Page 31 - UnderstandingJanSanRedistribution_flipbook

While the wholesaler has a high interest in converting the manufacturer’s existing direct business to
redistribution, the manufacturer often has a higher interest in developing new business to new customers
via wholesaler. In fact, failure to realize anticipated levels of new business is one of the manufacturer
community’s leading causes of dissatisfaction with wholesaler programs. A planned and shared approach
to customer conversion on behalf of both the manufacturer and the wholesaler is the best way to prevent
misunderstandings in this area.

Customer Penetration Plan

Priority 1 — Conversion of Existing Shared Customers

Manufacturer’s Wholesaler’s
Target Customers
Customers

Priority 2 — Conversion of Existing Priority 3 — Penetration of New
Direct Customers to Wholesaler Customers by
Wholesaler Service Manufacturer

As this diagram indicates, the first course of action should be conversion of the manufacturer’s existing
Target Customers who are already being served by the wholesaler on other lines. Getting them to add the
manufacturer’s products onto their regular wholesaler order should be a relatively simple matter, provided
the communication from both manufacturer and wholesaler is consistent.

And while manufacturers are eager to penetrate new distributors via redistribution, it is prudent to first
focus on converting the remaining Target Customers to wholesaler. These are the small-order distributors
who are already buying from the manufacturer, but are not customers of the Re-D. Converting them to
wholesaler service will help create the critical mass of volume which is necessary to make the program
work for all parties.

Once this has been established, both manufacturer and wholesaler should turn their attention to selling
the manufacturer’s product line into other distributors presently being served by the Re-D.

It is critical for manufacturers to understand that building business by penetrating new customers via
wholesaler is their responsibility. While wholesalers will generally support these efforts, and some new
volume is likely to materialize without any action on the manufacturer’s part, it is only through intentional
and ongoing sales focus that the full potential of new business through wholesaler can be achieved.

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