Distributor problems can happen when a startup launches a new product.
Distributor problems can arise from almost anywhere. Don’t get caught off guard.
If you believe you have no other option but to sell your products through a dealer, distributor, or independent sales rep. Network, you can often improve sales.
You can do this by improving and intensifying the sales training and support you provide for your product to your distributors’ on-the-ground (or phone) sales reps.
This is accomplished by applying more time and effort to improving the distributor’s sales rep’s awareness of your product and its benefits and showing them the best ways to present and sell your product.
Marketing distribution is a major obstacle for startups.
You have to spend a substantial amount of time & money increasing traffic and sales. And marketing departments are usually the first to be cut.
As a result, it continues to be one of the most challenging problems you will face as an entrepreneur. Understanding your market is the best way to solve this problem.
Here are some steps to take to increase the awareness of your company’s product and create a sense of enthusiasm about your product in the minds of your distributor’s sales reps.
Distributor sales meetings for solving distributor problems
Most distributors offer numerous opportunities for marketing and sales managers at the companies they represent to present their products to their sales reps. This typically happens at annual sales meetings they hold during the year.
You should never pass up an opportunity to get in front of the distributor sales team at these meetings.
However, for some distributors, especially those in mature industries, we’ll try to limit contacts between their accounts (your company) with their sales reps. It’s because they are concerned that these presentations take selling time away from their reps.
It’s a common issue with anyone running a sales organization. You want them out selling.
This is not your problem. If you feel that the distributor’s sales reps need more and better sales training to boosts your product’s sales response, insist that your distributor make special arrangements to allow you to stage your presentation to the sales reps. And take that opportunity percent and reinforce your product story, features, and benefits.
If you are experiencing poor sales response in a startup, this may be your last opportunity to pull your product out of its slump.
At the presentation you make in the sales meeting, you want to highlight the following:
- Make your product’s benefits, advantages, and positioning crystal clear. Explain to the distributor’s reps the essential features and benefits that make your product different from and better than similar products in the same class. Use point-by-point comparisons of key product features to make these distinctions crystal clear, to position your product, very clearly against competitive products, in the mind of the sales representative.
- Go beyond your product sales pitch. Don’t stop at giving sales reps your product’s standard sales presentation. Equip them to handle what comes next from the prospect. This is a good spot to explain the customer journey and all the touchpoint content to move them through the sales cycle. Discuss common sales questions and objections that prospects have to your product. Thoroughly describe the best method for responding to each of these questions in the prospect’s most common objections.
- Tell the sales rep’s what your company is doing to help them move your product. Every distributor sales rep will push a product harder if they know that your company is helping to make their selling job easier. Detail the marketing efforts your company is making to promote the product. Digital advertising campaigns, direct mail programs, trade show appearances, and other demand-generating marketing campaigns to drive sales leads. Suppose your company cannot afford to spend money on a significant marketing effort. In that case, you can at least execute a trade PR media awareness project at a lower cost to get the word out on your product and mention this during your presentation.
- Help the sales rep. target their accounts. Let the sales reps know what types of customers would be the most likely to buy your product. For example, by their industry or location, by using other products sold by the distributor, or by their order volume. This gives the sales reps an immediate goal to push your product to a few most likely prospects to get some early sales momentum going for your product.
- Distributor sales reps respond well to greater attention involvement from the marketing staff in their product line companies. Your door is always open. Let the distributors reps know that you and your company’s management team are at their disposal to help them with any problem or issue with your company’s product. To prove it to them by being responsive to their request for assistance on day-to-day sales and administrative issues.
- Debrief the distributor sales reps. After the meeting, try to gather additional, informal prospect feedback on your product from the distributor sales reps on a one-on-one basis. You want to hear anything and everything the sales rep’s accounts say about your product: the good, the bad, and the ugly. Try to do this very discreetly so that other sales reps won’t overhear any negative information about your company’s product in the meeting.
What are the issues in your distribution channels from your market test? Or, if the product is already rolled out, you must identify insult problems within the channel.
It would help if you thought about a few things to roll out your product to distribution channels.
- Are the key benefits, features, company story, competitive analysis, objections, and FAQs ready for the distribution channel?
- Is all the marketing collateral available for the distribution channels sales reps?
- Do I understand my target market, the personas, and the relevant market size?
- Do I have all the sales training material I need to educate my distributor sales reps?
Setting up an effective distribution channel network & distributor problems
It’s not easy setting up an effective distribution channel network. As you’re working in a startup, you’re wearing many hats.
But it requires that you understand the steps to create an effective distribution channel network for your products and services.
Setting up a distribution channel can seem overwhelming and overworked at times, be sure to identify the steps and walk through them. If it seems like you’re getting nowhere, seek help from people that have done it before. And if you have any questions, you can always shoot us a message or give us a call.
Be sure to set goals and monitor activity and performance with sales metrics.
Distribution Problems for Startups: All You Need To Know About
The method of distribution selected from startup marketing programs may not generate sales at a low marketing cost.
Distribution problems in startups occur anytime, from product launch prep to LIVE launch to post-launch activity.
The startup’s management team must identify the distribution problem within the startup before they occur.
You can prepare and prepare, but at some point in time, you have to execute. And that’s typically when all the issues arise.
I’ve been working in the marketing industry for over 25 years now. And when I say you have to execute, I mean it. I see many self-proclaimed gurus, professional marketers, and freelancers say they can create a marketing ROI and know what they are doing?
Most of them are good at developing strategies, plans, and ideas, but everything falls apart when it comes time to execute. Don’t let that happen to you.
The Complete Startup Toolkit
Download the Startup’s Toolkit to help you learn the fundamentals of startups and accelerate your success.
Introduction to distribution problems in startups
A selection of a distribution channel or distribution channels for your startups can be an overwhelming task.
First, you have to find a distribution channel that will produce the most sales. Then you have to build a relationship with the channel members and convince them of your value to help them. It’s a two-way street.
This whole process can take more than five years for a complex industry to less than 5 minutes. It’s a simple formula that lowers the complexity of the decision process quicker the distribution channel can be set up.
This depends on the complexity of your industry, the buying decision, and the resources within the distribution channel to take on your products.
Uber started with $200,000 of seed money. In July of 2016, Morgan Stanley added another 1.15 billion dollars of debt financing.
Don’t scrimp on the product launches. But to your homework and test the market. And guess what? Morgan Stanley is leading its IPO.
Wrong distribution channels selected.
A market test for a startup, or a company launching a new product in the new market, sometimes reveals that the method of distribution selected for the company’s marketing program will not generate sales at a sufficiently low marketing cost.
There’s an old saying that my father used to tell me, “takes money to make money.” If you’re working in a startup, you know that it takes money the launch a product. That price tag could range from $50 to $500,000.
The price of launching a NEW product depends on many parameters—things like the competition, your product adaptability rate, the industry, and your market preparedness.
I’ve launched hundreds of products. As a product manager, there are many moving parts, and it’s critical to get it right. When I develop distribution channels, I wanted market access, quick distribution, and we didn’t have the resources to build a direct sales team quickly.
It is hard to predict everything that could potentially go wrong. Unless you are a fortune-teller, then call me. Or you can read “How to Recover From a Failed Product Launch for Startups.“
Some products can only be sold through a distribution channel.
Distribution problems show up quickly and market test. Suppose your company attempts to sell directly to end-users when it should be using distributors.
In that case, your prospects will often tell you that they only buy products such as yours exclusively from a certain distributor. “I don’t buy from Individual vendors.”
For the prospect, this is a choice that is easily justified. Many company purchasing departments prefer the advantage of having just one vendor to order from, and to pay, for certain types of products. Therefore they will only deal with a single, exclusive distributor.
Electronic components, food and grocery products, beverages, books, and retail software (is there any left?) are examples of product lines usually sold only through established industrial distributors.
The Ultimate Sales Funnel Calculator
Do you feel like you don’t have enough time? The sales funnel calculator will help you organize your business and get more leads.
Common distributor problems
Your organization may have identified a handful of distributors, dealers, or independent sales reps for your market test or a new product launch, and it experiences poor market response.
Often, the problem is the dealer, distributor, or sales rep firm. They simply are not devoting sufficient time and effort to promote your company’s product.
Here are some other major reasons for poor distributor performance.
Product depth for your distributors
Your distributor may carry thousands of products, many of which, unlike your company’s new product are proven, sellers. Distributors, dealers, and sales rep firms will usually spend the most time selling the easiest products to sell or have the biggest profit margin or sales commission.
Distribution issues in startups with distributors account size.
As a startup or new customer of the distributor, the distributor sees you as a small account relative to the other, and more well-established accounts generate most of their sales volume.
While professing an interest to work with your small company, distributors will often push the products of its larger, more influential suppliers.
Your distributor inertia & distributor problems
Your distribution problems in startups are often caused by the ebb and flow of your sales pipeline and closed sales. This is often the most difficult problem to address.
Even though the distributor’s reps express an interest in your product, it’s apparent that they’re not working hard enough to sell it. Your product becomes just another item number in the distributor’s catalog.
Sales reps at the distributor, especially for well-established distributors in mature industries, become glorified order takers for their accounts—your potential customers.
These kinds of distributors won’t push your product by themselves. It would help if you generated the demand on your own (through advertising and other marketing programs) to stimulate prospects at their accounts to buy from your distributor.
Wrap up for distributor problems in startups
So you join the startup, and you’re the vice president of marketing. Your first task is to set up a distribution channel to launch your new startup’s NEW product, drive web traffic, nurture leads, and get sales moving. So, where do you begin?
Setting up and solving distributor problems can sometimes feel like you’re overwhelmed. You should walk through the steps required to set up a distribution channel, identify the key players within the channels, engage with your prospect distributors, begin developing relationships, and see if your product is a fit.
Getting your startup out into your target markets is critical and digital marketing for startups is essential. Do this right, and your distribution problems in startups can be minimized.
The challenges are greater today than three years ago. Today, it costs more to bring a new product to the market. Product innovation is becoming more targeted while supply chain complexity is rising. So get a plan and do it!
General FAQ’s & & Distributor Problems
What is a startup turnaround?
A turnaround strategy is a revival mechanism that startups and businesses use to overcome industrial and business sickness. This strategy helps convert a company’s losses into profit.
What is a distribution strategy?
A distribution strategy is a strategy or a plan to make a product or a service available to the target customers through its supply chain. A company can decide whether it wants to serve the product and service through its channels or partner with other companies to use their distribution channels to do the same.
What is the distribution process for startups?
Distribution (or place) is one of the four elements of the marketing mix. Distribution (or place) is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for the consumer or business user who needs it. Distribution can be done directly by the producer or service provider or using indirect channels with distributors or intermediaries.
What is a startup turnaround?
A turnaround strategy is a revival mechanism that is used by startups and businesses to overcome the problem of industrial and business sickness. This strategy helps convert a company’s losses into profit.
What is a distribution strategy?
A distribution Strategy is a strategy or a plan to make a product or a service available to the target customers through its supply chain. A company can decide whether it wants to serve the product and service through its channels or partner with other companies to use their distribution channels to do the same.