The manufacturer, distributor relationship is a win-win situation for both the parties. With the best of the practices and business terms this is the partnership that facilitate distributors as well as the manufacturers to reach their organizational goals
However, if this business venture brings you optimized it is on the other hand holds complications if not managed carefully can lead to failure.
The distributor manufacturer ties should be tactical or strategic?
It’s no new that all manufacturers-distributor ties work with the same approach some needs to be managed tactfully while some are strategic. However, the key factor to success for both the parties remain on the same point defining whether the relationship is strategic or tactical
How can one identify a strategic relationship?
A strategic ties nurtures with closer collaboration from both associations in terms of marketing, branding and product development. A strategic ties doesn’t bound a distributor to forcefully push the product in the market but also it allows distributor to collect feedback from the supply network; including the final consumer feedback and insights, leading to product improvement and innovations along with changing demands of the consumers in the diversified markets
A wholesale distributor is the key expert on understanding the consumer behavior, while the manufacturer excels designing, developing, and offering products. In strategic alliances if the manufacturer makes efforts to introduce products into the new markets, similarly, expanding new markets and carrying new types of offerings rests with the distributor in several ways! Hence, the rewards are obtained by both parties that exceeds beyond simply selling bulks.
How a tactical alliance works?
A tactical ties among the manufacturer and distributor fall under restrictions. It mainly focus on increasing sales often times leaving behind other significant activities. Since manufacturers hold responsibility for creating a product, while distributors take responsibility of handling the logistics and marketing to help those products reach the final consumers
Often the distributors are known as the box pushers though calling it an unfair characterization is not an exaggeration, however, it sheds light on how a tactical distribution relationship might be perceived from a manufacturer’s point of view
A tactical relationship is somewhat finds an easier alternative, consequently both the parties hold equal obligation at how to make the alliances more strategic, or else the coalition may go through the possible loss of a significant source of revenue
What if a manufacturer belongs to apparel industry are the challenges same?
Once we have come this far understanding the manufacturer-distributor relationship its’ evident that both the associations must make major efforts to attain shared objectives, while doing so some of the challenges faced by manufacturers irrespective of their industry
- Maintaining the brand identity as the product go through several distribution network
- Bringing into the highly professional sales talent to sell their products
- Building strong ties with the potential bulk wholesale clothing distributors, reps and customers
On the contrary a wholesale clothing distributor also goes through a lot since they are independent businesses and their goals cannot always align with the manufacturers leading to:
- Failure to understand and manage with the business ties
- Lack of support
- Failure to achieve shared objectives
Whether tactical or strategic, manufacturers and distributors need to keep in mind that the significant endurance to maintain and grow. What difficulties have you noted in your manufacturer-distributor relationships?
