Having set up more than 200 distributors in Asia for various businesses,
the following are some of the learning gleaned by iga -

The size of a channel partner is very important but the largest is not necessarily the best for you. You must have mind share on your product. You need over 10% of a distributor’s business portfolio to be of any importance. A mix of distributor size within a region is a good idea.

How do you know who a good distributor is? Don't rush into choosing ‘a’ partner which may easily turn out to be the wrong partner. It is costly in both time and money to get out of a “bad” relationship.

A large amount of management time and money is required to repair a mistake.
A mediocre distributor provides you with mediocre results
Be honest and straightforward in your dealing with your distributor.
You do not control your indirect channels. You MANAGE them.
Key to managing channels is building relationships.
The best partner is the one who sells the most products to make you the best returns. Don’t get confused by other non-financial factors.
Don't get tied into an exclusive agreement without a contractual volume commitment.
In the beginning of the relationship, the first 3 to 6 months, everyone is excited with the possibility of making money. Use this early time to build a good relationship and make sure you fulfill your obligations. Set the pace, boundary and expectations. Do more during this period, it will more than pay off.
Over communicate during the first 6 months of the relationship.
Don't just ask your channel to take inventory without a clear marketing strategy.
Your distributor must be willing to invest its time, money and staff resources. It is your responsibil ity to monitor if they are keeping their commitments. This is a full time job.
Keep a constant surveillance on the channel - you must act fast when changes occur.

Don’t meet competition. Beat it. Or it will beat you.

Employ both push and pull marketing approaches and always involve your channel partners when deciding on a marketing strategy.
Make sure you think of your channel partners when you make a company change.
There will be problems in your relationship. Be positive and professional in solving the early problems; respect the cultural issues.
Remember that your relationship is a strategic alliance. Your partner can team with your competitor.
When legal issues arise, understand the issue and listen to your partner’s position. Be on the safe side of the gray area. Do not risk your business on a bad decision. Trust your “gut feel” and don’t be pushed into doing something you know is NOT OK. Get legal advice and listen to them.
    Some Common Problems with Channels:
> expecting channels to do magic for you
> ignorance and arrogance when dealing with channels
> don’t spend time to understand what they do and what they do well
> not understanding the economics of channel marketing
> hoping that one channel can sell to every customer/market
> inconsistent company discount and product pricing decisions


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