While direct selling and direct sourcing are controversial, they aren’t the only issues that distributors and suppliers have with each other. Here are five frequently encountered hurdles in the supplier/distributor relationship – and suggestions on how to overcome them.

1. Lack of Electronic Integration

The Problem: It’s one of the most substantial points of conflict in the industry, promo executives say. The disconnect can slow the order process, make retrieving accurate information difficult, and lead to mistakes that displease end-buyers – all troubling issues in an age where end-clients expect Amazon-like service.

The Solution: Distributors and suppliers should utilize industry-wide integration standards. A growing movement is underway for such standards to be broadly adopted. PromoStandards, for instance, is a group of distributors, suppliers and service providers that create and publish integration standards that assist promo firms in electronically integrating for more efficient transactions and supply chains. The standards pertain to inventory availability, order status, order shipment notification, product data media content, product pricing and configuration, purchase orders and invoices. Meanwhile, Counselor parent company ASI this year launched OpenASI, a technology initiative that encourages industry firms to embrace standards for sharing data. OpenASI connects suppliers and distributors through APIs and other tools, allowing data to be shared through commonly used technology standards like PromoStandards. Designed initially to simplify the sharing of product data and current supplier inventory levels, OpenASI will also support sharing of transaction-related data as suppliers increasingly make that data available.

2. Incomplete Order Submissions

The Problem: On approximately three out of four orders, Showdown Displays (asi/87188) doesn’t initially receive all the information it needs from a distributor to produce the desired order, says John Bruellman, CEO/president of Sign-Zone, Showdown’s parent company. A Showdown representative then has to inquire to get the information from the distributor – additional steps that hold back the order process. Showdown’s situation isn’t unique: Suppliers industry-wide say incomplete orders are an ongoing, time-sapping problem.

The Solution: As tech integration standards become more widely implemented, this bump in the order process will be increasingly sanded down, optimistic executives believe. Still, that’s not happening cross-industry overnight. In the interim, it’s critical for suppliers to spell out what they need from distributors – to put mechanisms in place that make it as easy as possible for distributors to provide this information. Distributors must also take pains to deliver what the supplier needs, rather than dumping a half-baked order into a supplier’s lap, expecting the vendor to piece together the puzzle. “Pay attention to the details and don’t send an order expecting the supplier to fix your lazy mistakes,” says Jay Deutsch, CEO of Top 40 distributor BDA (asi/137616).

3. Failure to Honor Quotes

The Problem: “It’s a big concern when we get a quote from a supplier, and use that to quote a customer, and then the supplier doesn’t honor the quote after the fact,” says Gregg Emmer, vice president/chief marketing officer at Kaeser & Blair (asi/238600).

The Solution: If a quote is subject to change, suppliers should state that in writing when issuing it. If the quote is good for a particular period of time, that should be plainly communicated in writing too. If a supplier gives no indication that a quote is subject to change, then the company should honor the quote.

4. Quality Control

The Problem: “I have repeatedly seen a supplier ship a sub-standard order and try to get away with it, hoping the distributor won’t notice,” says Emmer. “That has to stop. The distributor takes it on the chin when there’s something wrong with an imprint or the product itself. It can cost us customers, and that can hurt suppliers, too.”

The Solution: “When quality control breaks down, suppliers should throw the order in the dumpster, re-set and do it the right way,” Emmer says. “In the long run, it benefits both them and us.”

5. Price Pressure Down the Supply Chain

The Problem: In recent years, suppliers have complained that some distributors – especially certain larger ones – are “putting the squeeze” on them with demands for overly onerous rebates, ever-longer payment terms, better-than-EQP pricing, catalog placement fees and demand for free “everything,” from setup charges to physical samples.

The Solution: A quick fix isn’t readily at hand. Distributors themselves are feeling the squeeze from end-clients, which is influencing some of the practices that suppliers dislike, executives say. Still, a fundamental principle for how to proceed is that expectations of suppliers should be reasonable and should come through a relationship that remains mutually beneficial. If there are rebates and cost concessions expected, for instance, they shouldn’t be excessive and sap a supplier. Strangling a supplier’s livelihood weakens the firm, which ultimately does a disservice to distributors and their end-clients. At the same time, suppliers should be honing operations to achieve maximum efficiency, functioning as smart as possible to enhance service – and thereby their own profit through operational leanness. Distributors should also streamline efficiency and provide high-value service to clients to shift the focus, as much as possible, from penny-pinching.