How Manufacturers Undermine Distributors

The manufacturer-distributor relationship is vital to many businesses, yet it’s fraught with challenges and conflicts.

We’ve examined distributor strengths and shortcomings in recent articles. Let’s take a look at some of the ways manufacturers undermine distributor relationships and damage their own sales channel in the process.

The primary reason distributors exist is to get products into customers’ hands. But in respect to sales, marketing and customer relationships, distributors say manufacturers:
  • Provide too few leads
  • Have unrealistic sales expectations
  • Expect distributors to buy large quantities of stock
  • Are removed from the marketplace
  • Focus on their products and selling
  • Don’t understand the customers
  • Don’t understand what customers really want and need

Distributors need to understand how products work and perform in varied environments and applications. However, in respect to products and technical support, distributors say manufacturers:
  • Don’t provide sufficient training to help distributors effectively sell the products
  • Don’t provide enough technical support to distributors and customers
  • Don’t provide technical support people with sufficient technical knowledge

Business management and money conflicts are a source of common complaint. Distributors say manufacturers:
  • Are not committed to them
  • Don’t provide e-business options to expedite transactions
  • Are too rigid on pricing
  • Invoice distributors inaccurately
  • Compromise commissions and overrides by selling directly to customers
  • Make too many mistakes result in slow deliveries, incorrect shipments and difficulty in processing returns

Like any business relationship, trust and mutual commitments are important. Distributors say manufacturers:
  • Aren’t loyal to the distributor
  • Won’t allocate exclusive sales territories
  • Don’t communicate with the distributors
  • Don’t involve distributors in goal setting and planning
  • Don’t build strong relationships with distributors

Are you a distributor? manufacturer? Do these hotspots sound familiar?

It's clear there's an underlying current of conflict and dissatisfaction that creates unnecessary friction between manufacturers and distributors. That undercurrent in turn adds cost to the sales process and hampers productivity and efficiency.

These factors reduce profitability, and when that happens, everyone loses.

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