Failure to recognize changes in the business landscape can result in systemic failure. Since approximately March 15th, the business climate has changed dramatically. While the length and permanence of the changes can be argued, for now, and likely through the end of 2020, the shift in the business climate is real and exceedingly different from just a couple months ago. It is time for manufacturers and their distribution partners to look at the operating environment and have some frank discussions about the future. Some distributor contracts have been in place for years. Many of them are built around the concepts which are, at least for now, obsolete. Let’s review some of these ideas. Good distributors: Maintain an inventory. Develop year over year growth. Identify new customers in their territory. Assume technical service and post-sale shortfalls tied to the manufacturer. Conduct customer events to promote new products. Participate in and perhaps taking the lead in ...

Most of you don’t know, but River Heights Consulting is located in Davenport, Iowa. Maybe you've seen the Quad Cities on the Today Show recently.  The Mississippi River at Davenport is standing in the midst of a flood of historic proportions. Downtown had a break in the floodwall and water is cascading down Second Street like a raging mountain stream. Just moments ago, my phone convulsed in a wild, continuous modulating buzz. Not knowing whether it was the result of my last coffee spillage or something else, I grabbed it quick and was met with an Emergency Flood Advisory. Without all the extraneous noise, allow me to share a “Distributor Advisory”. Based on the prognosis of Brian Beaulieu and the folks at ITR’s latest report, we are in for a slowdown end of this year and early 2020. Quoting a published piece paraphrasing the words of Alex Chausovsky who serves as the Director of Speaking Services at the same company: “…according to ITR, the U.S. economy has peaked in terms...

Lately, Manufacturer and Distributor Joint Marketing Plans have been on my mind. This time of year I generally take a lot of calls from distributors and their supply partners on the topic. Allow me to share a few random thoughts. There are two varieties of plans which seem to go by the same name. Let’s look at both of types: Rebates designed to drive distributor behavior and reward performance. These plans typically create an incentive which comes as a rebate based on the distributor following some guideline. For example, if the distributor carries all of the manufacturer’s products, they get a bigger rebate than the wholesaler who simply cherry-picks the best of the supplier’s product line. Other versions of this type of plan incent distributors for having a specialist, properly trained staff, the right level of demo equipment or the proper inventory. I like these plans as they drive the behaviors and incent the distributor for being more than just a logistics arm for the ...