Industrial Channel Partners: Whom to Embrace, Who Should Depart?

As manufacturing companies in technology, building materials and other industries expand to new countries or customer segments, they typically use distributors and other channel partners to reach their customers, and rarely drop underperforming partners. Over time, individual partners may slip in performance or simply not fit the manufacturer’s evolving goals, yet the group can get so large that it needs a thorough reassessment. Regularly evaluating partnerships in terms of revenue, local market share, financial strength and service capabilities helps manufacturers wring the most benefits from their partners. One industrial equipment company moved subscale markets to an easy-to-implement importer model, in order have more flexible costs. It invested in joint sales activities with hungry independent dealers in core markets, and revised partner incentives to spur growth. The company was able to outgrow competitors and smooth profitability from year to year.