Why do discussions between distributors and manufacturers usually revert to price? In this month's MDM Executive Briefing episode, Bob Conti of the Alexander Group and Sales Apex says part of the reason is their initial approach to the partnership.
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He says usually companies approach partnerships from an internal perspective – looking at what they need and how they can get that from their suppliers or distributors. "Real partnerships start from the other perspective – what is it you need, and how can we help you fulfill those needs? Otherwise the discussions start to revert back to price," Conti says.
In the program, Conti defines partnerships and how distributors and manufacturers can work together to build profitability. He recognizes this is a large task and recommends distributors and manufacturers find partners they can trust – that they already have a strong working relationship with – and to start small. Choose one channel partner, and find one area you can strengthen. In the episode, Conti explains one tool they can use to find opportunities: process mapping.
Another place to start? Recognize that manufacturers and distributors have different strengths and that each channel partner can leverage those strengths to improve profitability up and down the chain.
"Understanding what your strengths are is really going to help when you come together and start thinking about partnerships," he says.
Watch Conti's presentation on strengths and process mapping below. Listen to or download Part 1 plus an interview with Womack Machine Supply CEO Mike Rowlett at www.mdm.com/executivebriefing.