The latest musing of the channel industry is the threat due to direct contact by vendors and worse, the distributors.
Direct selling is an old phrase and partners have always cried foul against it. But moving beyond this much-debated issue, I focus on the larger landscape of the partner-vendor relationship, which obviously includes the distributors.
Spare a moment and think of the time when the Greek philosopher, Hiraclitus coined the phrase Nothing is permanent except change. He was, perhaps, referring to the dynamics of relationship in the channels between the vendors and the resellers and now the disties, who were till hitherto a well thought-of bridge between the two.
Whenever one interacts with resellers on the evolution of IT business in India the obvious thing they would say is that the channel rapport with vendors is on the decline. The big fish are eating up the smaller ones!
The crystal clear refrain from the channel is that the vendors are eating into the resellers’ share of the cake. Be it services or warranty, the channels opine that vendors and distributors have become their rivals.
The ghost of direct selling has lately resurfaced in the southern states of Tamil Nadu and Kerala, and this time the allegations are against the big brother in the distribution chain. The refrain from the channels usually is that the modus operandi of the distributors for direct selling makes it a fit case of unethical practice vis-a-vis their commitment with the partners, as the distributors are selling products at Dealer Transfer Price (DTP).
Now without going into the elements of truth and supposed truth about these charges, one can conclude that the issue ought to be looked into in its entirety rather than looking for piecemeal solutions.
Over the years, there are more than one reason that have led to erosion in mutual confidence between the channel partners and two other elementary forces in the channel network the distributors and the vendors.
Getting into shadow boxing among the key industry players is uncalled for. Thus, even if we see that the hoopla about single point solution offered to customers is simply anti-thesis for resellers, there is no denying that vendors, distributors and channel can actually compliment each other in terms of improving services and also help boost their respective business graphs.
Also, it is unfortunate that distributors are seen as competitors by the channels, where they were supposed to play the role of facilitators between vendors and the partners.
My humble diagnosis is that the worst mistake a vendor or a distributor could make is to infringe on the customer relationship that his channel partner has developed. Once that happens, the partner will look upon the principal and the distributor as the looming threat and will find ways to exit the situation. This can only spark off wrangles.
No vendor can deny that when it comes to post-sales services and warranty replacement, the ultimate responsibility rests with the parent company. Similarly, the role of the distributors cannot be understated either.
But the channel role is equally important and there can be no denying this fact. Considering the mindset of Indian consumers, most of them go back to the point of purchase for any problem. And since the first point of contact is the dealer, vendors and distributors ought to ensure that the channel is properly groomed and trained on handling service issues. Similarly, if the relation between the partners and the distributors sees a nosedive, the supply network, especially in smaller towns, would be disturbed.
Finally, to state the obvious, there exist certain gaps in terms of communication between the vendors and resellers and the resellers and the distributors, which are affecting the relationship between the two parties – the Badalte Rishtey to use a desi phrase.
Improving on communication to generate a healthy bond is the least that can be expected, as both sides cannot do without each other.
It’s from this unity of purpose that the partners, the distributors and the vendors stand to benefit. Nowhere else would the maxim, ‘United We Stand’ more aptly apply.