Most manufacturers call their distributors partners. Fewer treat them that way when it comes to information.
A distributor is not part of your company, and some things cannot be shared. The harder question is where that line sits, and whether it sits in the right place.
Why manufacturers hold back
The reasons are sound.
Brand IP and the product pipeline need protecting. A leak before launch can cost the first-mover advantage that R&D paid for.
Quality issues are usually kept in-house until the cause and the fix are understood.
Margin and cost data is commercially sensitive.
A distributor looks after its own interests first, and you cannot control how information is used once it leaves.
Your own staff can leak too, but their interests mostly run with yours. A distributor's often do not.
What a closed approach can cost
Closed is not the same as safe. Three things can go wrong.
A fault the distributor does not know about. Supply may stop at the factory while the distributor keeps shipping the affected batches to retailers and customers. Every week adds to the cost of putting it right and the damage to the brand. In some regions, the EU for example, distributors also have legal duties when a product is unsafe. They cannot act on what they have not been told. Take local advice on this.
Decisions made without context. A distributor who does not understand your constraints pushes for the wrong answers. Once they are told why, they can help find a better one.
Mistrust that runs both ways. Partners who are kept in the dark can hold back too, such as sales data they fear you might use to sell direct.
What sharing can do
Informed partners make better decisions for the brand. Being trusted also gives them the confidence to commit, knowing support will be there.
In one of our larger markets, a competitor was pushing hard on a key product. Our distributor wanted a strong response from us. They had not realised the competing product was not like for like, or the constraints we were working under.
They were a long-term partner, so we were open with them about both, and about what we were working on in response. The following year R&D delivered an exclusive version for that market, with the same functionality and performance at lower cost. Profitability improved for both of us, and the competitor stayed out.
The risks are real
A key person who has seen your numbers can move to a competitor.
Information can be used against you in a negotiation, or when your interests diverge.
Without clear terms and regular review, informal sharing drifts. What was shared once becomes expected.
Pricing carries legal risk of its own, particularly in Europe. Take competition-law advice before sharing anything on resale prices or margins.
More is not always better. Share what a partner needs to make a good decision, not everything you know.
Weighing it up
The answer sits in three places. These are how the agreement is written, how much the distributor depends on your brand, and what they have shown you over time. Sharing can grow as trust, performance and ethical practice are proven. The cost of a slow start is that newer distributors work with less than they could.
One way to frame it is four layers. First, what anyone can see. Second, what a partner needs in order to act. Third, what is shared in confidence. Fourth, what stays inside. Which items sit where, and when they move, depends on the partner.
Before you share anything, ask
Has this distributor proven itself over several years, not one good season?
How dependent are they on your brand, and how dependent are you on them?
How do they handle confidential information from their other suppliers?
Do they carry competing lines, and who sees what inside their business?
What do the terms say about confidentiality, and about what happens when staff leave or the agreement ends?
The answers differ for every business. Deciding what to share, with whom and when is the work I do with clients.
What transfers
The question is not partner or customer. It is how much each distributor has earned, and what the brand loses by withholding it from those who have.
Frequently asked questions
Are distributors partners or customers?
Both. They buy from you, but they also represent your brand. How you treat them should reflect the second role as well as the first.
Should a manufacturer share pricing information with a distributor?
Be careful. Resale pricing is tightly regulated, particularly in Europe. Take competition-law advice before discussing resale prices or margins.
What should a manufacturer tell a distributor?
Start with what the distributor needs to act well: market conditions, product constraints, quality issues and agreed plans. Extend further as trust is proven.
What should a manufacturer keep in-house?
Unreleased product plans and core intellectual property are the usual candidates. Quality issues are different. Distributors need to know early enough to stop supplying affected product.
How long before a new distributor can be trusted with more?
There is no fixed time. Look for performance, ethical conduct and commitment shown over time, and extend sharing in steps.
If you are weighing how far to trust a distributor, or how to structure what you share, get in touch.
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