Understanding The Manufacturer/Retailer Relationship

products at retailer

When it comes to achieving business goals, a positive manufacturer/retailer relationship is crucial. Manufacturers and retailers must work together in order to facilitate success in both areas. In the past, manufacturers and retailers didn’t work as closely together as they do today; each focused on their own agendas without much thought to the other. Today, however, things are much different, thanks in part to our globally connected, high-tech society.

Profitable Partnerships

When manufacturers and retailers collaborate, great things can happen. A good example of this is the Kimberly-Clark and CVS partnership. Kimberly-Clark worked closely with a third company, Red Dot Solutions, to develop virtual reality store environments to better deliver positive shopping experiences for customers at CVS.

Another example is that of Campbell’s Soup and Kroger. With the grocery store’s endcap advertising strategy in mind, Campbell’s devised their “Simple Meals” concept to provide shoppers with healthy, easy meal ideas using both Campbell’s and Kroger products.

Conflicts in the Manufacturer/Retailer Relationship

Things aren’t always smooth sailing in regards to relationships between manufacturers and retailers. For example, there was a time when Proctor & Gamble could limit the merchandise they allowed retailers to shelve in their stores. Today, retailers are in control of their in-stock situations. Thanks to mega-store clout and consistent customer demand, manufacturers like Proctor & Gamble are now fighting for shelf space at these stores. The backlash of conflicts like these often compels manufacturers to devise new options, such as skipping retailers entirely and allowing customers to buy from them directly.

Moving from Control to Support

Many believe that the key to facilitating better relationships between manufacturers and retailers lies within the manufacturing end of things. One way companies can do this, is by working with online retailers to get their products for sale online.

Online Shopping

In addition, monitoring of the brand’s products and sales is imperative when it comes to creating winning sales strategies on both sides. Manufacturers can not only encourage their own success but the success of retail outlets they’re working with by maximizing brand exposure. Retail promotions done with manufacturer support is one way to encourage sales and exposure, regardless of the type of product or store in which it’s sold.

Why Trust is Important

It is imperative for retailers and manufacturers to promote an environment of trust. Retailers need to know manufacturers are dependable, and manufacturers need to know retailers are promoting their products in the most effective manner possible. When advertising and marketing is the best it can be, both the manufacturer and the retailer win. The name of the game is sales, a metric that can be increased by joint efforts from both sides.

How to Increase Manufacturer/Retailer Trust

Retailers and manufacturers can build trust in one another by sharing information and strategies with the other party. Of course, this is easiest when relationships are exclusive and retailers don’t carry competing brands. Even so, it is always possible for companies to communicate more effectively. Through clear communication, retailers and manufacturers can not only share information, but collaborate strategically to increase brand exposure and sales — which benefits both sides.

By better understanding the relationship between manufacturers and retailers, steps can be made to improve and strengthen these partnerships. This knowledge of how these partnerships work and how to build added trust are applicable to most manufacturer/retailer relationships.

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