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What do you get when you combine a dynamic and informative speaker with invaluable networking over two days in Mesa, Arizona?  Attendees energized and inspired to proactively build effective relationships based on trust and understanding with their distribution partners.

At the two-day Executive Development Conference, up-and-coming distributor and manufacturer leaders joined distribution veteran and session facilitator Gary Moore to explore how to make distributor/manufacturer relationships more effective.  Held on March 12 and 13 in conjunction with PTDA's annual winter meetings, conference attendees also had the opportunity to network informally with more than 80 of the association's most active volunteers to build industry connections by using what they learned during the first day of the conference.

The Other Point of View

With experience as both a manufacturer and a distributor, Moore was well positioned to give both perspectives to help attendees understand the other point of view as well as develop skills and action plans to implement in their companies' relationships. 

Moore set the tone for the conference by using the concept of symbiotic relationships to explain the interconnected nature of the distributor/manufacturer relationship.  He gave an overview of the functions distributors and manufacturers perform for each other, benefits of leveraging the relationships, why customers buy from distributors and why manufacturers sell through distribution.  

He emphasized the importance of meeting new people and learning new perspectives throughout the conference. 

Moore put attendees to work in small group discussion sessions exploring each of four major areas critical to effective distributor/manufacturer relationships.

• What are the dynamics of the distributor/manufacturer relationship?
• What are personal, professional relationships?   How do they impact distributor/manufacturer relationships?
• What are the basics of effective business communication (specifically as it affects distributor/manufacturer relationships)?
• How do we manage distributor/manufacturer relationships (for effectiveness and mutual benefit)?

Key Takeaways

Each discussion group mixed distributor and manufacturer leaders, who were encouraged to be open with their perspectives as well as listen to others.  Following discussions of specific topics assigned, each group reported findings to all attendees.  This format gave the attendees an opportunity to practice small group facilitation and reporting skills in addition to discussing the topic at hand.   At the end of the conference, several attendees reported their key takeaways from the session:

• Sometimes the clichés used for the relationship get in the way due to different interpretations.  Some misleading clichés identified were:  "We're your customer" (often spoken by distributors to manufacturers), "loyalty" (which seemed to mean different things to different people) and "partners."
• Distributors and manufacturers have differing financial drivers.   For manufacturers, a primary financial driver is often market share leading to volume for their factories; for distributors, primary drivers are typically gross margin and cash flow.  Also, each group often has different personal motivators.  It is important to understand the drivers and motivators of the other and look for joint actions that help each reach their objectives.
• Business relationships often depend on personal relationships which make them work...or not.  It's important to focus on key personal relationships to facilitate manufacturer/distributor relationships.
• People consistently do business with people they like, believe, understand and trust.
• Different people prefer to communicate in differing ways.  Find out how your intended audience most effectively receives communication.
• One of the most important means of leveraging and managing distributor/manufacturer relationships is with joint strategic planning.  Moore discussed one-, two-, and three-stage joint planning processes and encouraged distributors and manufacturers to choose the one most effective for their relationships.  Distributors and manufacturers have joint responsibility for managing these key relationships -- and joint potential for beneficial or, conversely, counterproductive efforts.

Gary Moore's Tips

As the conference neared its end, Moore offered tips for more effective distributor-manufacturer relationships.

Tips For Distributors

• Understand your suppliers' evaluation criteria.
• Encourage and facilitate peer-to-peer relationships with key manufacturers.
• Establish your own internal manufacturer evaluation criteria.
• Professionally give manufacturers honest feedback on how they are doing.

Tips for Manufacturers

• Be clear about your channel distribution policies -- and follow them.
• Simplify procedures for distributors, particularly equipment specification and pricing for salespeople.
• Develop a large job early warning system with distributors.
• Create a distributor joint planning process and implement it.

Download materials from the conference.

Celebrate the Middleman
Flipchart Notes
How to Conduct Strategic Planning Handout