How to manage your distribution network?

Distributors are like employees and customers in one. They represent your company and sell your items like an employee while having extremely demanding requirements of a customer.

Good distributors focus more on the business with regard to sales rather than technical service. Difficult technical problems are usually handled by suppliers while trivial technical issues and support are covered by the distributor. Ideally, there should be a good rapport between the distributor and the supplier to optimize distributor performance.

Choosing distributors

Always ask for previous experiences from other suppliers. Some distributors don’t act according to the rules and regulations of the manufacturer even in a good marketing environment, which eventually ruins the good reputation amassed by the supplier if left unattended.

Here are a few points to keep in mind when selecting your distributor:

• Distributors with a poor financial situation may cut down on stock of your items, which could be damaging your company’s reliable image
• Some distributors hire inefficient counter staff who lack selling experience
• Several distributors don’t give their manufacturers the chance to personally train the staff, for fear of losing their staff’s time.
• If you’re a supplier who heavily relies on your distributors, learn how to pick the distributors who can retain your brand image amidst the various other brands that they’re selling.
• In retail, strategic locations are vital in selecting your choice of international distributors.

Enhancing the supplier-distributor relationship

Promoting good camaraderie between you and your distributors is the key to achieving ultimate success in your business endeavors. As an empathetic distributor, you should know that your distributors are your employees and your customers.

Here are a few steps in ensuring a smooth supplier and distributor bond:

• By sharing your vision, practices, and resources with your distributors, you can create a link of trust that could harmonize mutual benefits. This could also keep your distributors interested in the kinds of service you will offer to them.
• You should be willing to help your distributor’s business succeed in their endeavors. To achieve this, you should know your distributor’s company like the back of your hand to create an impact on your trade relationship. In this way, you’ve also garnered their respect for your company and their sincere assistance to help you reach your ultimate goals.
• Feedback from end customers is essential in creating a harmonious relationship between you and your distributors. Feedback can call out service or item incidence regarding your items. As a supplier, this feedback could improve your service and items, which in turn, increase the sales and positive image of your distributors.
• For your international distributors, it is necessary to learn about the culture and traditions of your distributor to avoid being intrusive or seem dictatorial to them.

Distributor management

Distributor management is the constant monitoring of a distributor and seeking with him to optimise the sales process, so that he is motivated to put more efforts in selling your product specifically. Distributor management requires:

• Market knowledge and benchmarking, to be able to judge any growth or decline in sales
• Developing a joint marketing strategy: what actions will the distributor take to generate interest in your product?
• Marketing support: what will be your contribution to his actions
• Product sales training
• Customising sales arguments, pricing and discount structures based on the local situation
• 2^nd line after sales support: paving the way for the distributor inside the manufacturer’s organisation
• Performance meetings and incentive schemes

Distributor management with all its preparations may require 1 day per month for a beginning distributor and 1 day per 2 months for an established distributor.

Additional business development

Especially if you have multiple distributors in a country, or a distributor for whom your products are just a small part of his turnover, you may support with business development. A business developer will:

• Actively scan the market for leads and opportunities. If these become concrete, he will hand them over to a distributor or they do a joint follow-up.
• Look for options to profile the manufacturer and the products.
• Follow and advise on regulatory issues that might influence the sales.
• Coordinate nationwide marketing actions
• Support the distributor(s) in organising events around the products.

The intensity of business development may depend on the size of your market an on the opportunities. Hiring somebody for 1 day per week may already have great impact on your sales and on the motivation of your distributors.

Conclusion

Distributors are partners. As a manufacturer, you should learn to treat them with respect the way you would treat your own employees. Distribution management, especially international, is a specialized function that requires great expertise.