As a starting point, companies should define an optimal mix of direct and wholesale accounts. The parameters should be first and foremost the cost-to-serve economics which determine optimal effectiveness in running one's own independent sales network versus alternative channels to market.
Markets can be divided into core and secondary by their level of importance to the company, location advantages and disadvantages and manageability. Generally, it is advisable to serve the core market with one's own sales force, while leaving secondary markets to agents and distributors.
To manage wholesalers properly, companies need to define their wholesaler selection criteria and performance measurement:
Selection criteria
Maturity
company size
age (history)
previous experience
technical capability (ability to lead technical personnel)
management competence
financial stability
Operating (serviced) area
Local operator ( servicing only one market)
Regional operator (servicing several neighbouring/ selected markets)
National operator (servicing all key markets countrywide)
Terms and conditions
payment terms
volume commitment
commitment to promotion and advertising
Other
transportation
feedback system
warehousing
after-sale service levels
required skills of salespeople
When managing agent/distributor relationships, it is suggested that companies link performance with incentives and provide regular, scheduled training to the selected wholesalers in order to achieve optimal effectiveness.