Mutualism in Industrial Applications: The Manufacturer-Distributor Relationship

We’ve all heard the phrase, “I’ll scratch your back if you scratch mine.” Or maybe you are more familiar with the idiom, “One hand washes the other.” Both phrases describe a symbiotic relationship where one individual helps another to get something in return. Such a relationship can be obligate or facultative according to Study.com.  As the word infers, obligate symbiosis is a relationship where one species can’t live without another. Facultative symbiosis characterizes two species that choose to live together.

Mutualism —one form of a symbiotic relationship—is where both partners benefit. There are plenty of examples of mutualism in nature. Take the Egyptian plover and the crocodile. The crocodile lies in the Nile River with its mouth open. The long-beaked plover flies into the semiaquatic animal’s mouth and feeds on decaying meat in the crocodile’s teeth. Surprisingly the large reptile doesn’t eat the bird. The plover gets an easy meal while the crocodile gets its’ teeth cleaned.

When it comes to industrial applications, the manufacturer-distributor relationship could be considered a form of mutualism.  The direct sell model can be challenging depending on how complex the supply chain is. Most manufacturers opt to sell their products through distribution channels. Using a distributor that can sell a company’s products through its own network of locations and websites can eliminate logistics and marketing burdens. With the right distributor, it can be a sure fire method for guaranteeing a company’s products get to the right customer at the right time. The extensive network a distributor brings to the table means accessibility for the manufacturer.

In the machine tool industry a factory direct sales force shifted to independent representative agencies which have evolved to full time distributors. Today’s model for distributing factory goods and equipment first emerged in the U.S. in the 1970s.  Major equipment OEMs invested in developing full service sales and service outlets to improve customer response times. Some companies maintained exclusive territorial representatives but one equipment manufacturer set up multiple distributors armed with dictionary-size catalogues in the same geographic area. Today the “catalogue” has been replaced by OEM websites and exclusive territories abolished by the geography-neutral Internet.

So how do distributors remain relevant today? Value-added capabilities. These include:

• A professional, technical sales force
• A dynamic website that reaches and links a manufacturer with a population of prospects
• Investment in product demonstration capabilities
• Application support provided by technically trained, certified engineers
• Maintenance support provided by a technically trained, certified service engineer
• Training with skilled instructors that have field experience
• Regional parts inventory

Customer expectations have changed. Don’t miss our next blog to find out how we support change to help customers stay a step ahead.