Manufacturers are the companies that manufacture the products that are utilised in providing FM services. They do not typically sell directly to consumers or B2B as they are focused on product development, manufacturing operations and rely on distribution partners to deliver the end product to the customer. CBRE use distribution partners to leverage their delivery infrastructure.
Question:
MRO-029 Ver 1.2 (Dec 23)
Answer:
What is the difference between a manufacturer and distributor?
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Answer:
Why can’t we just purchase our MRO or consumable items directly from the manufacturer and eliminate the distributor markup?
Question:
As the manufacturers are focused on improving the product and manufacturing efficiencies, they do not typically allocate resources on the outbound supply chain and the associated functions to support this. They partner with distributors to manage the day-to-day customer relationships, purchase orders, invoicing, returns, general marketing and channel management of their products. Although manufacturers do not typically sell directly to CBRE they do offer us preferential pricing (pricing agreement - PA) to support our global volumes as this is typically very attractive to them.
Answer:
Why do different distributors have different prices for manufacturers where CBRE has contracted pricing?
Question:
Although CBRE may have a contractual arrangement with the distributor, they will typically have different mark-up or margin expectations on given categories. In addition to this there are distributors that are general MRO distributors that carry a given manufacturers product line, but may not have a PA as a distributor for that given manufacturer.
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Answer:
What are some of the areas I need to consider when comparing pricing between distributors?
Question:
- UOM (Unit of measure) is important as MRO items may be purchased in multiple UOM’s. Some distributors will sell in batches, cases, pallets, etc. and care must be taken to ensure that you are comparing apples to apples
- Freight terms are also important to consider and we would typically ask for 'delivered pricing'. This ensures that we are obtaining a clear picture of the total cost of the goods and there will be no surprises in the event additional freight or other charges are applied
- Lead-times as well as understanding if purchases are managed through "stock" inventory or drop-shipped from the manufacturer or other distributor
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Why would we unbundle JAN / SAN (janitorial / sanitary consumables) from the BSC (building services contractor)?
Question:
Unbundling delivers transparency on the consumables being purchased by the BSC at site-level, the control of products, assurance of client specifications and eliminates the BSC mark-up and back-side rebates.