Manufacturer Considerations, Part 1: Choose Your Partners Well.
When you take on the purchasing role in your company, with each buying choice you must decide whether the purchase warrants a short-term or long-term stance: are you just choosing a vendor, or a partner in your success?
With consumable items such as office or cleaning supplies, you can basically view them as commodities, which allows you to buy more on price and availability; in other words, a short-term stance that lets you be flexible according to immediate needs. With big-ticket items such as durable equipment, however, only a long-term buying stance will serve you well.
Such huge capital expenditures will either help or haunt you for years over the course of their service lives, depending on the due diligence you did to determine whether these purchases would wind up as expenses or investments on your bottom line. That’s why you need to think about more than just the equipment itself. You need to consider the vendor you’re getting it from.
There are quite a few questions you need to ask yourself about this company you could be associating with for quite some time. After all, you’re hoping the equipment has a long and healthy life, and you’ll likely be working with its manufacturer and/or distributor for the length of that life.
Vendor or Partner? Important Questions
Will the manufacturer be more than just a vendor? Will they take a consultative approach to sales and service, functioning as a full partner in your success? In other words: Whose needs come first—yours, or those of the vendor? In researching the company, there are several other questions you can ask to help you answer these.
Who owns the company? Is it privately held by a small group or family that values the company for what it really is and does; or is it simply another “property” in some big holding company’s portfolio, vulnerable to being sold off or broken up at the whims of a profit manager? The answer to this question largely determines how your company will ultimately be treated by the equipment seller. Respect for staff and company values starts at the top, and extends to the customer…or it doesn’t.
Who in the company will you be dealing with, and are they the real decision-makers? Do they have the authority and power to truly satisfy your requests? Again, this knowledge is crucial, because small business or family-run structure is far more flexible and less formal, allowing for the idiosyncrasies of new or long-established relationships, rather than being forced into some rigid corporate structure. You, the client, will always feel the upshot of that policy.
How long has the potential vendor been in the marketplace? Are they newcomers to our industry, or do they have a track record of quality, performance and innovation? What’s their corporate culture concerning service and after-sales support? When you’re considering equipment that gets beaten up as badly as most pipeline inspection systems do, that last question will have a considerable bearing on your overall happiness with your purchase in the long run.
Time Well Spent
This is where due diligence can get a little time-consuming, but it’s time well-invested to protect one of the largest spends you’ll ever make in your work. Good references are important, but don’t just stop at the “happy customer” testimonials the company offers. Seek out and ask colleagues who are or have been their customers, for real-world opinions.
Go to industry shows and ask around. Participate in online forums offered by our industry’s trade publications, where you’ll find plenty of your colleagues willing to speak out. And don’t forget social media: Lots of contractors and municipal representatives spend time on Facebook and LinkedIn. Join them, and ask about their experience with, and for honest feedback about, the vendor you’re considering.
This is just the beginning of the homework you should be doing on companies you’re considering entering into a significant relationship with. Next month, we’ll explore Manufacturer Considerations, Part 2, in this ongoing Due Diligence series.