Adapt quickly when suppliers change their margins

By Colin Wilson
Key Business Advisors Director

As products become outdated or as competition increases, suppliers may move the goalposts and change their margins. That might be frustrating for business owners and sales staff who deal with manufacturers and distributors, especially if they have been used to making significant gross profits a certain way.

Some business owners and sales staff tend to panic over the prospect of change and immediately put cutbacks on the agenda, but what they need to do is think outside the box and quickly adapt to maintain their competitiveness and profitability in the marketplace.

High-performing businesses never panic at the thought of having to do things differently. Instead, they review their sales process and work out a better solution or strategy to ensure even bigger profits. They know that how they are currently selling might not always be the best way to do it, so they are open to innovation and potential improvements.

Advice
Adapting your sales process to changes in supplier margins has to be executed with high motivation and a clear sense of purpose. You need to effectively communicate to your sales staff what the changes are and how they are going to benefit the team and the business as a whole. As a team, discuss and analyse your options, then conduct group activities, role playing and further training to get everyone on board. By doing so, your sales staff will more readily accept the changes and implement them with confidence. If your staff are motivated to change, then your business successfully moves forward, but if they are not motivated then the blame game happens, adversely affecting your customers and your business.

If you, as a business owner, are totally dissatisfied with the changes your supplier is imposing, then perhaps the answer is to look for new suppliers. For businesses that are part of a franchise group and therefore cannot consider alternative suppliers, then the answer is to look at ways you can adapt to the changes while keeping your sales staff highly motivated to succeed.

Talk to other business owners who are adapting well, and find out from them the “why” and “how” behind thinking outside the box to grow gross profit despite changes made by suppliers. Alternatively, get independent advice from sales and business experts who can come into your business and help drive the necessary changes. They may even be able to recommend additional services that complement your business goals so that you can immediately see a huge return on investment.