MH: Most suppliers find the lack of control they have over their sell-through channels extremely frustrating.  Are there legal things that suppliers can do but aren't doing?

CP: I am glad you said legal!  The first thing that suppliers have to accept is that there is a natural tension in any supplier-reseller relationship.  The supplier wants ownership of the brand and of the experience that the end-user enjoys.  The reseller feels he has had paid for it and that the product is now his.  But, yes, I think there are many things that suppliers can do and aren't doing to exert more control.

MH: Such as what?

CP: Firstly, most suppliers never define precisely what sort of experience their different types of customers actually want to have. If you do this, you can select the right channels for each type of customer.  You can then set the exact requirements for partners, so that when they sell your product it meets the desired customer experience.

MH:  All well and good, but how do you ensure that your partners deliver the experience?

CP: At one level, you can write it into the contract. You can stipulate how many trained technicians each partner must have.  Workstation vendor SGI goes even further, effectively forbidding partners to make a sale without adding services in some form or other.

"You want to develop a reputation as an enforcer."

MH: Well, most companies have contracts, don't they?

CP: Often they do.  But very few suppliers enforce such contracts systematically. In practice, when partner A loses two of his three technicians, they don't stop him reselling the product. And, of course, partner A now has a lower cost base to compete with those who still meet the standard.

MH: So you have to be tough?

CP: Yes. You want to develop a reputation as an enforcer.  This is something that a few companies in every industry have, and it pays dividends - look at Sony, Swatch or Levi. You also need to accept that enforcement costs money and, in the short-term, may even lose sales.

MH: But how do you stop four or five intermediaries throwing their resources into competing on price for a few large contracts?

CP:  Firstly, you can paint your roadmap for the partners. You can show them the markets you want them to go after and you can encourage them to do so with good account management and the judicious use of marketing development funds. But, frankly, there is not a lot you can do if people want to commit commercial suicide.