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How to Manage Distributor Networks

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Distributor NetworksWhen growing a retail manufacturing business, new distributors become one of the most valuable assets in the supply chain. All too often, however, these relationships can quickly become adversarial and inhibit the growth they were originally created to encourage. There are a number of ways this can be avoided, however, with a little bit of time and consideration, turning distributors into a long-term support network that can easily multiply the bottom line with a minimum of effort.

First and foremost, as mentioned above, is taking the time to actually become familiar you’re your distributors and how they operate. Check out their business from top to bottom, and contact their local Chamber of Commerce or equivalent to ensure they’re operating in good standing. In many overseas markets, it’s also extremely beneficial to learn what commercial and political ties they may have. By extension, learn everything possible about the market they operate in, and become familiar with the ins and outs of their daily business. Try to speak to sales managers below the owner to get a sense of how the business operates, as the owner is naturally going to spin everything to their best advantage. By demonstrating commitment to the relationship, it’s possible to encourage the same level of commitment from them.

Once you know all you can, make sure that to set expectations for the relationship. Distributors need a certain amount of support from the manufacturer, including things like product samples, marketing materials and technical support, although this will vary depending on the industry involved. Remember that your distributors should be considered an extension of your business, not just a B2B customer, and they should be treated as such.

However, while they are an extension of your business, it’s important not to overstep your role as a manufacturer. Don’t spend your time focusing on how they handle end-customer sales, or how they set their end customer pricing, as that’s one of the main reasons you’re working with distributors in the first place – so let them handle it. Establish expectations for both parties, and then make sure to deliver on your end, as this will, in turn, establish precedents for receiving the same consideration from them. As in any business venture, make sure there is a focus on accountability and integrity.

For any manufacturer or retailer looking to expand, whether it’s overseas or here at home, quality distribution networks are absolutely vital. If you take the time to set up the relationships to be beneficial to everyone involved, you can be sure that your growing retail business will stay in bloom.

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