Distributors are an important sales and marketing channel for small businesses. They enable you to deal with small or geographically remote customers that your sales representatives could not reach cost effectively. Distributors may agree to market your products exclusively, or they can sell them alongside those of your competitors.
Set Marketing Objectives
It’s important to integrate your distributor strategy with your overall marketing objectives. If you want to expand your business in a particular market sector, look for distributors with experience in that sector. You may want to grow your business in other states or nationwide; find distributors who have outlets in the territories you are targeting. If your overall objective is to grow business by strengthening relationships with your most important customers, consider allocating responsibility for small customers to distributors. That frees your sales team to concentrate on key accounts.
Research Potential Distributors
Before approaching distributors for the first time, research their businesses. By visiting the distributors’ websites, you can find out the type of products they sell, the locations they cover and the companies they represent. You can also find out if they offer a technical support service, which may be important for the types of products you plan to sell through their outlets. This research helps you identify the most suitable distributors to meet your marketing objectives. Consultants Anderson Baillie notes that many companies find their distribution networks perform poorly because they were the wrong distributors to recruit in the first place or their focus has moved in new directions.
Present Your Company and Products
If distributors are important to your business, ask one of your sales representatives to take responsibility for developing channel sales. Prepare a presentation that the representative can use in meetings with distributors. Include information on the sales potential of your products to show distributors how your business can benefit theirs. Outline the support you will offer distributors, including product training, marketing funds and promotional material. Set out your requirements for the relationship, including the discounts you will offer, the distributor’s minimum order value or stockholding level and your commercial terms.
Help Distributors to Sell
As well as selling in to distributors, you must help them sell to their customers so you can increase your total sales. The consultancy Pure Channels describes this as a process of driving business growth through targeted and measurable channel marketing programs. You can build sales by forwarding sales leads to distributors from your marketing campaigns, recommending your authorized distributors in your marketing communications and running joint marketing campaigns. You can also set up incentive programs that offer distributors rewards for selling more of your products, such as higher discounts, additional marketing funds or rebates.