Channel Management 101:  How good are your distributor relationships?

Kim had North American distribution responsibility.  It was her job to ensure that she was working with the right distribution partner for each of her markets, that each disty had adequate stock to support the sales efforts, that new skus were set up efficiently and on time, that stock balancing was kept to a minimum, and that the disty sales teams were up to speed on her offerings. 

The USA economy had presented many challenges to Kim.  Her distys were stocking less and less, but she was always able to ensure 3 - 4 weeks of run rate inventory in the distys’ barns and they usually had more than sufficient stock to support promos.  Kim was proud of her low stock balancing and the respect and confidence of the sales team.

Kim’s Canadian business was very different from the USA business. The Canadian DMRs constantly complained of insufficient inventory at the distys, it felt like pulling teeth to get the distys to bring in even a small amount of inventory to support the quarterly promos, and the buyers were always asking for RMAs. 

Kim paid a hefty amount and attended a two-day Canadian disty tabletop marketing event in Ottawa and her eyes opened.  During set-up and non-exhibit hours she mingled with her local competitors and other exhibitors and she quickly realized she had been working with the wrong disty partners to support her markets.  She had made the assumption that the USA distys had the same focus as their Canadian offices.  Kim also realized that she had paid much more for the event than the locals did and she had gotten a lower traffic location.  She witnessed the rapport the buyers had with the local vendors and realized that, from California, she didn’t have the same connection to her distribution partners as her competition.

Are you confident you have the right disty relationship and you are minimizing the costs and maximizing its effectiveness?