05
Selling to distributors, from inside one
THE OTHER SIDE OF THE TABLE
27%+
CAGR · 4 years
3 of 4
Years above profit & ROI target
~$750m
Turnover · business run
The situation.
Before I worked for manufacturers, I ran distribution. National manager at an industrial MRO distributor in New Zealand, then general manager of sales and operations for a value-added industrial distribution and supply chain business turning over around AUD $750m, and before that the trade and commercial division of a large-format retailer with a field force of 130.
What that side of the table looks like.
A distributor carries hundreds of lines. Yours is one of them. Shelf space, working capital and sales attention are finite, and every supplier believes theirs deserves more of all three.
What actually decides how hard a distributor pushes a product isn’t the brand’s opinion of itself. It’s margin per unit of working capital tied up, how much support the line needs to sell, whether the sales team feels competent talking about it, and how the supplier behaves when something goes wrong. Manufacturers routinely misjudge every one of these, and then conclude the distributor lacks commitment.
What I did with it.
In industrial supply the whole argument turns on total cost of ownership rather than unit price, so I built cost-capture methods that quantified the value delivered to the end user — downtime avoided, inventory reduced, consumption managed. That gave the sales teams something to say that wasn’t about price, and it took price out of the middle of the procurement conversation. I secured national and international supply contracts on that basis with major mining, resources and manufacturing groups.
The outcome.
27%+ compound annual sales growth over four years, with profit and ROI targets exceeded in three of those four.
WHAT TRANSFERS
Most people advising manufacturers on distribution have only ever seen it from the manufacturer’s side. When I tell a client why their partner in Vietnam is behaving the way they are, it’s because I’ve been the one behaving that way, and I know what would have changed my mind.