Q: How does one stay non-threatening when you sell a distributor who sells customer A. Customer A grows and starts to buy directly from competitors (one step vs. two step). How does one start selling directly to Customer A without threatening the distributor?
A. This is one with which I can really empathize, having been on both sides of this issue (distributor and manufacturer) on several occasions. From my experience, the best results come from clear, above-the-board discussions with the distributor. A frank conversation that addresses the issue: "This customer is not going to buy from you. In order to save the business, we're going to approach them directly.
We're doing you the courtesy of letting you know our plans. That's life."
In order to make that more palatable, think about providing the distributor a small short-term commission, even though he isn't selling the business. He did identify and convert the customer. A small commission for six months or so will show your intentions are in the right place. Another possibility is to identify a couple of prospects where you can work closely with the distributor (maybe special pricing or
service) to help him get some accounts to replace Customer A.
Either or both of these will go a long way to keeping the relationship in place with the distributor while adjusting to the ever-changing customer situation.
