A distributor's "other" set of customers

12 Dec 09 - Mark Klein

Most companies describe their “customers” as people who buy products and services from them.  Distributors, however, have another kind of customer - the manufacturers they represent - to whom they must sell themselves - and their value as a distribution partner. Their manufacturer partners are true customers in every sense of the word.

For a manufacturer, a distributor sells its services in getting goods through the channel to the ultimate end user. Manufacturers pay for these services in the form of commissions and with marketing development funds, or marketing co-op dollars. Distributors use these funds, hopefully but not always, to promote the products of the manufacturer supplying the funds.  These funds are often the core financial support for the distributor’s marketing efforts.