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Transportation expenses continue to rise despite our best cost-saving measures, but distributors may ask for a more detailed explanation of why this has resulted in the freight allowance policy change (orders of $500 or more) announced last week and effective January 1, 2011. While it may seem counterintuitive, the new policy is designed to support our loyal, stocking distributors. Here's why:
- Price Protection -- The additional savings in freight costs allows us to hold product price increases to a bare minimum in support of stocking distributors.
- Distributor Support -- The higher freight minimum increases the price advantage for true stocking distributors over non-stocking distributors filling small, one-time buys.
- Small Impact -- Typical freight-paid orders already average closer to $500 than $350. Most orders require the addition of only one or two cases/pails of product to qualify.
- Broader Line -- The Polywater line has expanded greatly in the 37 years since freight policies were originally introduced for pulling lubricants only. The availability and assortability of numerous cleaners, aerosols, sealants, adhesives, and other specialty items makes meeting the new higher minimum easy for stocking distributors.
- Inflation Neutral -- Shipping costs have risen steadily for the past 37 years, far higher than the average price of Polywater products. The policy change adjusts for this inflation.
- Industry Standards -- Even with this change, Polywater’s freight policy continues to be more generous than the industry average for manufacturers.
- Environmentally Responsible -- The policy change encourages larger, less-frequent stocking distributor shipments, which makes more efficient use of global energy resources.
- Warehouse Locations -- Polywater products are now stocked in 16 U.S. locations. Will-calls and short-distance deliveries help control costs.
These reasons were shared with distributors on the Letter of Explanation made available in the price notification broadcast, but not all will have read it. Now you are prepared to respond if necessary. |
