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Tip: When Sharing Data with Suppliers, Establish a Bill of Rights

Trust is one of the biggest obstacles to sharing point of sale data in the channel.

With little exception, one of the biggest hurdles to distributors’ sharing point of sale data with manufacturers is trust. To get the relationship off on the right foot, channel partners should establish a bill of rights that protects the distributor’s data and frames data-sharing parameters.

From the distributor’s point of view, says Mike Marks in Sharing POS Data: An Exercise in Trust, a supplier shouldn’t have a problem signing such a document if they are planning to use the data to help the distributor.

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Concerns over sharing POS data in the channel are high. Distributors worry manufacturers will use it to go direct or that they will hand the data to competing distributors. Concerns are also high that manufacturers will not limit access to the customer-specific data within their organizations.

The document’s premise should be that the distributor’s data is owned by that distributor, Marks says. As part of the confidentiality agreement, the supplier should agree to protect the information and not use it against the distributor. For violations, channel partners agree to use arbitration.

“It’s a matter of the management of the manufacturer establishing the tone, and developing and maintaining a code of ethics and professionalism for their company that helps them develop trust. It isn’t something that happens overnight,” said Kevin Boyle of Industrial Distribution Consulting LLC.

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