by Richard Vurva

Change never comes easy, especially when it affects your wallet. I started thinking about that subject after I received an e-mail from one distributor and had a telephone conversation with another, both of whom are specialty distributors.The e-mail came from a cutting tool distributor who is disturbed about the trend among some manufacturers to establish activity-based or functional discount structures. I wrote about that topic in the story “Pay or no play” last issue.

The distributor believes that manufacturers don’t appreciate the value of a highly trained, knowledgeable distributor sales force. He gets especially annoyed when a manufacturer demands that he send his salespeople to their training schools in order to qualify for a special discount. In most cases, the distributor says, his salespeople know more than the manufacturer’s own reps.

Not long after receiving that e-mail, I had a conversation with a safety specialist. He’s irked when manufacturers of safety products expand their distribution network by authorizing general-line industrial distributors to sell their products. Doing so adds another competitor to an already crowded marketplace.

In both cases, the distributors have viable points. Knowledgeable salespeople and distributors with specialized product and applications expertise offer unique value to manufacturers and should be recognized for that value.

On the other hand, those manufacturers are also striving to build their brands and hang onto or grow market share. Who can blame them for experimenting with new discount structures or expanding into new channels if that will help them achieve their goals?

National chains, general-line industrial distributors and catalog houses give them exposure to a wider marketplace than the local specialty distributor can provide.

The answer isn’t for distributors to complain when manufacturers change their discount structure or the makeup of their distribution network. Rather, specialty distributors should welcome a system that recognizes the unique value they bring to the channel.

If the specialty distributor’s salespeople are as good as they claim, they ought to be able to win more than their fair share of business. If they can’t, maybe they’re not as special as you might think. If that’s the case, then who is to blame?

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