When tariffs were announced in February, we cautioned that the best strategy for distributors was to focus on their processes so that they could facilitate passing through the price increases. Part of our guidance was to automate implementation of price increases, review T&Cs for quotes, contracts, and SPAs, and to communicate.
Forty-eight percent of end-users don't want distributor salespeople calling on them,
according to a 2001 survey of end-user customers conducted by Progressive
Distributor magazine and MRO Today magazine. Entrenched integrated suppliers prevent
competing distributor salespeople from winning new business or expanding existing
sales.
When working with manufacturers and their distributor partners, I often encounter an
immediate disconnect between the two groups. Three primary reasons are normally
cited: Manufacturers normally work on a shorter term basis while their distributors
are more likely to have a longer term business approach. Manufacturers fail to
clarify the roles of their various channel partners.
Distributors who seek new customers often wonder how to generate a list of
prospects. Industry classification systems can be an effective tool to help
distributors focus their selling efforts in market segments they already serve, or
introduce their capabilities to companies in similar industries. The government
established industry classification to organize industries into definable
categories.
While trust is a two way street, this article specifically focuses on the challenges
of mistrust caused by manufacturers. The distribution selling model can be one of
the most effective and cost-efficient means for delivering products to the
marketplace. Distributors drive unique value to end users that most manufacturers
cannot easily duplicate.
Action planning between distributors and manufacturers has increasingly become a
requirement by manufacturers. Normally, manufacturers drive the process because they
are looking for ways to drive higher sales growth from their distributors. While
joint planning is often viewed by the distributor as a necessary evil, it can
actually be a constructive opportunity.