The Reseller Sales Model

Participating in a Manufacturer/Distribution/Reseller model can be one of the most challenging selling environments. The manufacturer wants exclusivity from their Resellers, but won’t extend exclusivity to the Resellers in return. Distributors break bulk and extend credit, offering little more in terms of value for their margin. And the Resellers, they carry multiple manufacturer lines and don’t fundamentally believe that one manufacturer has the solution to every problem. This tension creates for some interesting selling dynamics.

From the perspective of the OEM (original equipment manufacturer) who owns the R&D, manufacturing and distribution of the product, they view the Reseller’s motives and total sales engagement with skepticism. Somewhat analogous to the feelings experienced by the marathoners in the 1980 Boston Marathon where Rosie Ruiz crossed the finish line shrouded in suspicion. One minute she is with the runners, next minute she’s gone, fast forward to the finish line and she is raising her hands in victory as if she was there the whole time.

In a selling opportunity, Resellers who represent multiple Manufacturer lines are balancing their responsibility for objectivity to the client, while on the other side trying to balance their multiple partnerships and most recent commitments to any one Manufacturer. Because of the conflicted role the Reseller must play, they tend to wander in and out of the selling engagement with the OEM as they try to placate both parties.

To the client, they want to represent the best solution while defensively blocking any other competitors who may represent a similar or a different Manufacturer solution. The competitive threat creates a certain “hedge your bets” behavior that again from the OEM’s perspective looks like disengagement from the selling process. Each Reseller wants to win regardless of the solution, therefore potentially reducing their loyalty to anyone OEM.

To the OEM, it feels like they can never gain exclusive support from a Reseller throughout a sales cycle. To the Reseller, they have to represent the interests of the client and the OEM, while guarding against any flanking competition. For this reason, the Reseller/OEM selling relationship must be clear. Early, open, often and honest communication between both parties is a MUST.

Well defined rules of engagement for the selling motion, pre, progressive and post-sales must be clearly set forth. A Sales Engagement Matrix which outlines the key selling steps and interlock between OEM and Reseller must be in place. Dedicated Sales Liaisons must be employed between both OEM and Reseller for all of the elements of selling – Lead Generation, Collateral, Events, Pre-sales Technical Solution support, Solution Selling, Pricing and Sales Logistics. And lastly, a rationalization of Manufacturer solutions carried by a Reseller - think a 3 circle VEN diagram at the most, where there are competitive and collective solution benefits and technologies.