Develop Strong Relationships With Your Suppliers

RCS Influencer Trent Cotney says that a contractor’s relationship with their suppliers is critical to their business. 

Editor’s note: The following consists of a conversation between RCS Multimedia Producer Megan Ellsworth and Trent Cotney. You can listen to the podcast or read the transcript below.  

Megan Ellsworth: So, this month's question is, how should contractors be working with distribution for success? 

Trent Cotney: So, a contractor's relationship with their supplier is a real critical relationship. And when you're first starting off as a contractor, oftentimes you just look at a supplier as a means to an end. But what you really should do is you should work on relationship building. So, usually, you're assigned a salesperson and that's your primary contact, but you want to get to know the key people within distribution, at least on the local level and not further up the chain. So, get to know the credit manager. If times are rough for you or if you're having to juggle jobs, they're going to assist in making sure that you stay afloat and do what you've got to do. The other thing that you really want to do is take a look at that credit agreement before you sign it, recognize that usually there's a personal guarantee. Unless you're really big, it's hard to get out of that. 

So, take a close look at what the terms are of that credit agreement, recognize that you're going to be stuck with that. Feel free to ask about certain provisions. But oftentimes, if there's an issue, and I see this a lot, if a contractor has an issue with material on a job site, the distributor is the one that usually gets it resolved. They act as a liaison between the manufacturer and the contractor. And oftentimes, they will step in to try and smooth things over, or to provide additional material or credit or whatever is necessary in order to keep the end user happy. So, it really pays to make sure that you've got a good working relationship with distribution, because when times are bad, you want them to be in your corner. 

Megan Ellsworth: Absolutely. Well said. Perfect. Is there anything else to add or is that all you're thinking? 

Trent Cotney: One of the things to think about if you're a contractor with distribution is work on your terms. The trips to Cabo and everywhere else are great, but me personally, I'd much rather take the value of that back as a credit or a rebate or something like that. The more you buy, the more power you have, the more ability that you have to negotiate better rates, better rebates, better deals. Travel and entertainment is great. T&E is fantastic, but I'd much rather pay the bills. So, just remember that as you get bigger and as you get down the road, you have a lot more ability to negotiate. 

Megan Ellsworth: Beautiful. Well, thank you, Trent. And we'll be chatting with you next month. 

Trent Cotney: Sounds great. Thank you. 

Trent Cotney is a partner and Construction Practice Group Leader at the law firm of Adams and Reese LLP and NRCA General Counsel. See his full bio here.