If you are an industrial manufacturer, you might think the ideal distribution arrangement would be to sell through a large network of dealers, giving them exclusive rights to sell your product within a defined territory.
In exchange, you offer a competitive price, fast delivery and high quality. After all, its not practical to set up your own sales organization in every market where you might want to sell your product.
But, as so often happens in the fast-changing economy of the late 20th century, the paradigm is shifting away from conventional wisdom. Thats the thinking at Export-based Versa-Matic Pump.
Says Bill Versaw, president and founder of Versa-Matic, on depending solely on distributors: That may not be the best way to do business.
Versa-Matic has taken a hard look at its business of selling pumps to industrial users and concluded that, when it comes to distributors, less is more. The company now has about 200 distributors worldwide, but in recent years, has trimmed that network of resellers by about 10 percent and ended exclusive distribution agreements with some.
The companys actions are keeping distributors on their toes, says Versaw, by putting them on notice that the manufacturer wont let distributors dictate how business will be conducted.
Some distributors were missing customers in their territories, cutting back on inventory because of cash woes or not requiring their sales people to carry Versa-Matics sales kit or attend its sales training to learn about the product. Now, says Versaw, in some situations, more than one distributor sells in an area.
And Versa-Matic wont hesitate to sell directly to customers who inquire about their pumps, even if they have a distributor covering their area.
As a company, you need to take whatever order you can get, says Versaw.
Seeing opportunities for global distribution of a line of OEM replacement parts for commercial pumps made by some of its competitors, Versa-Matic has launched Pumper Parts LLC, and sells by phone, fax or online. Versaw claims its causing a stir in the industry. Its turning some heads, says Versaw.