Directorate of distance education

Evaluating Channel Member Performance 
1. Degree of manufacturer control
2. Relative importance of channel member
3. Nature of the product
4. Number of channel members involved
Criteria for Evaluation
➢ Sales performance
➢ Inventory maintenance
➢ Selling capabilities
➢ How competitive product lines and competitors are handled
➢ Attitudes
➢ General growth prospects
➢ Other
Channel Arrangements
The distribution channel consists of many parties each seeking 
to meet their own business objectives. Clearly for the channel to work 

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Notes
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well, relationships between channel members must be strong with each 
member understanding and trusting others on whom they depend for 
product distribution to flow smoothly. 
For instance, a small sporting goods retailer that purchases 
products from a wholesaler trusts the wholesaler to deliver required items 
on-time in order to meet customer demand, while the wholesaler counts 
on the retailer to place regular orders and to make on-time payments. 
Relationships in a channel are in large part a function of the 
arrangement that occurs between the members. These arrangements can 
be divided in two main categories:
1. Independent Channel Arrangements
2. Dependent Channel Arrangement
Channel Arrangements: Independent
Under this arrangement a channel member negotiates deals with 
others that do not result in binding relationships. In other words, a channel 
member is free to make whatever arrangements they feel is in their best 
interest. This so-called “conventional” distribution arrangement often 
leads to significant conflict as individual members decide what is best for 
them and not necessarily for the entire channel. 
On the other hand, an independent channel arrangement is less 
restrictive than dependent arrangements and makes it easier for a channel 
members to move away from relationships they feel are not working to 
their benefit.