You’ve likely already formed an opinion on brokers. You might use them, you might not. In my opinion, brokers are bad - and that is not just because I am a shipper, or because I’m a sales person.
In fact, as a sales person, working with brokers is typically much easier because it
takes work off my plate: finding trucks, answering questions, dealing with issues.
There is value in a broker if they do their job correctly. Over my career I've worked
with brokers who have been very capable, adept, hard-working and strived to maximize the value for their customers – but this is rare.
All of us at some point in our lives have played the telephone game, right? The game when you get in a circle and you whisper something into the ear of the person on your right. Then they pass that message around the circle until it gets back to you. We all know how dramatically different that one sentence can be once it gets back to you.
This is precisely the problem in dealing with brokers. My customer may have an issue with any number of variables, that I, as a shipper, as a farmer, or we as a family, can change and improve. The goal for me is making sure that my customer gets whatever it is that they need, when they need it, however they need it. A critical component to making sure that happens is communication. By the time that telephone game is played between the customer, broker and a dozen shippers, we, the growers, don’t know what you really want. Unfortunately, we’ll continue sending you loads that still contain the problems you complained about in the first place, because the communication breakdown leaves us unaware of the real problem.
By the time you receive your third or fourth incorrect load, the broker becomes defensive, because it’s come to the third or fourth time that they have messed up on the line of communication. To save themselves, often it’s the grower, the farmer that gets thrown under the bus. It’s unfortunate, because the broker didn’t mean to lose the business or frustrate you, the customer, or me, the shipper. But the telephone game just never works.
Aside from communication, another disadvantage of working with a broker is the effects on your pricing. Often brokers will argue that they can “shop the market.” If they are not a loyal buyer from a grower, often they will not get the best price. They may play games and buy a second label or an inferior product to try and match your price point. While that may seem to work in the short term, in the long term it is going to cost money and create problems.
It all comes down to who has more skin in the game. As a grower/shipper, we have everything to gain and everything to lose by servicing our customers. We need to be valuable to our customers. We need our customer to see we have their best interest in mind because their best interest is also our best interest. We know as growers that out of the 1,200 acres of onions we plant, that 200 acres have homes with great customers that are fair, reliable, and consistent in the way they purchase. Our customers know that they have a farmer that’s planted for them and has a reliable Plan B (back up acres from which to pull crops).
When the market gets very tight and you buy exclusively through brokers – who is going to have the supply? Will it be the broker, who occasionally buys from multiple shippers? Or is it going to be the customer that has the relationship with the shipper? You see that’s where the money is really made. The money isn’t made in a $7 - $10 average onion market. No, it’s made in the high market. In a low/average market, you can get all the onions you want and compete with everyone else in the market who also has onions. If the market doubles or triples in price, which one of you is going to be able to have the product? Bingo. The person who gets the product is the person that has a true relationship. You, the customer, will have the product and your competitors who buy through brokers will not. You’ll be the one with the advantage and the one that makes the money in the high market.
If you’re large enough as an organization to afford buying straight loads or half loads, it would not be to your advantage to buy through a broker. Avoid them. If you feel like you have a valuable broker, continue to work with them, but demand that you have a direct line of communication with yourself and the grower/shipper. If that broker is providing you the service that they should, they should not feel threatened by the idea that you speak directly with the grower/shipper. A direct line of communication is something that should be demanded, expected, and provided. I don’t want a broker to promise you that we’ll get your order in early only to not tell me how urgent it is for you because they forgot or don’t care. They don’t care for you, the customer, like we do.
I do not mean to disparage my broker friends or the few great brokers I’ve worked with. I see their value when they aren’t afraid to have me communicate with the customer, to have me involved in the conversation. They know of our integrity and our capability in fulfilling what it is the customer needs. If we have to stay late, we’ll stay late. If we need to come early, we’ll come early. We know you need your product. We need you, our family needs you, to buy from us. Communicate with us. Give us an opportunity to sell directly to you and we can change the industry. We can change the game, the efficiency, and the possibilities.