CPG Distributor Relationship Management: Best Practice

Image of logistics in action to illustrate distributor relationship management
August 15, 2023

If you’ve ever sighed about how your distributor relationship management is going, and how it could be improved, keep reading!

Organizational structures, as they evolve, can become haphazard over time. But your relationship with, and careful management of, your distributors is key to your brand’s success.

So – we’ll summarize three main issues here – linking your own challenges to the challenges your distributors face, and how best practice can bring best results.

1 Distributor Relationship Management Depends on Building Strong Relationships

Your challenge

You’re looking for a strong relationship with your distributors (your intermediaries) to provide the foundation of a valuable business partnership, involving

  • regular communication between you,
  • understanding of the needs and challenges both of you face, and
  • working collaboratively to solve problems.

You therefore need meetings – whether in-person or virtual – to help maintain this relationship.

The distributor’s challenge

However, one of the biggest challenges for partner distributors is managing their inventory. They need to keep an eye on their supply chain and balance having enough of your stock to meet demand – without overstocking and tying up their capital.

In addition, they need to manage the logistics of storage, transportation, and delivery.

Best practice

If you hold regular meetings, as partners, you can acknowledge their challenges and provide accurate and timely information about product availability, delivery times, and any factors that might affect their supply and inventory concerns. This helps build the strong relationship you need.

2 Your Distributor Needs You to Provide Support and Training

Your challenge

You want your distributors to be an extension of your brand in the market, understanding your products, your brand values, and your target customers.

That’s because you need them to be effective in selling your products – the more knowledgeable and comfortable they are with your products, the better they can sell them.

The distributor’s challenge

However, distributors often struggle to keep up with market information: changes such as new competitors, consumer preferences, or regulatory changes. Without your input, they’re likely to be behind the curve and fail to sell your products effectively.

Best practice

In order to solve the above problem, you need to support your distributor partners by:

  • offering marketing materials, training on your products, and promotional support
  • sharing market research, consumer insights, and information about your company’s future plans
  • communicating clearly any changes to your products or marketing strategies

3 Performance Monitoring and Feedback: A Two-Way Benefit in Distributor Management

Your challenge

Firstly, you want to assess how your distributor is performing. And you also want to recognize and reward high-performing distributors to motivate them and set a benchmark for others.

The distributor’s challenge

However, they need to make a profit! They’re concerned about pricing and margins to be competitive in the market!

Best practice

To solve this problem, you need to understand your distributors’ pricing challenges. Then you can work with them to develop a CPG distribution strategy around pricing that works for both of you. You can still regularly review your distributors’ performance to analyze

  • sales data,
  • market penetration,
  • customer feedback, etc.

But they will more happily accept your constructive feedback if you’re also working together on strategies around pricing issues to improve performance and profit for both of you.

Momentum CPG Can Help with Distributor Relationship Management

At Momentum CPG, we have over 120 years of CPG sales and marketing leadership experience. Distributor partnerships are a crucial part of success in CPG sales. Contact us to learn more and take your business to the next level!

Image attribution

Pin It on Pinterest