Just about every day now, we are working on "negotiations" regarding the turnover targets for the calendar year. These are always resolved by all the vendors only after one fifth of the year has already passed. The word "negotiation" is in quotation marks because in most cases, a stipulation exists, to which we then are allowed to say "yes" to. The popular excuse: "the stipulation comes from USA / Japan / from wherever" and "Management also gets its bonus only when a growth of XX is reached".

This is not a nice excuse, because the underlying translation is: "I did not have the guts to stand up to my supervisor, therefore I will just apply the pressure I am receiving onto the Supply Chain further and hope you shut up."

It is true that we achieved or surpassed our goals last year with all the major vendors, and that's a nice thing, because the result is that we get goal achievement bonuses. Since last year went very well, I have the impression that some vendors this year are simply "going bonkers". If a market leader is of the opinion that 14 % or even 20 % growth is needed to justify a bonus for the distributors, then something is wrong.

The market environment may be good for Jarltech, but one or the other distributor must definitely live with a loss in revenue. Thus, the under-performers should first get higher goals and finally work hard, instead of repeatedly punishing the over-performers for their good performance from the previous year.

If the bonuses (which are so important for the profits) depend on unrealistic growth, this will ultimately lead up to the fact that all distributors will retaliate with ridiculous prices. One of our vendors even acquired a new wholesaler, but nevertheless thinks that all others could grow by 10%.

My dear vendors - to whom this applies - think again: if a target is unrealistic, you will either not even try to achieve this goal, but instead focus on other products - and you lose sales. Or else, you are fighting with hook or by crook (which means price cuts), and therefore the profit margin collapses. Besides, once the prices are bled dry, then our Sales team will push the products of your competitors by next year, at the latest. A price war does not help any of us...