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Selling to the competition
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February 25, 2000: 1:47 p.m. ET
Dealing with competing customers calls for tact and tough decisions
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NEW YORK (CNNfn) - Dear Jane: I own a small business that sells soldering torches for sheet metal. We mostly sell to wholesalers. Here's my problem: A contract salesman has started selling my equipment to a wholesaler located only two miles away from one of my loyal customers. Now, my original customer is threatening to stop buying from us if I don't stop selling to his competitor down the road. Is there a rule about how far apart competitors should be located?
This is a very sticky situation. While franchise companies usually have strict rules about how far apart their stores must be from each other, there are really no general rules to go by for other types of businesses.
You might want to base your decision on sheer dollar value by figuring out which wholesaler is more important to you in terms of volume -- the one you have been selling to for years, or the nearby one buying products from your new salesman.
One other approach would be to sell different models to each wholesaler, offering each an exclusive arrangement to sell a particular model.
If you decide not to sell to the new customer, be prepared for your salesman to be unhappy. But, since most sales people are assigned a specific area or territory to cover, you can assign him to serve a new territory to eliminate the conflict.
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ApplegateWay
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