Supplier Manufacturers: Building a Strategic Relationship with a Distributor

BY Mary Dickson, Revcor Inc. Aftermarket and Int’l Sales Manager, HARDI Supplier Council
1/4/2019 - HVAC Sales , HVAC Operations

Revcor Inc.'s Aftermarket and Int'l Sales Manager Mary Dickson shares some tips for manufacturers to build successful relationships with wholesale distributor partners. Presented by the HARDI Supplier Manufacturer Council.

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By Mary Dickson, Revcor Inc. Aftermarket and Int’l Sales Manager, HARDI Supplier Council

Manufacturers typically have two main channels to get product to their customers: Direct Sales and/or Distribution. A Direct Sales model is very challenging as it requires the customer to manage all functions related to the supply chain such as manufacturing, storing and marketing, selling and shipping. Manufacturers prefer to work with distributors for storing and shipping if they have space limitations in house and for targeted marketing and sales support if they lack appropriate resources.

However, in order to get the most out of the Manufacturer–Distributor relationship, both parties have to have to be aligned and have a strategic vision. Building a strategic relationship will require a lot of close collaboration from both manufacturer and distributor in the form of marketing, branding, and product development. Forming a long-lasting strategic partnership with a distributor comes down to few simple strategies which can be implemented for their mutual benefit:

  • Provide marketing tools (Training and Sales Collateral) for the distributors to provide to their wholesale and retail customers. Simply offering a product without guidance on its unique value or how to use it effectively will result in poor sales and a disappointing customer experience. Manufacturers should demonstrate to distributors how they can make money with a particular product and teach them the value of having the exact same conversation with their customers.
  • Offer assistance in building relationships with distributors’ customers. Typically a manufacturer’s Sales team spends more than 50% of their time in uncovering a customer’s needs at the end user level. Any support in regard to increasing your Sales team’s knowledge about the customers will help identify their pains and will help reduce the sales cycle. Manufacturers should spend time and effort to have adequate representation in the field for the end user / end customers. Exhibiting at national trade shows is one classic tactic to achieve this. Having a presence on social media is a newer, fruitful tactic that connects end users to the manufacturer 24/7.
  • Offer a lead time for promotions that includes enough time to relay a clear message to the supply chain of what the buy-in/promotion is, any monetary benefits to resellers, how the message should be communicated, and who will be communicating it. Running too many promotions at once or if the promotion details are not clearly explained can create too much noise coming through the channel and end up hurting the distributor’s business.
  • Choose to partner with the right people. The right partners are those who protect the manufacturer’s interests by actively promoting their selling events, choose to engage with outside product reps, stay within the boundaries of their proposed selling/pricing structure, and seek more opportunities to sell the manufacturer’s brand over the competition. This can be additionally beneficial when your distribution partners are working within larger organizations. Finding a way to parlay your distribution model to go directly to the end user via a distribution partner for a guaranteed purchase and nationally recognized buying power is a great way to strengthen the brand the manufacturer sells.