Distribution Channel Management
Incentives for intermediaries
It is possible to motivate counterparties japan phone number in the distribution line of goods using incentive methods (bonuses, discounts), or using partnership methods (focus on mutually beneficial fruitful cooperation over many years).
If the vendor treats the chain participants as partners, then all the work of the channel is planned jointly, the terms of cooperation are special for them, they are provided with advertising support, even assistance in training sales personnel is possible, etc.
If we are talking about medium-sized businesses, then such companies benefit most from training events and dealer conventions, as well as developing their own rules for displaying goods for merchandisers.
Incentives for intermediaries
Let's look at an example of a medium-sized company in the industry that supplies consumer goods. As a result of an audit of the business model and distribution channels, it turned out that, despite the correct and successful selection of channels, the costs of sales are still too high due to the turnover among dealers.
The reasons for this situation were investigated separately. It was found that dealers are quite satisfied with the quality of the products, but the vendor's attitude towards them causes a lot of negativity and complaints.
For example, the manufacturer never listens to the wishes and ideas of intermediaries and simply gives them orders as if they were his subordinates, without even trying to conduct a dialogue on equal terms. The company's management was surprised that dealers were making reasonable proposals that could increase the profits of all participants in the distribution chain. It was decided to hold meetings with intermediaries once every six months. The company fully organized and paid for these events. Dealers became much more loyal and motivated.
Communication policy, control over the communication system
This is an important factor in managing interactions with intermediaries. If the manufacturer takes control of the checks, it can influence the work of the entire channel in its own interests.
Usually controlled by:
final prices;
quality of services;
service technologies;
compliance with the assortment plan;
frequency and regularity of purchases.
If the vendor is not in a position to dictate terms to intermediaries, then at least it can increase information exchange with dealers. And, of course, do not forget about the most basic type of control that every supplier must exercise: attention to ensuring that payments are made on time.
Communication policy
Another real-life example on the topic of distribution channel management methods. The management of a company supplying household appliances was very surprised to find that only a few items from the vast list of products had high enough sales figures. And these were far from the most profitable products! The audit findings were mixed. Dealers were actively purchasing popular items because they already knew how to sell them well, but they were not interested in the unique features and characteristics of many products and were not aware of their competitive advantages.
We decided to periodically organize training presentations for intermediaries, where all the advantages of each model were revealed. At the same time, some positions, as it turned out, were really not interesting to the buyer. We decided to throw such goods out of the assortment. As a result, the total profitability of the manufacturer's sales increased by 5%.
Information activities were supplemented by control checks of dealers (using mystery shoppers) and monitoring of whether they apply the information received in their work and whether they recommend certain models of equipment to buyers.