Distributor / Manufacturer Relationships … Part of Your Profitability Formula?

I believe Mr. Slater is a straight-up sort of guy –a pillar of our industry. And we could use a few more like him. But, I am a bit concerned about a statement that implies it is solely the manufacturer’s job to create demand.

“Vendors, who have unreasonable terms and conditions, don’t create demand at the end user and, follow an unrealistic approach to partner selling will find unwanted attention at the electrical distributor.”

In an information age, in an age when logistics companies can move product across town or across country in hours, I believe the pay scale for distributors who serve demand created by others will be mighty slim.

If you’re not thinking about being a part of the demand creation, you could find yourself on the wrong end of the stick.

Frank, Great comments. I agree that it is not the sole responsibility of the vendor to “create demand” . I believe that since the landscape of our market has changed so much in the past couple of years that the distributor needs to re-focus their efforts on demand creation, not just demand fulfillment. I do think that the vendor does have a certain responsibility to their partners (vendors) to help them put programs in place to create demand.

While the manufacturer may bear the heavier burden of creating awareness of their product (it IS “THEIR” product), a symbiotic relationship still exists between manufacturer and distributor.

This implies obligations on the part of both.

A manufacturer should provide a distributor with the support necessary to sell and service their products. These may take the form of sell sheets, spec sheets, special telephone numbers, distributor only areas of websites, etc.

It may even cover such areas as co-op advertising dollars, salesman spifs, rebates, etc. These create awareness of the product, but more importantly, they help the distributor do their job.

Recently, there has been a trend away from these types of support types of products and services. Although cost is at the core of the issue, I believe manufacturers sell themselves short. They are eliminating a business building block that is difficult to quantify and even more difficult to regain once lost. The “stuff” they receive from manufacturers leaves a long-term impression and loyalty with the distributor and their sales staff.

But the distributor must still do their job.
A distributor is required to know all the details and intricacies of the product to the best of their ability. They must establish a repertoire and relationship with the customer. They must “sell” the product, highlight features and benefits, etc.

They must also have the integrity to present the best solution to their customer given the available choices. Those choices may not always be price driven, or perish the thought, profit driven.

If a manufacturer develops a product that the market requires, gives the distributor the backing to do their job of selling, and the distributor does their part, it’s a win-win situation.

Great comments Chiam, Well said