ABSTRACT
A business partner might be a giant multinational company with three thousand sales reps on the payroll, or a housewife who's signed up to sell an asparagus steamer to her friends and neighbours. Partners come in many shapes and sizes, with labels such as manufacturer's agents, brokers, wholesalers, retailers, distributors, aggregators, resellers, value-added dealers and so on 1 . They are the intermediaries that sell, support, or sometimes even build a manufacturer's products for its customers, in return for a commission or other form of payment. A few examples, showing the diversity of this type of channel arrangement, include the following:
Snap-On Incorporated, the $1.7 billion manufacturer of power and hand tools 2 , uses an independent distributor model. The company's 4000+ distributors drive around in specially-equipped vans that have elaborate equipment displays as well as computer systems for running the mobile business. These ‘showrooms on wheels’ are driven right up to the doors of the customer base: professional technicians, automotive repair shops and industrial buyers.
Lotus Development Corporation has over 19,000 partners worldwide who develop applications, provide training, and do other types of computer consulting work to support its software products. In addition to providing marketing support to its partners, Lotus actively facilitates alliances between its partners so they can go to market in teams to win complex projects. In fact, fully twenty per cent of its partners’ revenues comes from deal making between the partners themselves 3 .
Avon takes the idea of a mass distribution channel to a higher level. This $4.8 billion manufacturer of cosmetics, fragrances, and toiletries has two million independent sales reps in 131 countries selling its wide range of products 4 .
Not every partner channel consists of thousands of distributors working at arm's length from the manufacturer. It can be just the opposite. Caterpillar, the $19 104billion manufacturer of engines, agricultural equipment and other machines, relies on a network of just 197 dealers. These are big players – their average revenue exceeds $100 million – and their relationship with Caterpillar gives substance to the abused word ‘partner.’ The average dealer has been on board with Caterpillar for over fifty years 5 .
