The supplier-distributor relationship can be mutually beneficial for the parties involved. However, it can also be frustrating, unproductive and even damaging to a business. Building a long-term relationship with distributors is not easy, but it can be extremely worthwhile. Here are some actionable strategies to consider.
Set and Maintain Expectations
It’ll be highly challenging and perhaps impossible to have a fruitful relationship if both parties don’t know what to expect from the beginning and throughout the entire partnership. Suppliers can get started on the right foot with distributors by having in-depth conversations about their business models, finances, company values and other details.
The first step is to find potential distributors and put them on a shortlist. Productive discussions with those parties generally fall into four broad topic categories. They comprise the company’s background, process, experience level, logistical needs and values. Having these lengthy conversations irons out expectations and gives everyone plenty of chances to get needed clarification before deciding whether to proceed.
However, maintaining what’s expected in the supplier-distributor relationship is also essential. Suppliers must prioritize holding distributors accountable while remembering that difficulties will occasionally arise. The COVID-19 pandemic was an excellent example of a global event that put many distributors under unprecedented strain. Thus, maintaining expectations also means being understanding when necessary and working together to overcome any momentary setbacks.
Using a distributor scorecard is one example of a transparent and commonly used method of indicating what’s expected. One approach is assigning points based on the number of deals won and lost. However, suppliers must remember that deals aren’t everything regarding distributors. Has the company being evaluated gone above and beyond to attend training sessions or other educational engagements? Is the distributor typically responsive to the supplier’s attempts to engage by phone or email? If so, those characteristics matter and should factor into the overall score.
Give the Distributor What They Need to Succeed
Suppliers should think of distributors as extensions and reflections of their business. Distributors are most likely to agree that the relationship is promising if they believe they have all the information and resources necessary to make the venture a profitable one. They typically don’t have time to market products for suppliers. That means they’ll probably want hard data about how well the product is selling and why that success is likely to continue.
Distributors will also appreciate having product brochures, spec sheets, images and any other branded content a supplier might offer. That way, they can engage smoothly with customers interested in the product. Distributors that don’t have enough supporting information to handle customers’ queries won’t feel supported in the supplier-distributor relationship, either.
It’s a good practice to get into the habit of having phone conversations with suppliers at least quarterly. During those discussions, ask them about their recent interactions with customers. Did they feel they had everything to perform well in their roles? If not, what could a supplier do to change that and get them better equipped?
Suppliers should also consider that distributors are often the point of contact customers use to determine whether certain product improvements or new releases are in the pipeline. That’s because goods move from distributors to vendors or retailers. Thus, if a supplier is also an item’s primary manufacturer, they might get feedback directly from distributors about what customers are happy with and what they’d like to see next. This is one example of how distributors can behave as clear business partners and must be treated as such.
Strengthen the Shipping Process
Relationships could break down if distributors can’t get products from suppliers reliably enough. A good starting point is to evaluate internal processes. What’s happening at a supplier’s facility that could negatively impact whether distributors get goods on time?
Focusing on enhancing inventory control is also vital for a strong distributor relationship. Real-time tracking systems can tell suppliers how many specific products they have on hand. That accelerates the shipping process, and downtime is less likely to happen.
Tracking systems that tell what happens to parcels once they leave the shipper’s facility is also essential. That’s particularly true if the goods are fragile or must remain in temperature-controlled environments. Internet of Things (IoT) sensors can monitor a package’s condition, showing precisely where the supply chain’s process broke down and why.
Depending on what happened, such incidents may warrant the supplier getting in touch with courier companies or similar parties to stop the issue from happening again. Keeping relationships with distributors strong for the long term often means suppliers must be proactive and deal with matters restricting a distributor’s prompt access to goods.
Suppliers should also get feedback from distributors about packaging. How often do shipped goods arrive in sellable condition, ready for retail outlets? Occasional breakage is inevitable, but tracking how often it happens is good practice. Suppliers that spot adverse trends or get negative feedback from distributors may need to tweak the shipping materials and change to more durable options.
Celebrate Distributor Achievements
Distributors can be extensions of brands. Customers that engage with them often perceive they’re interacting with the manufacturer or supplier simultaneously because the lines between those roles become blurred. These realities are why it’s so important for suppliers to emphasize how much they value their distributors.
One way to do that is to have annual awards ceremonies for outstanding distributors. Appliance brand Maytag does that to call attention to distributors’ hard work and brand commitment. However, suppliers have other, less public ways to show distributors how valuable and appreciated they are.
Phone calls or gifts are two starting points to nurture the supplier-distributor relationship. However, suppliers must not overlook the worth of in-person meetings when possible. Perhaps a supplier is within a half-hour drive of a distributor’s headquarters due to a business obligation. Setting aside time in the schedule to take people from the distribution company out for a nice dinner could speak volumes. Besides conveying appreciation, such face-to-face meetings let suppliers and distributors discuss the future.
Start Improving the Supplier-Distributor Relationship Today
A business relationship between suppliers and distributors takes ongoing work from everyone involved. However, these tips can help such partnerships become fruitful and enduring. Besides being mindful of these things, suppliers should always prioritize clear communications. That makes it easier to work through challenges and stay on track for success.
