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Wednesday, November 10, 2021

CONXEMAR Round-up Part 3: Who Do You Trust, and How?

Team Dealboard recently attended CONXEMAR, the International Fair of Frozen Seafood organized by the Spanish Association of Wholesalers, Importers, Processors and Exporters of Fisheries and Aquaculture Products. While there, we engaged in 120 conversations with representatives from over 100 companies in the seafood industry. We share our observations about the CONXEMAR event, the current state of the seafood industry, and the impact of COVID in this multi-part series.

Relationships matter. We do business with those who we’ve successfully done business with before. We build trust based on observing each other’s patterns of behavior. And if we’ve had an issue or dispute, we make note of those who strive to do right by others and honor “the spirit of the agreement” rather than those who ruthlessly work their advantage on the basis of a technicality. These concepts aren’t just for the seafood industry, they apply to life as a whole.

But, when it comes to relationships, the seafood industry has a scalability problem. We know that at the fringes of this industry, there are plenty of sketchy operations. Each of us every day faces decisions about whether to permit smaller companies to make big purchases, and from time to time every one of us finds ourselves in a disagreement over something which had previously been agreed. It’s no wonder many seafood buyer/seller relationships, the most successful ones, have been built and strengthened over generations.

But now, fisheries in some locations are threatened by climate change, forcing us to seek new suppliers in other regions. And, despite the generations-long history of many seafood trading relationships, the pandemic introduced unprecedented supply chain volatility and consumer demand uncertainty, leading many parties to exit the industry or seek shelter under bankruptcy proceedings.

All of this puts pressure on relationships, and forces all of us to seek new ones. Lack of trust becomes a huge barrier to growing your network. This was a frequent topic in our conversations at CONXEMAR. Any time a new party wants to purchase goods and services, developing trust over a generation is too long to wait for the necessary trust to develop.

There are ways to mitigate this, of course – word of mouth referrals, testing new parties through small transactions first, or obtaining credit insurance, for example. But each of these takes time, or gets expensive.

How do you build trust? Is your process to build trust a barrier or an enabler for your business growth?

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