Importance of Distributor Selection Criteria

Introduction

• Do you want to know how to select a distributor?
• Do you have proper distributor selection criteria?

If you want to expand your business in the whole country, you should have a good distribution network. You should have a big distribution network including distributor, wholesaler, retailer, and dealers.

Partner or Distributor Selection Criteria

How can you grow exponentially with the help of proper criteria for the selecting and appointing distributors?

Selecting and appointing distributors involves the following activities:

• Conduct the due diligence of your partners or distributors accurately.
• Understand the pattern of the sales success and financial pattern of your partner or distributor.
• Check the balance sheet of the distributor.
• Check the profitability and Earnings before Interest, Depreciation, Tax, and Amortization (EBIDTA) of the distributor.
• Determine the amount of cash and debt of the distributor.

If your distributor is in debt, he will try to come out of debt with your help while you are seeking his help to succeed. 

In such a case, both of you won’t be able to succeed. So, distribution channel selection criteria play a vital role in the success of your business.

Recruitment Process Manager or Channel Partner Manager 

Along with a strong distribution channel selection criteria, you need to establish a recruitment process to expand your business in the whole country.

Hire recruitment process manager. He/she will perform the following functions:

• Check and search channel partners in all the territories of the country.
• Understand the succession planning of different territories.
• Identify the distributors and retailers who can replace the existing non-performing distributors and retailers.
• Collect the professional relationship data of distributors and partners.
• Forecast the sales of the company from different territories.
• Forecast the manpower required in different territories to expand the business.

Recruitment Package

• Provide great offers and a total solution to the distributors and partners. Give proper training and services to the distributors and partners.
• Make an exciting price catalogue for the distributors and partners so that they can estimate their Return on Investment (ROI) easily.
• Provide demo team support and marketing support to the distributors and partners.
• Show your media plan support, product customization feature, and testimonial references to the distributors and partners.
• Provide guarantee, warranty, free samples, scheme, and incentives to the distributors and partners.
• Understand the business of your retailers and distributors.
• Identify how your retailers and distributors are earning and losing money.
• Provide a clear goal to your distributors and partners.
• Provide an up-selling incentive to your distributors and partners.
• Invest some money and time on distributors and partners by attending their family functions, conducting corporate lunch, etc. to build healthy relationships.
  

In some businesses, you don’t require a distributor or retailer. You can go online or build some alternative channels to reach your customers. You need to understand which channel is required in your business.