How can you improve collaboration between intermediaries in distribution channels?

1 Align incentives and goals

One of the main sources of conflict between intermediaries is the misalignment of incentives and goals. For example, a wholesaler may want to maximize volume and inventory turnover, while a retailer may want to optimize margins and customer loyalty. To improve collaboration, you need to align the incentives and goals of each intermediary with the overall objectives of the channel. This can be done by establishing clear roles and responsibilities, setting common performance indicators, sharing rewards and risks, and providing feedback and recognition.

2 Share information and communication

Another key factor for collaboration is the sharing of information and communication. Information can include data on demand, inventory, pricing, quality, customer feedback, and market trends. Communication can involve formal and informal channels, such as meetings, reports, emails, phone calls, and social media. Sharing information and communication can help intermediaries coordinate their actions, reduce uncertainty, improve trust, and identify opportunities and problems. To share information and communication effectively, you need to use compatible systems and platforms, ensure data quality and security , and foster a culture of openness and transparency.

3 Build relationships and trust

A third element for collaboration is the building of relationships and trust. Relationships can be based on personal or professional ties, such as friendship, reputation, or contract. Trust can be derived from competence, integrity, benevolence, or predictability. Building relationships and trust can help intermediaries overcome barriers, resolve conflicts, and create value. To build relationships and trust, you need to invest time and resources, demonstrate commitment and reliability, show respect and empathy, and handle disputes and complaints fairly.

4 Adapt and innovate

A fourth aspect for collaboration is the ability to adapt and innovate. Adaptation refers to the adjustment of strategies, processes, or structures to cope with changes in the environment, such as customer preferences, competition, technology, or regulations. Innovation refers to the creation of new or improved products, services, or practices that enhance value, efficiency, or differentiation. Adapting and innovating can help intermediaries stay relevant, competitive, and profitable. To adapt and innovate, you need to monitor and anticipate trends, solicit and implement feedback, experiment and learn, and leverage resources and capabilities.

5 Collaborate strategically

A final tip for collaboration is to collaborate strategically. This means that you need to select the right partners, the right level, and the right scope of collaboration. Not all intermediaries are equally suitable or willing to collaborate. You need to evaluate their fit, performance, and potential based on your goals and criteria. Likewise, not all activities or functions require the same degree of collaboration. You need to determine the optimal level of integration, coordination, or cooperation based on your costs and benefits. Moreover, not all aspects or dimensions of collaboration are equally important or feasible. You need to prioritize the areas or issues that matter most and that can be realistically achieved.