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Chapter 7: Getting the Most from Your Wholesaler

Redistribution Program

This chapter may represent the best opportunity for manufacturers who already have well- established
wholesaler programs. For various reasons, the business served through wholesaler is prone to being
treated with an “out of sight-out of mind” attitude by the manufacturer’s Sales, Marketing, and Supply
Chain people, as well as their sales and marketing agencies.

We believe that many manufacturers overlook significant volume-growth and cost-reduction
opportunities if they let their wholesaler business “run on autopilot.” Below we present strategies for
ensuring that your wholesaler program continues to provide value well beyond the initial growth stage.

To begin, wise manufacturers will establish working relationships with their wholesaler that go well beyond
the salesman/buyer level. Certainly the Supply Chain/Logistics people need to meet early and communicate
often in order to optimize the operational aspects of the program. The Finance people should likewise have
an ongoing relationship to ensure that all parties stay on the same page, and that issues and concerns
are addressed quickly and fairly. Regional Sales people should be familiar with their counterparts at the
wholesaler. And Marketing should be dialed in to the special needs of wholesalers, especially in terms of
maintenance and dissemination of product and pricing information. Forming productive linkages across
multiple functions will help to ensure that your program remains productive.

If you applied the principles in this guide when you developed your wholesaler program, it is based on
some expectation of lower costs, higher volume, and marketing value, vs. “going it alone.” You probably
defined the types of customers you would like your wholesalers to serve and the types you prefer to handle
directly. And you projected how your revenues and costs would be impacted when a distributor elects to
buy from wholesaler.
Now, how often do you check to see how reality matches your expectations?

Do you know:
■ whether your volume through wholesaler is going up, down, or staying flat?
■ whether the number of distributors buying your product through wholesaler is growing or shrinking?
■ how many of your distributors who buy from wholesaler are up vs. last year, and how many are
down?
■ how all of this compares to your direct volume?

Have you checked to see:
■ whether the distributors being served by wholesaler are consistent with your target set?
■ if you have small-order distributors buying direct that should be served via redistribution?

How often do you look into:
■ how billbacks through wholesaler are being handled, to ensure that you’re not double-paying?
■ whether your cost-to-serve assumptions still hold water?

And are your Sales Managers and Sales & Marketing Agencies working with their wholesaler counterparts
to identify and capitalize on new customer and new product opportunities?

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