MAKING A "DENT" in DISTRIBUTION
Reading the book, Distribution Channels by Julian Dent, even an experienced Channel Manager begins to systematize, integrate and mesh together their own pieces of personal experience for a better understanding of channel dynamics.
For a subject as important to many thousands of distributors and suppliers, little has been written down about the balancing act known as “distribution”.
One subtle key, in my own opinion, is that we refer to “channels” of distribution using “channel” in the sense of man-made flow...a channel versus a natural river or stream. On some subconscious level, we recognize that “channel” is something that we must create and not a natural occurrence in the environment. And a “channel” requires maintenance or time alone will erode the channel, closing it up and blocking access.
If a channel is man-made, then there are Builders and Master Builders. One Master Builder is Julian Dent. And in this case, when a Master Builder like Julian Dent, the Chairman of VIA International takes 30 years of his experience in building channels and, encouraged by colleagues, decides to write, “Distribution Channels-- Understanding and Managing Channels to Market,” it pays to read the book.
Julian's clients have included HP, IBM, Microsoft, Nokia, Orange, Philips, SGI, Xerox and other high tech companies. Working with the best helps, but Julian himself says, ”It was from clients and situations where things were going wrong that the strongest lessons could be drawn.”
Most vendors think only of ”selling” when they hear ”the word “channel.” Yet the brick and mortar that needs to go into building the channel is far more than throwing a sales person at a distributor. You can't sell channel unless you understand how channel thinks. And this book makes it clear how distributors should be running their businesses.
The mechanics of business is all about money and much of this book unravels the honest tension between vendors and distributors as each seeks to dominate the financial relationship.
Sometimes I found myself reading this book as a business version of a Dan Brown book wondering if it was The Butler (the channel) or the The Chauffeur (the vendors) who did it. Who would emerge as the real villain in the final chapter?
But this book is less of a "Thriller" and far more of a practical manual to engineering channel success: Distribution Channel spells out the financial motivation behind the relationships. And there are no villains if each side understands their financial and business roles as well as Julian Dent does.
The chapters I liked best deal with subjects like: Overtrading, Working Capital (Unlocking the Cash), The Measures That Matter, How to Sell to Retailers...
It's hard to imagine any hardware vendor that wouldn't benefit from reading this book-- no matter how many years, how many kilometers traveled while selling to EMEA channels...it's the organization of the information that helps you put it into perspective.
And this book should definitely be Required Reading for the upcoming Asian suppliers flooding CeBIT and IFA. We'd be doing a favor for them and all the distributors they hit on...maybe we should make reading this book a requirement to get a visa to attend any European trade show?
It's hard to know at times who benefits most from reading this book: the suppliers of the world or the distributors themselves. Many distributors run their home-grown business, stumbling into realizations and accumulating knowledge by experience (both good and bad experiences).
Personally I know a few distributors that would actually like to keep this book away from their suppliers: the less the vendor knows the more room you have to maneuver.
But I know far more distributors that would benefit from this book as a guide to what they should be doing...the real financial underpinnings of a distribution business...and for insight into how vendors regard the distributor/vendor relationship in financial and marketing terms.
This book, in the hands of a distributor who wanted to leapfrog the experience and truly understand what the distribution business is about, could improve business for far more than 50% of the EMEA distributors out there.
The Distribution Channel exhausts the subject of route-to-market via distributor and so the book ends like a train running out of track. That's probably just to remind us that distribution is always a vehicle and never the final destination.
Our recommendation for vendors and distributors: get the book, read the book, and then re-read it on a regular basis.
Go... Distribution Channels: Understanding and Managing Channels to Market
