Forklift Parts Sourcing
This afternoon, I participated in a Roundtable Discussion. The topic was Manufacturer-Distributor Relations for Industrial Trucks. The group was composed of two lift truck distributors and four manufacturers of forklifts and forklift parts.
It was a lively discussion. I found the most interesting parts to be about the change in mindset of end-user customers. Both distributors indicated that price has become the number one concern of end-users, when as recently as two years ago, quality or availability were ahead of price in the why-I-want-to-buy-your-product scale. In a down economy, low price trumps all. While the viability of that strategy can be debated at another time, my point revolves around what that mentality has meant for where distributors get their parts.
Often, a forklift OEM buys its parts from a third-party provider, and the OEM sells the part to the distributor. By the time the distributor sells that part to the customer, it’ goes through three markups, meaning a higher price for the end-user. This forces the distributor to make a decision in order to satisfy his customer. Remain loyal to the OEM, or find a separate source for those parts.
In today’s environment, the decision is increasingly becoming option B, and that often means heading to the source where the OEM gets the part in the first place. Obviously, this can cause some consternation for the OEM, who, like a distributor, makes much of its profit on parts. But as long a customer knows that a distributor can get a part cheaper somewhere else, he’ll demand it be done that way. It’s up to the distributor to either work out a better arrangement with his manufacturer, lose a customer or anger its supplier. Not a great set of options. What do you think? What’s the best course of action?
Tags: convention, material handling
May 4th, 2010 at 4:38 am
We’re consistently told by customers, especially those involved in self maintenance that they are wary of non-oem aftermarket parts. Finding in many cases the savings seen in the purchase are lost due to poor fit or performance, requiring additional time in the repair.