Monday, August 18, 2008

Help Your Competitor? Why Not?

Here's a bold idea: Help your competitor! And, they in turn can help you. I've tried this many times and it works very well. I'll explain.

Find one or two competitors just outside of your main area. This really makes them not so much a competitor, but someone who is selling the same things you are, or at least, some of the same things.

It's been my experience that with certain distributors or manufacturers, you can get a better discount or terms with a certain amount of volume. Of course, I always tried to reach the next level because it made a difference in my profits and how flexible I could be with my customers on price. So, I used to work with a dealer selling the same things. We developed a relationship and we discussed this arrangement and since it worked to both of our advantages, we decided to test it. It worked extremely well.

We might place an order this month through his store with both of us ordering a quantity that gets us the discounts we want, next month we might do it through our store so that we keep a strong relationship with the vendor. We get the deal and the product gets split between us in whatever ratio we decided on to begin with.

I used to do this with musical instruments, vitamin products, and I've done it very well with cars and trucks. I did it with trucks mainly in this way: I want some non-standard colors to do some promotions with and it requires an order of 10 to get the paint at a reasonable cost. I would work with my friends in the business and split an order. I used to buy "franchise" guitars from other dealers in this way. They needed to hit a certain volume based on their franchise agreement and I would buy some to help them hit that level. It helped me to have some other products to sell. Distributors always have some kind of deal going on and this is a way to take full advantage of the offering. Sometimes there is a bogey to hit in order to qualify and then the deals start happening. How nice to be able to make that happen so much more easily.

You may think this sounds foolish to be helping my competitor, but the more you think about your "competitor" as a friend, the more they will be a friend. Of course, we are seeking an advantage for ourselves, but in the process, we must give the same advantage to the competitor. Working against a competitor will only work against you. Try it and I think you will find that it works very well. It will change your thinking about competitors.

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