Customers have been able to reduce the total cost of doing business with their suppliers by as much as 7% of their revenues according to recent research. But what happens when they cannot reduce costs further with their distributors? Often they try to go around the distributor and work directly with the manufacturer. Unless distributors and their manufacturing suppliers determine how to make the channel more efficient, customers will do it for them. And in a way they may not like, such as going direct, reverse auctions, e-commerce, and overseas sourcing to name a few.
 
We help distributors and manufacturers work together to achieve significant cost reductions and to create a competitive advantage through the distribution channel. Our support is based on the results from a landmark research study we conducted for NAW-DREF on how to make the channel more cost effective and valuable to all channel partners, by working with companies to:

As customers continue to focus on cost reductions, distributors cannot constantly go back to their manufacturers asking for price reductions. Eventually the “well will go dry”. Today, with an estimated 25% of the costs in the channel redundant, it is not surprising that many customers are already looking for alternative channels to cut costs. And and that trend is likely to continue. If the distribution channel is to remain the channel of choice, distributors and manufacturers have to make it the most cost effective means for customer to procure supplies. There are tremendous opportunities to reduce channel costs and the ones that make it happen can enjoy a truly competitive advantage.