Distributor management: Hiring a distributor
Whereas the previous article dealt with selecting a distributor, this one is about “hiring” a distributor. How to keep a distributor passionate and deliver on their promises. Agreements are important. Below are a few topics related to agreements:
- Sales Targets vs Effort Commitment: realistic numbers and sales and the effort and time frame that accompanies them. At what point can you train their sales force so they have all the information they need?
- Market information and call reporting: with which narrative to use for (key) customers, what information do you receive back, how do you stay involved.
- Conditions and terms of delivery: which inco term, minimum order and deliverables? Payment arrangements? Who is responsible for commercial/financial support queries or customer complaints?
- Prices and validity: Maturity of prices and condition of change.
- Procedures: What are the delivery conditions (how do orders arrive, delivery time, shipping time, etc.) If out of stock? Do you send samples?
- Probationary period and renewal rights: Under which conditions can you break away from the cooperation or under which conditions does the distributor have the renewal right?
- Termination clause: Things to be transferred, notice period, lead time (sales/stock).
These are just a grasp on what is reasonable to discuss with your new business partner. Next time, more on managing the distributor and how to make sure the business takes off.