Choosing a Right-Sized Distribution Partner in the New Economy

Choosing the right-sized distribution partner can increase a manufacturer’s competitiveness. “Small” doesn’t have to mean limited capabilities or higher expense.

In the new economy, customer is king again. In Distributors Secure Role With Extra Services, EBN outlined how the distribution channel strives to add value for both customers and suppliers.

Manufactures shopping for a right-sized distribution partner want value. This includes customer experience, competitive pricing, and, ultimately, revenue generation. Personalized service, a nimble infrastructure, and a sense of ownership will ensure a manufacturer receives the best value proposition. When devising a distribution strategy, suppliers should compare total cost of ownership models by taking into consideration component costs, available support services, and time to market.

Small or specialized distributors are organized to work closely with suppliers; understand their product roadmaps; and provide personal attention. The right-sized partner should be flexible enough to respond to industry trends and changing design needs. Fewer processes and people stand in the way to rapid market introduction. Larger manufacturers can benefit from utilizing the niche distributors as well: specialty channel partners focus on only a few lines so suppliers receive more attention.

A good channel partner will have excellent personal contacts within the suppliers’ sales and applications teams. This can translate into a big advantage for any manufacturer. Suppliers should be able to consider their distributors as an extension of their technical staff, engineering, QA, or purchasing. A good distributor is an excellent conduit for ideas of entirely new products or adding features to an existing product.

For customers, niche players provide value by means of pre- and post-sales support. This should include detailed product selection, extensive technical support, and worldwide project registration.

Successful small distributors operate innovatively, listen to customer needs, and provide value through personalized services. They offer applications support and direct factory access and local inventory and flexibility in meeting logistics goals. (Remember the value of being remembered by name without navigating a huge phone tree?) In summary, the approach is customer first -- the value of each and every customer is always greater for small businesses.

"Small businesses are the essential engine of the American economy, generating two-thirds of U.S. jobs and roughly half of our GDP," according to government reports. For a small or midsized manufacturer, finding the right-sized partner is a competitive advantage.