The Biggest Threat To The Channel? Manufacturers That Sell To End Users

By Stanley Louissaint, President, Fluid Designs Inc., ASCII member since 2014

The biggest threat to the channel is the same as it has always been — manufacturers. Businesses are constantly seeking growth and expansion. Part of this formula requires keeping investors and shareholders happy. The need for manufacturers to always have constant and accelerated growth has become the new normal but there are only so many ways in which this can actually occur.  Being a channel friendly company allows manufacturers to sell their products or services through the channel without dealing with end users. Through this distribution method manufacturers have the ability to sell their products directly to a channel partner who in turn will resell to the end users directly. This model also allows manufacturers to deal with a few partners who will in turn sell that product or service to multiple clients. Although this model works, it poses its own set of difficulties including courting the partners, making sure they understand your product offerings and lastly hoping that they buy-in to the value the product/service brings to the end user. After you overcome all those obstacles then you have to retain those folks. 

We, channel partners, can be temperamental at times. Issues can arise such as being unhappy with the product, pricing changes, lack of support, or simply no longer wanting to buy in to a brand.  When this occurs, manufacturers have no control over what happens with the end user, who may not even know who the manufacturer is, and to them that is another customer lost.

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