Marriages of Manufacturers, Distributors a Difficult Balancing Act
It stirs memories of the difficult balancing act and sometimes rocky road cutting tool manufacturer Kennametal found when it operated an industrial distribution division while also managing independent distribution networks. It finally spun off its distribution units.
The reason given by Carrier for its purchase of distribution: The ...
It stirs memories of the difficult balancing act and sometimes rocky road cutting tool manufacturer Kennametal found when it operated an industrial distribution division while also managing independent distribution networks. It finally spun off its distribution units.
The reason given by Carrier for its purchase of distribution: The acquisition of E.B. Ward and Valair will strengthen our rapidly expanding sales and distribution network in California," said Geraud Darnis, president of Carrier Corp. "This will enable Carrier to serve our customers directly in this large and strategically important market."
You don't have to read between the lines to see why this strategy looks like a great idea on the surface. For a distributor, think about whether your market area might be attractive to a dominant manufacturer-supplier that might be seeing significant growth in your area. By buying a niche distributor, the manufacturer could gain direct coverage overnight. But where does that leave the distributor? Or the customer, for that matter? Too often the relationship that created the business in the first place gets mangled when a manufacturer tries to manage it directly.
This trend seems to cycle based on a combination of economic and market potentials. But it is short-sighted for a manufacturer to measure the short-term cost savings and increased revenue by bringing distribution under its roof. The history of independent distribution has repeatedly seen these marriages end up on the rocks. The intangible service qualities an independent distributor brings to the table simply can't be replicated within a manufacturing culture. There are too many conflicts built into the different cost structures and profitability models.
 |
|
| View the Top Distributors in 12 Sectors: | |
| 2011 Distribution Landscape Report: Access Now | |
Join MDM's Independent Distributor
Network 
Follow MDM on Twitter
Sponsored Links
- Cloud ERP, the next innovation in distribution software. Learn more.
- Get better eCommerce, an easier back-end, and increase revenue.
- Free GCommerce whitepaper: How to reduce transaction costs, streamline special orders
- Cloud ERP, the next innovation in distribution software. Learn more.
- Protect your revenue and grow your business with Cortera PulseTM
- NSK's P4Y precision-class universal bearings' multiple configurations reduce inventory
- Resources and training tools for distributor sales, management and more in the MDM Store
MDM Digital
 The Case for Mobilein Distribution Marketing John Sonnhalter explains why distributors should include mobile in their marketing plans and how to start. Watch now. iPad users: click here to view. |
 Economic Update:The Festering Euro-Crisis MAPI Economist Kris Bledowski analyzes the outcome of recent meetings about the European banking and debt crisis. Watch now. |
 Online Marketing Tipsfrom Bob DeStefano Many companies make the same mistake on their company websites. Do you? Find out. |
More Audio and Video Features from MDM: |
Think About It: |
Upcoming Programs
|
|
Training Resources
 |
 |
 |
 |
|||
|
Featured Article - MDM-Baird Benchmarking Survey: Distributor Optimism Returns $34.95 |
Management Tips from Modern Distribution Management $49.95 |
Inventory Management Best Practices with Jon Schreibfeder: DVD + Book $119.00 |
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers $249.00 |
| Title | Company | Location |
|---|---|---|
| Marketing/Sales - Advanced Supply Chain Business Intelligence Systems - Big Data Analytics | Scientel Information Technology, Inc. | Southeast Michigan |
| Marketing/Sales - Advanced Supply Chain Business Intelligence Systems - Big Data Analytics | Scientel Information Technology, Inc. | Southeast Michigan |
| Marketing/Sales of Advanced Supply Chain Business Intelligence Systems & Big Data Analytics | Scientel Information Technology, Inc. | Southeast Michigan |
| Credit/Collections Manager | APR Supply Co. | Lebanon, PA |
| Management Trainee | APR Supply Co. | Lebanon, PA |
| INDUSTRY SPECIALIST - Rubber Products | KAMAN Industrial Technologies | North East Area - CT, MA, ME, NY, RI, VT |
| Sales Account Manager - Energy Market Segment | TESSCO | Baltimore, MD |
| View ALL Wholesale Distribution Job Listings |
|
|
Industry Topics sponsored by
Distribution Trends
|
Economy
|
Management/Strategy
|
Interviews
|
Operations
|
Technology
|
Mergers/Acquisitions
|
Case Studies
|
Sales & Marketing
|
MDM Calendar
Mobile Technologies for Distributors with Steve Epner
Featured Products
Benchmarks & Best Practices: The Answer Book for Growth-Minded CFOs & Controllers
2011 MDM Market Leaders and Distribution Landscape Report
The B-to-B Online Marketing Toolkit:
A Step-by-Step Plan for Distributors and Manufacturers to Leverage Online Marketing
for Bottom Line Results
Leave a Comment