A recent study revealed that around 82% of manufacturers and 92% of distributors agree that differences exist in their working relationships. The notable part is that both of them are aware that these differences are causing negative impact on sales and profitability.
The reason for these disagreements is mismatched expectations, which arise due to hasty pursuance to make quick profit. Researchers say that distributers show their commitment to only those products which give them better ROI. They fail to promote other products thereby offending manufacturers. Distributors have a different take – they that manufacturers do not guide them in the proper direction.
What Can Be Done Then?
- Manufacturers and distributers must clearly set out the fundamental purpose and expectations of their collaboration.
- Manufacturers must present a detailed report on the demographic diversification of their products. It will reduce conflicts in market.
- Apart from this, the manufacturer must steer away from the traditional mould of “Make and Sell Stuff”. They must accept that it is not the product but the information and aptitude that impart competiveness.
- Both the entities must understand that instead of talking about market coverage, they must focus on collection, administration and sharing of information. It will aid in gaining an edge over competitors.
- Distributors are skilled in sales and often lag in technical aspects of marketing. Manufacturers can conduct marketing sessions for their distributors once a year to educate them in this area.
Use these ideas to impart value and direction to relationships while increasing trust between manufacturers and distributors. It is also essential to develop objectives that are customer-centric, explicit, mutually beneficial and practical for their industry.