CHALLENGES OF DUAL DISTRIBUTION AND HOW TO OVERCOME THEM: INFLUENCE OF THE INCUMBENT DISTRIBUTOR

A more subtle challenge can be the pushback from your existing exclusive distributor when you introduce a second partner. If one distributor has enjoyed exclusivity, they may perceive the move to dual distribution as a threat to their business and react negatively – anything from demanding assurances, to lowering their sales efforts, or even trying to dissuade the vendor from proceeding. This is a real concern because a hostile incumbent could attempt to sabotage the transition (for instance, by telling mutual partners that the second distributor isn’t as good, or by withholding cooperation).

Mitigation: Managing this requires careful stakeholder handling and change management. First, get executive-level buy-in within your company that dual distribution is the right strategy (based on the benefits we outlined). Once the decision is firm, engage your incumbent distributor’s leadership in a candid discussion. Emphasize that this move is “to drive growth and resilience for all parties” – not to cut them out, but to expand the market so everyone can win more business. Provide data if possible: for example, show that certain market segments are underpenetrated and a second distributor will help develop those, which ultimately increases total sales (of which the incumbent will still get a large share). It’s important to dispel the fear that their pie is simply being split. You might negotiate revised targets or incentives for the incumbent to reassure them they won’t lose volume – perhaps even linking a portion of their rebates to overall vendor growth, encouraging them to collaborate. Also, maintain a level playing field: avoid giving the new distributor any unfair advantage (like much better pricing) that would alienate the incumbent. If the incumbent distributor is integral to your business, you could start the dual model gradually – for example, bring the second distributor on for a specific product line or a particular set of government accounts, so as not to disrupt existing business managed by the incumbent. Demonstrating early wins in “white space” areas will show your original partner that the strategy truly creates net-new revenue. Internally, make sure your sales teams understand the rationale and are not biased by any complaints from the incumbent. Clear top-down communication that “this is a growth strategy, and with the right second distributor we will all benefit” is key. By handling the incumbent’s concerns with transparency, fairness, and proof of concept, you can often gain their begrudging acceptance – and they too might step up their game when they see the competition in action.

In summary, the challenges of dual distribution – complexity, costs, conflict, and change management – are very real, but they can be overcome with thoughtful planning and strong channel governance. Many leading companies have successfully navigated these issues by employing the tactics above. Next, we’ll delve into concrete best practices to implement a dual distribution model effectively.