One Retailer's Point of View: Retail Service Level Agreements
By Isaac Goren -- TWICE, 12/19/2005
In the Aug. 22 issue, TWICE printed a column in which I vented my frustration on the lack of support 12-volt specialty retailers receive from suppliers. The article cited such problems as failing to help make good on defective merchandise and failing to assist with shipping on product returns.
In short, dealers are finding that they are taking a financial hit in cost and labor time without any help from manufacturers when merchandise is defective.
Perhaps an additional remedy for this is what I call the service level agreement. When a retailer becomes a dealer for a specific manufacturer, that retailer must sign an agreement stipulating that it will fulfill certain rules and guidelines set by the manufacturer. Examples of these rules: The retailer will not sell product on the Internet; the retailer will not sell product to another dealer; the retailer will not transship products, etc. Manufacturers have so many rules and guidelines that these agreements are commonly three to eight pages long and drafted by attorneys.
I believe that things are much too one-sided. Retailers also have issues that manufacturers should address. So I propose that retailers create agreements of their own that explain in detail what the manufacturers' responsibilities are concerning common problems that involve the manufacturer.
The service level agreement is not a new idea. It is being used by other industries to level the playing field between the providers of a service and recipients of that service.
Topics that should be included in the Service Level Agreement include:
-
Who pays for shipping back to the manufacturer when a retailer receives a defective product?
-
How long must the retailer wait to receive a replacement product?
-
What obligations does the manufacturer have if a product does not function as it should after it is installed?
-
What remedy will the manufacturer provide if the retailer loses a large sale due to the failure of the manufacturer to deliver what was promised?
The service level agreement can include such details as whether a retailer should be compensated in credit or by check. And the agreement should come up for renewal every year, allowing the retailer to make changes depending on its experience with the manufacturer during the past year.
Our business is a partnership. It is the responsibility of both the manufacturer and retailer to make things right for the customers. Retailers should not be left standing alone forced to make decisions that impact their ability to do business and make a fair profit. The dealer is the “front man” for the manufacturer. If the dealer is placed in a bad position in the eyes of its customers, then it is the natural progression that the manufacturer's reputation is also at stake.
Note: For more information on Service Level Agreement, visit http://www.induction.to/service-level-agreements.
No related content found.
VIEW ALL GALLERIES