What does the Distributor need to do

It is imperative that a meeting takes place with both Manufacturer and 'Poor Performing Distributor' around the table. At that meeting both sides must state their aspirations for the business. Invariably the Suppliers aspirations will be more ambitious than those of the Distributor. The skill now is to bridge the gap between what the two parties aspire to. What does the Supplier need to do to help the Distributor perform better, and by when? What does the Distributor need to do to make more sales, again by when? What do both parties need to do to resolve the issues? Again, planting seeds is important, so that the Distributor develops ideas along the lines of the Suppliers thinking. A specific action plan needs to be put together to meet the immediate objectives, with a longer term ongoing plan to sustain the higher levels of business, once growth has been achieved.

Formalising a reporting structure is a key strategy. Careful consideration regarding a format is important. Too complex and the Distributor will procrastinate, or even worse, ignore. It needs to be easy for the Distributor to deal with. It needs to be in a format that allows the Supplier to benchmark each Distributor.

The frequency of reporting is also a consideration. For high volume fast moving products, perhaps a Monthly report is needed. With longer sales process items (eg Capital Equipment) a quarterly report may suffice.

Expect some resistance to formalised reporting. The Distributor may need to be coerced, even incentivised. Explain that reporting from all Distributors will allow a better flow of success stories and cross referrals, hence greater business opportunity. And for those who stubbornly refuse to report, and are not performing well, now is a chance (contract allowing) to sever business relationships.

There will always be an element of 'Us and Them'. And of course the Supplier must respect the fact that the Distributor has other priorities too, as they are likely to represent other suppliers. However, getting the Distributors together once every 12-18 months for a conference, training and intelligence sharing event is likely to pay dividends for the Supplier. It will engender a sense of worth and belonging for the Distributor.

"All this is all very well, but my Company has 25 Distributors, they are based anywhere from New Zealand to Alaska, Singapore to Brazil. How can I reasonably be expected to do all this?" A very reasonable question. First, a network of this size will need more than one person to manage it. Second, it is important that you take the time (albeit sometimes infrequently) to visit all Distributors. For those far away, it can be prudent to engage the services of a specialist Sales consultancy local to the Distributor, who can monitor the Distributor with 6 or 12 weekly progress meetings, and instill good sales practice at the same time. An independent Sales consultant will understand the Suppliers objectives, the local culture and trading conditions, and provide an unbiased assessment of the progress and challenges.

It is interesting to talk to Supplying companies who believe the Distributor route has failed them. It is always the Distributors fault, or is it? Perhaps a recognition of joint responsibility may have yielded an all together different outcome. And perhaps now, on reading this, the realisation of this responsibility is becoming apparent.

Some Suppliers have recently stated to me that "We believe we can do an equally good job in the territory without giving away all that profit." I cannot argue with this view one way or another as there are many options to doing business. Of course each come with a cost associated to them. Careful consideration of overheads, employment, local laws etc are vitally important.

The underlying message is that you need to work with your led strip distributor to gain the rewards. Both time and money must be invested. Mutual respect and spirit of cooperation are key.

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