Member Discussion

Should I Register Projects With Manufacturers?

As you probably know most manufacturers have a minimum project order size where you can register the project with them and they'll give you a further discount to give you an edge and hopefully win the job. Supposedly no other bidders can register for the same project after you make the claim. There are minimums for the order which I have seen of $5K on the low side to upwards of $25K on the higher side. For this example say I'm bringing a project order to you with an opening order of say $25,000 in product. The absolute most we have received is 5% off with the average being 2-3%. I hardly think this is going to help me blow the doors off of other bidders. "Ok Company X, I decided to bring you to the table instead of Company Y (which I can buy for half off of your cost for a similar performing product) and thanks so much for that 2%!"

Another thing that really concerns me is that the contact at the company or anybody else that is privy to the information on the project could be telling their favorite vendor (my competitor) about the oppourtunity? All the insider has to do is call their favorite, tell them the exact cost they have to charge (for products) and level that playing field. It's also a win/win for them since both companies are coming in with the their product.

Without mentioning names we have been suspicious of this in the past and for this reason keep our projects to ourselves. They can keep their 2 points!

Anybody else with similar experiences?

Based on the generous project registration discounts I am fairly certain I know which manufacturer you are speaking of. As your competitor I encourage you to keep registering your projects to populate our CRM software!

Seriously though, I took the opposite approach for years and never told my distributors about the projects I was having them quote. I think this paranoia is natural. Only recently did I start taking the opposite approach and it has actually benefitted us greatly on a couple of occasions by adding a few points to the project. I now register all projects. If you are having doubts perhaps try not registering projects and see if the results differ. If they are being unscrupulous it may be time to move on. There is always someone else willing to take your money.

You could always have your supplier sign an NDA.

From what we have seen across manufacturers, 2 - 5 point discounts for project registrations is the norm.

There's always a risk that the manufacturer sales people will share info with rival local dealers / integrators. How big of a risk depends on the particular integrator / rep combo. You would know best for your local situation.

A consideration for me is how off the radar your deal / project is. If it's fairly obvious that it is going out to bid or the user is going to shop it around, you might as well register because people are going to find out anyway. But if you are confident that the end user is going to buy direct from you anyway and you have any risk about the manufacturer sharing info, the few points aren't worth it.

I register public bid jobs. They are so competitive that those extra points sometimes can make a difference, and everyone is bidding it. If it is a negotiated job, mums the word.

Is there a role for the specifier here? Normally, i dont get into this kind of thing, but just curious.

As a manufacturer, I admit it is not an easy question. On one hand, we have an interest to get as early as possible information of a potential project, which is why we provide incentives. On the other hand, we want to avoid integrators registering deals which they just happen to came across.

I believe that the right way to do it, and is a win-win situation for both manufacturer and integrator, is that the integrator really show that he brings value to the manufacturer. such value can be in different forms:

  • influencing the end-user to spec in the manufacturer's product
  • offer only the products of a specific manufacturer and not shopping around
  • get the integrator's technical team trained and committed to the manufacturer's products

As a manufacturer, when I see one of my integrators bringing me such value, I provide him much bigger incentives and not only 2%

As a former RSM for one of those camera manufacturers, I would like to say that mostly I completely agree with John's assessment. However, I would like to make a couple of other points:

  • First, if you cannot trust your vendor or their agents...switch vendors! If you have a problem confront their management. All manufacturers have a policy that sharing customer confidential information is a firing offense. Projects fall under that policy.
  • Second, can you afford to give away magin? Every point you are given offers the opportunity for another point in your pocket and not the manufacturer. This works especially if you are in a negotiated situation where you have no competition.
  • Lastly, adding to the other comments...if you are not the "favorite partner" in your area, spend more time communicating with the sales rep and become one of the favorites. The more you share the better they will "like" you. ( and of course conversely the less you share the more suspicious they will be of you)

D, that's good feedback.

One thing though:

"All manufacturers have a policy that sharing customer confidential information is a firing offense."

Is that really true? I am sure some do but I can't recall ever hearing an RSM be fired for sharing confidential details on a deal. I am sure it happens but I don't imagine its always grounds for immediate termination.

It might be hard to catch someone in the act.

Can you imagine if they didn't and it got out to press and public that a manufacturer allowed someone to share information. Not only would there be a backlash but lawsuits would follow.

Having said this do they all follow through???probably not but they could/should. To finish it has been addressed at every company I have worked for.

Name one lawsuit. I think you are overstating this. Manufacturer reps share 'confidential' information all the time with their buddies, partners, etc.

Yup, they do. If someone installs their product well time and time again, I've never met a manufacturer's rep that won't give details about available projects, unless (in the case of the ones with a code) they've given someone their word they won't.

John, that's not really how it plays out. No one says, "XYZ person is bidding this project and here is there price." I mean, it happens occasionally, but not often. What's more typical is, "Hey... did you hear that the University down the street from you needs my product, I mean, we harassed them until we got it spec'd in? Bid will be out in a week or so.. you should take a look at it." If there's a relationship, more details are given.

It is not true.

There is no question that an integrity test should prove itself out. Meaning, by disclosing your opportunities to a rep and you find that all of a sudden the same competitor starts showing up bidding on all your opportunities, then it is time to choose another vendor/rep to be a true partner with. Aside from providing the influencing details prescribed above that should permit a maximum incentive discount, one value in using an independent rep firm's offerings is to be able to possibly register several manufacturers via one contact (think less cooks in the kitchen) and therefore lessen the chance that project information will be shared.

Sorry, I have one more thought to add...

The first respondant mention exclusivity on "registering" projects. Some manufacturers may offer this but not all. Some will give anyone who asks something. This makes it vital that you prove you have driven a project ( share info or even better bring the vendor in at the begining so there can be no doubt as to who did what) and be the first to my many years of experience this works to make everyone as happy as possible.

I have dealt with the "not all," by describing things in general terms. General location. Dimensions. Type of project. If the manufacturer sounds confused, I make them commit to a discount (exclusive) before I tell them more. Most manufacturers have the latitude for their reps to do it directly. If they can't, I say, "Sure, call me back. I have a call at one with (your competitor)." Works pretty well.

From a manufacturer's standpoint, if multiple integrators in one area are pursuing the same opportunity, it makes good business sense to discount all of them if the account makes strategic sense. If it's a city system, for example, and you're going to end up with 200% expansion over the next three years, plus support contracts if you're a VMS, you want the business.

Now, if one integrator can prove they were instrumental in your product being approved or preferred, or they called you in for pre-sales presentations, by all means they deserve a deeper discount. But a manufacturer would be silly not to pursue that account by all means.

In my integrator days I registered everything. I registered projects below the discount thresholds just so my RSM knew what was in the pipe and they appreciated it, which undoubtedly led to deeper discounts as time went on. And like D said above, 2% is 2%. Whether you actually use it to be slightly more competitive or you use it as extra margin, it's free money.

If I registered with you, either I got your product spec'd, or I'm driving the project. If it "makes sense" to you to discount 7 other people, you burned a major bridge. It's a small industry. "Hey, I'm thinking of hiring this guy (name). Ever heard of him?" "Yeah, sure. I got his product spec'd a couple of times, he burned me both times. Seems more interested in the quarter than 5 years."

Yes it does make sense.

Note the part where I said the integrator who got it spec'd deserved a greater discount.

Let's say you rep a camera line. Five integrators are bidding a 400 camera project, two of which regularly sell your product, while the other three are faithful to a lower cost competitor. Integrator 1 got you spec'd and brought you in for a customer demo. Integrator 2 wasn't involved that early but are a strong integrator for you on a regular basis.

You, as a manufacturer rep, would rather risk losing the 400 camera sale instead of giving integrator 2 a discount? That's terrible business sense. It's not a matter of the quarter or 5 years, either. Situations like this happen constantly.

Trust is easily lost and hard to regain. Great reps are partners. I have told a close friend and large customer that I cannot and will not share confidential information with them to retain their trust.

It depends on your relationship. Having manufacturers is kind of like having children. When your kid says, "I'm going to Jane's to study," is she really? Some manufacturers I've worked with are going to study. Some are going to smoke weed, eat pizza, and club a seal. I register projects with the ones that are going to study. Trust your experience with the person. When in doubt, register a project you don't even care if you win, and see what happens. See if 7 other dealers of the manufacturer suddenly bid the project.

Some manufacturers I've worked with are going to study. Some are going to smoke weed, eat pizza, and club a seal.

solid gold

Yeah, I know. I'm like pony boy. Golden. I'd say you should hire me, but I don't work in the industry any more. The discussions just amuse me.

I used that technique many times. And guess what? Not much suspense. If a manufacturer tried to burn me on a small project (I never allowed it on big ones), I never used them again. Not once, ever. Word to the wise, manufacturer reps.

I've gotten discounts far in excess of what you mention. Never from someone I didn't trust. Because, why would they bother, or why would I?