Remember when the Web was new and we kept talking about how manufacturers would go direct, and dealers would disappear? We called that "disintermediationä and it didn't happen.
The reason it didn't happen is that distributors and retailers really add something to the mix. Sometimes it's just the physical movement of goods. You need someone to get it out there. Sometimes there's a customer service component that only someone on the ground locally can handle. There are other reasons, too, but most manufacturers have found that selling direct might work, but it won't work if you cut out all of those folks in the middle of the chain. The reason is that you can cut the folks out, but you can't cut out the kinds of work they do or the special sets of skills they bring.
That's why lots of manufacturers are looking at ways to support their dealers, and that's happening in several different ways.
One way you support your dealers is to send them business directly. Remember that dealers are awfully nervous about what manufacturers might want to do to them in this new Digital Age, so you have to keep them in the loop. It isn't just a matter of doing the right thing. It's a matter of being perceived to be doing the right thing as well.
Support your dealers by sending them sales. You might do that with a dealer locator that appears on many kinds of sites. Consumers can type in, for example, a zip code and find the dealers that service that area.
Support your dealers with information. Information about the product is one of the big things that manufacturers have got. Major HVAC manufacturers, such as Johnson Controls, do this by passing information through their wholesale distributor sites.
What happens is this. Basic product information, search engine scripts and other devices reside on the manufacturer's server. There might be a configurator process that helps an architect configure a big rooftop air conditioning unit, for example.
The trick is that the features actually show up on the distributor's site. Technically what's happened is they're running off the manufacturer's site, but from the perspective of the visitor, they're happening right on the distributor's site. This can be used for configurators, for stock checks, for product information, and a variety of things.
Passing product information and features through the distributor or retailer's site keeps them in the loop and makes them look good. There's an advantage to the manufacturer, as well. That advantage is that the manufacturer suddenly doesn't have to take all of the kinds of routine calls and e-mail follow-ups that go with providing basic product information. Those become the province of the wholesaler or dealer, and it's part of how they earn their money.
That's the public phase of supporting dealers. There are some other ways to support dealers as well, and one of them is to give them their own special place to order. Start on this with your best dealers, then look at adding everybody that's active. Help them to place good orders quickly and easily. If you're a manufacturer, youâll get better orders, and youâll have your fingers on the pulse of real time demand data.
Making It Work
The best way to find out about what distributors and other dealers need and want is to involve them in the process. That's what Johnson Controls did early with its top HVAC distributors, and the result is an improved relationship as well as improved technology.
Created/Revised/Reviewed: 30 July 2002
This is only one Big Idea. You'll find more in Wally's book, What's the Big Idea? and in his Big Idea column. There's a complete list on the Main Big Idea page. You may also order the book by clicking here.
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