Behind the Week’s Headlines: Analyzing the new channel conflicts

And now that that’s taken care of let’s give Saddam a call and politely ask that he quit being such a bad actor and just give America a big ‘ole hug. In either case, it just ain’t gonna happen.

Channel conflict, channel overlap, you cutting his grass, me eating his lunch

– it’s as old as the first manufacturer/distributor relationship and it’s as much about human nature as it is about trying to do business in a competitive marketplace. And the market has always been competitive in any era of trade and commerce. It’s all relative.

We’ve been hearing some rumblings about value added resellers getting peeved at IBM and accusing Mother Corp. of pulling deals out from under VARs by dealing directly with what the VAR believes is his or her prospect or client.

The VAR would price, for instance, a NetFinity server at IBM’s suggested retail price. IBM would then contact the client and offer them the same product for half the price because what IBM is really after is not the sale of a server or two; it’s the more lucrative and long term service contract they want.

They get that service contract and then they are really getting cozy with that client and chances of that VAR having phone calls returned from that client are as good as getting a personal apology from Lou Gerstner.

And, perhaps some of the bright-eyed, bushy-tailed, but somewhat brain cell-deprived new sales hires at IBM Canada are unaware of the unwritten rules of the channel. They are brainwashed with direct selling and don’t even know they are sabotaging the VAR, who probably had a long-standing relationship with a previous representative at IBM.

So much of this whole system is based not on contracts or other written agreements but on relationships. People build trusted bonds, everything is on the up and up, I don’t tread on your territory and you don’t tread on mine. But then people change jobs, or they retire, or they get downsized and suddenly there’s somebody else on the scene from a different school, with a different approach to business, and the rules change.

And the biggest rule change of all has been the Internet and e-commerce. But take heart VARs. There’s one thing e-commerce just hasn’t learned to do all that well yet – physically deliver tangible goods. And for that reason many manufacturers will continue to rely on the channel, e-commerce or not.

So take a good look in the mirror, ask yourself if you’re playing by the rules, and if you know someone else isn’t, call them on it. In the end a scoundrel will be found out. In the meantime no one will ever fault you for doing your job to the best of your ability and to the highest possible standards.

And there’s a few other things e-commerce can’t do, like looking someone in the eye and executing a proper handshake, or take a client to lunch or a ballgame when the deal is closed.

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