Distributors are a set of intermediaries decided and chosen by the manufacturer to bring the products to the market most effectively with the lowest cost.
In business, manufacturing enterprises that want to bring their products to the target customers must go through distribution channels. Therefore, Enterprises that want to develop strongly must create multiple distribution channels and must be high-quality distributors.
In the Vietnamese market, a variety of distribution methods have appeared. Enterprises can choose an indirect distribution channel via the system of distributors or agents or distribute directly because the company opened a retail system. Or the distribution can be classified into three types including general trade (GT) channels such as markets, kiosks, shops; modern trade (MT) channel such as supermarkets, commercial centers, convenience stores; and other channels such as horeca, … These are the channels that require Enterprises to orientate and build their own distribution channel when manufacturing products to the market.
However, distributors may distribute our company’s products or may distribute other company’s products. Because they have a good finance, warehouses, sales forces and most importantly they have Customers, so they have certain powers. What should Enterprises do to attract such distributors? How to make them cooperate with us?
Enterprises must come to distributors themselves through sales or relationships. Enterprises must show their goodwill to cooperate with distributors, and Enterprises must actively investigate and research markets, introduce new products, adjust sales policies appropriately to motivate distributors to develop markets. Having the cooperative spirit to change the company’s policies through seasonal monitoring, the good management skills, in the center of the operating area, more prioritized if the distributors have a good relationship with the local market, ..
If Enterprises only focus on discounting to retain Distributors, which will create a big disadvantage to the profits of Enterprises. So to run in a long term, Enterprises should set up a reasonable distribution policy, including KPIs, discounts on each invoice, after-sales promotion policy, debt policy, etc. We should develop policies on the basis of each item or category so that distributors feel secure and comfortable to cooperate with Enterprises.
Maybe managers have not paid attention to the relationship between sales and distributors. Sometimes, this is the driving force that helps distributors to stick with the Enterprises. Because our culture creates “unnamed” relationships, each sales staff helps the distributor arrange the commodity, or sometimes sell products when there is a large number of Customers. This is a great score for Enterprises. Because besides the discounts, they will get acquainted with the staff they trust.
In addition, marketing activities at the sales locations also promote the needs to buy and show the goodwill and importance of distributors to Enterprise. Therefore, the display and advertising programs at the sales locations are extremely necessary.
Conflicts in the distribution channel are the stories with multiple volumes of enterprises whose distribution channels are inactive and much depend on large distributors. When conflicts occur, this will make consumers feel the inconsistency in the purchasing process, thenceforth badly affect the brand.
The necessary condition for a strong distribution system is the balance of interests between enterprises, distributors and the consumers. However, the sharpness, flexible adaptation to new reality is the sufficient condition for the stability and success of the distribution system.
Approaching distributors is a matter of policy establishment, staff management, promotion management, KPI management, etc., along with effective policy establishment.
In addition, Enterprises need to have technological solutions to strengthen distributors, maintain and develop distribution channels effectively. ESales Cloud DMS software with the mission to support Enterprises will help managers effectively set policies and manage their distributors.
Refer to our solutions Here