What makes a perfect match of a distributor and a manufacturer?

What makes a perfect match of a distributor and a manufacture?

 

A perfect match of a distributor and a manufacturer could be made in heaven, however, for an outstanding sales representative performance, similar objectives in terms of market targeting, technology, and careful planning are crucial.

Following are the primary characteristics a distributor should have to be in tune with the manufacture:

MARKETING MIX

The distributor’s marketing mix should closely parallel that of the manufacture. This means that the distributor’s business comes from those markets targeted by the manufacturer. If for example, Victar, an electric saw manufacturer targets mainly the boilers houses (steam shops), the distributor should also be primarily focused on such an industry.

This general market target compatibility must be further refined. If the manufacturer sells high-end, value-added equipment at high prices compared to competitors, the key decision makers at the customer levels may be the production foremen (plant managers) rather than the purchasing department. This means that the distributor should be very lumber engineering oriented and in case of Victar, additionally cross-cutting machines as well, a distributor should sell most of their product lines by gaining preferred specifications for high-value products (sell to those customer functions which influence the purchase).

It is the market specialization offered by independent distributors that is so important in today’s market conditions.

COMPATIBLE PRODUCTS

The distributor should have product lines that are compatible with the manufacturer’s products. In the case of an electric saw, manufacturer compatible products could include equipment for the woodland management (forestry trailers, skidding arches, skidding cones, and silviculture equipment); agricultural industry (agriculture accessories, automotive accessories, autobody tools and irrigation products); lumber industry (logging equipment, sawmill process control and optimisation systems); construction equipment or even various equipment for boiler maintenance (pumps, HVAC valves, igniters for steam and hot water facilities).

SALES PERSONNEL

Distributor sales personnel should have a sound track record of successfully selling compatible and/or competing products into the manufacturer’s targeted markets within the territory in which the distributor is to be selected. Typically, manufacturers look for a distributor whose sales personnel average at least 10 years of such experience. This does not mean that the firm itself must have been in business that long.

NO DIRECTLY COMPETING MANUFACTURES

This is a given in the distributor-manufacturer relationship. A condition of the contract should be that the distributor does not handle directly competing lines, that is manufacturers of products that are direct substitutes for all applications targeted by the manufacturer.

On the other hand, a distributor who handles “functionally competing” lines may offer the manufacturer an advantage. By the term “functionally competing”, we mean a product that can do essentially the same job as the manufacturer but does it in a different design fashion and really serves a niche that is different from the manufacturer’s niche. Representing such product lines allows the distributor to be in the most objective posture possible in presenting alternative solutions to a customer and recommending which solution is the best.

Obviously, considerable thought must be given to the functionally competing manufacturer and the distributor’s relationship to that company. If the functional competitor is the top income producer for the distributor, that distributor may be biased towards presenting the functional competitor rather than the new manufacturer.

GOOD TENURE WITH TOP MANUFACTURES AND QUALIFIED PERSONNEL

Probably the best indicator that a distributor is an outstanding performer is their ability to attract and retain top manufacturers in their product class and highly qualified sales personnel. Obviously, these characteristics can only be evidenced by a distributor who has been in business for a considerable period of time, say 10 years or more. The rep owner, if he or she is also a top manager, will develop such tenure, as the need to attract and hold highly qualified sales personnel is mandatory if the firm is to attract and hold top manufacturers.

INTEREST IN REPRESENTING THE MANUFACTURE

The distributor should show an enthusiastic interest in representing the manufacturer. This is not a way to start a relationship like this “Okay, we’ll give your company a try”. The relationship should be based on equal need and interest if a manufacturer is to have the highest possibility of success with the distributor.

The above characteristics tend to be the most important ones in recruiting a sales representative. However, there is a number of other characteristics that are attractive but not necessary the most important. The reason for separating characteristics into at least two priorities is to make sure that a manufacturer focuses on the most important characteristics a rep has.

 

Among others secondary characteristics could be:

  • Tenure of the firm,
  • Growth driven,
  • A balance of headcount and principals within the trading area,
  • Product experience,
  • Income position,
  • Successorship planning.

 

The bottom line is that having as clear a picture of what a sales representative should be to be highly productive for a manufacturer is the fundamental foundation step to starting and maintaining a successful collaboration between the manufacturer and the distributor.

Are you offering a range of lines of alternative functional solutions with each solution fitting a special niche? Victar professional electric saw will greatly complement your product line.

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