Down to Business: Seven tips for successful distribution partnerships

In many industries distributors can be a key aspect of your channel to market. However, signing up a distributor does not mean sales will just happen. It takes work by your company to maximize the partnership and associated financial rewards.

Here are seven tips for developing successful distribution partnerships:

1. Partnerships are a two-way street: It’s not all about the distributor just sending you orders. Your team has to do their part. Think of the partnership as an investment where you need to invest time and effort in training and building bonds with the distribution sales and support team. Greater mind share can mean greater sales with distribution.

2. Make it profitable for the distributor: The distributor needs to see your product line as very profitable for their business. You want to assure your team sets up the channel so it is as profitable as possible for the distributor, which incentivizes them to sell your brand. As an example, you want to limit and optimize the number of distributors, otherwise the distributors will just compete with each other on price.

3. You may have to pay for access: With established distributors in certain industries you may have to “pay for access” to their sales team. I have always viewed this behavior as unfortunate and short sighted behavior by a distributor. In fact, I have heard of cases where business from a very profitable brand was shifted toward a distributor that did not require payment for access. As a manufacturer it is important to understand this can be required and to then determine if it makes sense for your product line and market.

4. Limit channel conflict: While there will always be exceptions, be sure your sales team is aligned with your distributor partners. View the distribution sales team as an extension of your own and assure your commission and bonus reward systems don’t reward conflict. While most distributors will accept that you have a couple of strategic house accounts, there can not be constant conflict in the channel. It may cost you a little extra commission, but the rewards of an aligned channel are well worth it.

5. Set common goals and communicate: Set up weekly or monthly calls between your sales team and each of your distributors to talk about opportunities and goals. Your channel sales manager should be relentless in constant communication with the distributors and assure that the goals and actions are clear. Monitoring and setting goals also allows you the make better decisions, including ending a distribution relationship when it’s not a good fit.

6. Provide tech support tools: In many industries the distributors technical support department should be viewed as a key aspect of your sales and marketing efforts. The more tools you can provide for them to use and share with customers, the better your brand equity will grow over time. Make the investment in tech support tools and reap the rewards.

7. Build relationships: Above all else, being successful with and working with distributors is about building relationships. You as the business leader should work with and support the rest of your team in assuring that strong bonds are being built between your company and the key management, sales and support personal at the distributor. Treat them and motivate them as you would your own sales team. Invite them to your sales meetings, provide them leads and have sales contests when appropriate.

Utilizing distribution partners can be an extremely successful aspect of your business. Distributors can support and grow your sales both domestically and internationally. They do require an investment, but the rewards can be significant. Imagine the power of growing your sales team exponentially. That is the power distribution sales can provide when managed properly.

Andy Singer Speaking

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