Products


Distributor Equity

What is your Distributor Equity Index?Manufacturer & Vendors:

What is your Distributor Equity Index?  So take the test ...

 
  
Independent Healthcare Distributors still control major market share, especially in the non-acute provider markets. Like smaller, privately held businesses in other industries, these distributors face many daily challenges in competing with the "Big Boxes” of healthcare distribution. These challenges are presented by occasionally shallow-thinking customers, unenlightened government regulators, and all too often, by vendor manufacturers posing as our "partners”.
 
The economic reasons to support more equitable and open competition among your distribution customers seem obvious: more competition means more options for providers and manufacturers, with better service and efficiency downstream.  Perhaps more on point, though, do you want to be held ever more captive by a shrinking handful of Big Customers, each with their own agenda (and private label) relative to your products and their own increasingly unilateral demands?
 
Lots of industry manufacturers pay lip service to "Support of the Independent Distributor”.  Obviously they want companies like ours to sell their products because we control market share and are generally much easier (and more enjoyable) to deal with than the Big Distributors. Even after years of consolidation and its often negative impact, maturity of effective master distribution platforms, and some loosening of the restrictions on access to GPO programs, independents still trudge ever uphill on the decidedly uneven playing field. 
 
How can you fairly gauge your support of Independent Distribution?  Take the following test to see how you stack up. Find out from others in your organization about policies or processes that can negatively impact competition between your distributors. And for more information on how you can better support Independent Healthcare Distribution, all you have to do is ask.
 
This is not an automated form, so jot down your scores
 
1. Is your BEST into-stock distributor pricing reasonably and economically attainable by your better independent, one-location distributors?
YES – 15 points
NO – 0 points
  
2. Are ALL your into-stock Distributor Pricing schedules published and openly distributed?
YES – 10 points
NO – 0 points

3. Are your minimum annual requirements to maintain an account based solely on logistical efficiency? 
YES – 10 points
NO – 0 points
 
4. Do you offer exclusive promotions and unpublished buy-ins in which your largest distributors primarily participate, with the discounts offered approaching the likely selling margin in the field?
NO – 10 points
YES – minus 10 points

5. Do any of your measures of individual distributor performance consider per capita results based on population served?
YES – 10 points
NO – 0 points

6. Are your distributor profit enhancements (sales tracing fees paid, incentives, sales meeting and catalog support, spiffs, cooperative advertising, channel fees, etc.) offered equally and openly to all distributors?
YES – 10 points
NO – 0 points

7. Is your funding of sales representation for independent distributors in fair and reasonable proportion to your budget for National Accounts personnel?
YES – 5 points
NO – 0 points
  
8. Do you have a comprehensive relationship with an independent distributor co-op?
YES – 5 points
NO – 0 points
 
9. Do all your distributors know who to contact in your organization that has the authority to address and resolve significant GPO/Rebate/Contract policy issues? 
YES – 5 points
NO – 0 points

10. When disallowed distributor rebates are at issue, do you apply the same criteria to independent distributors as you do for nationals (i.e., the amounts allowed to pile up, or when credit hold is threatened or applied)?
YES – 10 points
NO – 0 points

11. Are your contracting policies (including tier-setting, LOC origination, class-of-trade distinctions, etc.) with end-users and GPOs fully communicated and applied equally to all distributors? 
YES – 10 points
NO – 0 points

12. BONUS QUESTION: Are you familiar with your legal pricing obligations under Section 2a of the Robinson Patman Act?
YES – 5 points
NO – 0 points
 

How does your final score rank?

 
  • 0-40  Skunked: you deserve to end up with WalMart as your only customer

  • 40-60 Shocking: that you have any business at all with independent distributors

  • 60-70 Sub-Par: ever wonder why you can’t get on a sales meeting with independents? 

  • 70-80 Not terrible: but not very deserving of full support from your independent distributors in this dog-eat-dog industry

  • 80-95 Tolerable: doing reasonably well, but with some clear deficiencies that need fixing; sadly though you still rate among the industry elite

  • 95+ Top of the class: come see us!