Tuesday, February 15, 2011

The distribution network

For small and medium-sized enterprises with less possibilities of establishing own sales offices worldwide, it is instead important to build up a good distribution network of dealers and agents. Ideally would be to find distributors who are dedicated to the supplier's own products and can devote all resources to the sales of these. That is not always the case. So how do you choose the right partners?
There are a lot of different distributors out there. There are large ones with a broad product range, small dedicated to a specific product category, major catalog companies with minimal customer contact and smaller companies with more focus on being out at customer sites.
The large, reaching broad has not always proven to be the best. Neither has the small niched ones shown to be the most appropriate. The ones that usually succeed as distributors are the ones that have a clear profile towards the customer, who do not have a too wide range of products, which have the right customer profile in their CRM systems, who have similar products as the supplier and hence can offer them in packages, so called product bundling.
After having worked myself some years for a distributor on the Swedish market, I cannot stress enough the importance of the supplier keeping good contact with the distributor. Of great significance for the inspiration is also the opportunity to receive training from the supplier. When the dealers have a good relationship with you as the supplier, have knowledge of your products and their market positioning, are familiar with the product's unique selling points versus the competition, have good knowledge of the product's customer profile, and feel comfortable with the sales of your products, only then you have a good chance of succeeding with your distribution network.

2 comments:

  1. Distributors have only one thing in mind! How to earn as much money as possible, everything else is in second place.

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  2. Yes, most likely. They are business people. Hence the importance of staying top of their mind, especially if your product portfolio is not their main source of income.

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