Distribution Channel Management

Just like the company’s own sales team, the distribution channel also works as a partner in increasing the sales of the company. The management of a distribution channel requires long term vision, consistency, transparency, fairness and relationship building focus.

Training

• The channel partners must be trained for product knowledge, the company’s sales processes, terms and conditions, competitive comparisons etc.
• Some regular motivation activities must also be carried out to keep up their enthusiasm and engagement with the company.

Deciding the Compensation Structure

• The company must decide the right discount structure which can motivate the channel partners to sell the company’s products.
• The discount must be enough to let the channel partners earn some money after covering all their expenses.
• Periodically, the company may come out with some schemes / special discounts / incentives etc. to motivate the channel partners to boost sales.
• Some companies encourage and support their channel partners in marketing promotion activities by helping them in execution and by sharing some costs with them.
• Some also fully or partially reimburse some other costs e.g. rent, manpower, storage, inventory etc.

Conflicts and Grievances Management

• Because of the complexities of the market and geographic realities, there may arise some conflicts among different channel partners.
• Sometimes, the channel partners may have some grievances against company policies, practices, product quality, prices or its salespeople.
• We should have some well-defined policy to take care of such conflicts and grievances.
• Any delay in sorting out the same may hurt the company’s sales performance, so the company must attend to them seriously.
• The main focus of the resolution approach must be promptness, fairness, long term relationship and transparency.

Tracking

• A weak or non-performing channel partner may damage the company’s reputation; weaken its customer base and which may result into lost time and sales for the company. So, it is necessary that the performance of all the channel partners is tracked by the company.
• There should be some regular tracking method by which the company’s sales team must be aware of the performance of the channel partners. The company must keep its eyes and ears open through its field sales force to check the channel partners’ activities.
• In addition to the sales going to the channel partners, the company must also track the partners’ activities to boost sales and strengthen the network.
• The company’s salespeople must regularly visit the channel partners for troubleshooting, relationship building and market development.
• It should also get feedback from the channel partners down the line to examine the performance of the higher level channel partners.
• The company must act on any negative or adverse reports about the performance and try to improve the channel partner performance.
• If nothing works, the company should switch its non-performing channel partner.

Ordering and Collection Process

• The company must establish a smooth process for receiving orders from the channel partners, dispatching goods for the same and receiving payments from them.
• All the terms and conditions regarding taxation, in-transit documentation, logistics expenses and penalty for delay in payments etc. must be clarified.
• The process for handling the in-transit damage must also be spelled out.
• If due to any reason the channel partner has to return some of the company’s goods, the process, terms and conditions for the same must be specified.

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