RETAILING
Time to Move On - Tips for Discontinuing with a Distributor or Manufacturer by Jeff Cinciripino , JeffCinciripino.com, Former Owner of Scuba Shack, Rocky Hill, CT
T HE DIVE IS ALL ABOUT RELATIONSHIPS. We have long-standing relationships with training agencies, travel destinations, customers, and colleagues. We also have long-standing relationships as dealers with manufacturers and distributors. The agreements that are in place along with the personal connections established over the years are extremely valuable to the local dive shops. Sometimes, however, it may be time to move on. Just like entering into a new
may not be feasible. Remember, there are minimum advertising pricing (MAP) and minimum suggested retail pricing (MSRP) stipulations that might still be in effect. Online sales restrictions might still exist. There are options to donate this inventory to schools or other organizations that could benefit. Over time, you may have no choice but to write off this inventory as it no longer supports your strategic direction. Over the years, your customers have come to depend on
agreement with a manufacturer or distributor, you should take a look at several considerations. Why You Might Choose to Exit: There are a number of reasons that you are looking to move on. They might include: Changes to your existing dealer agreement ▪ Unacceptable price increases ▪ Supply chain and availability challenges ▪ Organizational and/or operational changes ▪ Lack of product innovation ▪
you to service the equipment that you have sold to them. They value the quality of your work and dependability. Once you have exited with a specific manufacturer, you will need to
think about how you will handle servicing that gear. You may lose your status as a certified service center and most likely will not be able to procure the necessary service kits or repair parts. By taking a look at your previous service records, you will be able to understand the exposure and should formulate a strategy for how you will address your customers’ needs. Collaboration with another dive center or centralized repair facility are options. Finally, you will need to determine how to communicate this change to your customers. Over the years you have educated your clients on the value and performance of the vendor’s products. Should you make the decision to no longer carry that line, you must have a clear, concise, and consistent message surrounding your decision. Outline for them the specific reasons that you have decided to move on, your plans for filling in this gap, and how they will be able to continue to have their equipment serviced. Your message should be positive and not disparaging to the manufacturer or distributor that you are leaving. There is no doubt that the dive business is a complex enterprise that consists of many different players coming together to have a viable dive shop. The business is also constantly changing as companies undergo evolution, changes
When you are confronted with any of these specific cir- cumstances your initial reaction might be to terminate your relationship. However, there are several considerations that you should take into account before making any rash deci- sions. Considerations Before Exiting: Just like we should evaluate various factors when entering into a new dealer agreement, we should also examine several elements before deciding to exit. Let’s start with identifying a suitable replacement for the product or product line. By looking at other existing agreements you have in place with manufacturers or distributors, are there items in their line that will fill any gaps in your offerings should you stop purchasing from a specific vendor? If not, are there other companies that offer products that satisfy the fit, form, function and price? Should you find suitable replacements from a new manufacturer or distributor, be sure to conduct a thorough assessment of entering into that new dealer agreement. It is almost certain that after having been in an agreement with a vendor for any length of time, you will have product inventory from them. You should have a strategy in place for how you will deal with that inventory once you’ve decided to stop carrying a specific line. Simply discounting the products
in leadership, or changes in ownership. Not all evolution or change will fit into your business model. When that time comes, it is important to weigh all the considerations before pulling the plug.
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