The name of the game is to ensure that the trade relations mix provides satisfaction to the dealer as well as the principal. The firm must offer a viable business proposition to the dealer. That is the baseline. It must also remember that dealers act more as a purchasing agent for the consumers than as a selling agent for the principal.
The firm must therefore encourage the dealers by supplying products/brands, which they would be happy to purchase on behalf of their customers.
Servicing and administering the dealers:
Dealers expect effective servicing from the firm. Prompt supply of the product is one part of effective servicing. Prompt supply of the product helps the dealers not only to achieve larger sales, but also faster turnover and lower cost on inventory carrying. Technical support is the other part. Technical support must be forthcoming promptly from the firm wherever necessary. In any bazaar, one can see several cases of retailers switching their loyalty from one company to another purely on the basis of their servicing standard.
Effective servicing, an example of Electrolux:
Electrolux is in the white goods business, and has scored an edge through effective servicing of dealers. They have picked up one crucial aspect in servicing replenishment of stocks and have scored high. They have enabled their dealers to achieve larger sales and simultaneously reduce their inventory. Now, they can draw their supplies from a ring of warehouses around the country and receive the stocks within 24 hours.
Electrolux has actually reached a point where its dealers need not carry any inventory at all; the company delivers the products directly to the consumer, once the dealer enters the order on his computer, which is connected to companyâ€™s stock points. Earlier, the dealers had to wait for two weeks or more; they had to carry heavy inventory, to avoid â€˜lost salesâ€™ due to â€˜stock outsâ€™.
Regular visits by field force:
Largely, the field sales force of the company / C&F agents provide dealer servicing. The dealers expect regular visits by the field sales force, so that seated in their shop they can have all their problems addressed. The dealers also expect to be kept updated on all vital matters relating to the business. This is possible only if the salesman visit the dealers regularly.