Last updateThu, 29 Jul 2021 9pm

The Dynamics between Manufacturers and Distributors

The relationship between valve manufacturers and their sales channels is intriguing, dynamic and at times challenging. When managed appropriately, the relationship delivers a high level of end-user satisfaction, market share growth for the manufacturer and a healthy business outcome for both the manufacturer and its sales channel partner. Sales channels include a diverse number of business organizations, including distributors, representatives, agents, integrators, etc. This article deals with distributor organizations, as defined herein.

Is it Time to Toss Those Commissions?

It’s tough to pinpoint exactly what and when developments happened in the distribution industry prior to the internet, but based on conversations with past leaders, the commission model of selling started in the early 1960s. By the end of that decade, commission-based compensation models were the norm.

Relevance in a Digital Age

The distribution model of the past 50 years is changing rapidly thanks in part to the digital revolution. Joseph Nettemeyer, president and CEO of Valin Corporation, says that means distributors must find ways to add more value to solutions offered to customers. It also means they must become digital experts in communication and in the transfer of information.

Changes in EU Directives Affect Distributors—and Manufacturers

The European Union’s (EU) New Legislative Framework (NLF), which was set forth in 2008, has sharpened the focus on importer and distributor responsibilities as they relate to importing or placing CE-marked (European Conformity) products on the market. This focus is reflected in the recasting of several EU directives that affect the valve and equipment industries, including Pressure Equipment Directive (PED) 2014/068/EC and Equipment for Potentially Explosive Atmospheres (ATEX) Directive 2014/ 034/EC.

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