|Insight on channel management|
from IACCM's Tim Cummins
Agents, distributors, remarketers, sales representatives, consultants -- the array of third-party relationships is extensive and has provided reach and range, local market or industry intelligence, and reduced cost and risk for centuries. Today’s global markets have driven a steady increase in the volume of these interconnections, with many companies engaging in a variety of channel relationships. Yet for all the benefits, there are some very real drawbacks -- and these appear to be increasing.
First, channel conflict can be very hard to manage, and businesses run the risk of losing loyalty and creating price wars that commoditize their products. Yet attempts to control prices may lead to problems with increasingly vigilant competition authorities. Another challenge is that regulators also monitor many of these intermediary relationships for potential bribery or corruption. There are many instances where an agent, consultant, or representative is either a front for bribery or used to disguise corrupt actions. Finally, there are frequent instances where third-party representatives take legal action against their principal for various forms of damages or compensation -- and in many jurisdictions, the law is weighted in favor of the channel partner.