement between an end user and the factory rep. This request/demand by the end user could easily be dismissed by the factory as "none of the chain's business," because it truly isn't. I mean what would happen if the chain asked that the factory remove all commissions paid to the rep or rep agency, and then also requested the removal of all bonuses paid to the factory's vice president of sales? At what point would you tell the end user that how you com- pensate for needed services is none of their business? At some point, you have to say "NO." To this argument, I've heard the counterpoint, "Why should my factory be responsible for your (the dealer's) profitability?" Here's my answer. When a factory steps out ahead of the dealer to be on the front line at the end user's negotiation table, it assumes the responsibility for the proper compen- sation for needed dealer services and the profitability of the dealers who provide those services. If you don't want to take on that responsibility, then step away from the end user's negotiation table. In fairness, some factories have begun to understand the importance of this and have taken steps to assure that rebates are not open to pricing negotiations with end users. In the end, those factories understand that the satisfaction of the end user is tied directly to the overall service expe- rience. There is a cost tied to providing distribution servic- es, and dealers are best suited to provide that. u Industry Inisghts continued very different model and cost structure. A manufacturer's MRP establishes a minimum market value and their distributors must abide by this minimum pricing. It helps protect the full-service distributor and pro- vides the resources the distributor needs for their sales effort to aggressively promote that manufacturer's products. In the end, manufacturers count on distributors to sell their product to the end user; they expect value to be added to the product by the dealer; and our customers expect the same. MRP gives the dealer the flexibility to know if they will make a profit and, at least, have a fair shot at compet- ing for the order. Finally, MRP protects the integrity of the manufacturer's brand. I applaud those manufacturers who have adopted MAP Polices and encourage more manufacturers, like Hatco, to look into MRP Polices. u 36 FEDA News & Views