The Distributor Channel

In a blog titled, Advice for Distributor-friendly Manufacturers , I said this: Understand your distributor's business model.  Distributor associations publish Profit Analysis Reports.  Reviewing these allows you to better understand the Gross Margin levels needed to drive profitability. Looking for ways to reduce duplication of effort and streamline operational processes allows distributors to operate profitably when slimmer margins are required. Helping your distributors be better helps everyone. A couple of manufacturer-type salespeople noted that their distributors were not members of distributor associations publishing a Profit Analysis Report (aka PAR report). Yet, they are still keenly interested in better understanding their distributors’ models. One asked: What would be interesting and worthwhile questions to ask to find out a distributor business model? Before we launch into the questions, let me share a bit of background information. Some of you may find this

Last week I received a question which is worthy of sharing. This was more than just a question; it was positive reinforcement. There are executives in the manufacturing world who believe distribution is key to their success. Thinking further, some of these leaders are exploring ways to help their distributor channels improve and prosper.   This was the question: In a world where some of our competitors are quick to take business direct and bypass the distributor all together, what can a distributor-friendly manufacturer do to help their distributors outperform the pack? Since I believe manufacturers need to get their distributor channel "into shape" for the fight – a battle for the very market distributors and their partners created, I felt it appropriate to share some thoughts.   The following things are imperative to the health of the channel: 1) Shed distributors who are not performing.   We analyzed one manufacturer’s channel and discovered 35 percen

Sales 101– It’s easier to sell to an existing customer than it is to find a new customer.  At least one expert says 14 times easier, but I personally believe the number is closer to 5 times.  This is true because you know the existing customer. You know her operation, you know how she applies the product, you know auxiliary people.  Further, if you are doing your job properly, you know the company’s financial process. Distributors, by their very nature, carry multiple and complementary product lines. On many occasions, our chief advantage as a distributor lies in the ability to put together a package.  In an automobile analogy — we provide not only the car tire, but the wheel, hub cap, lug nuts, and often provide inflation as a service, too.  With the day-to-day hustle and bustle, we sometimes find salespeople working in the business rather than working on the business . It becomes very easy to lose our focus. Introducing the FOCUS Analysis The FOCUS Analysis is a technique