Directorate of distance education

Relationship Issues in Channels
Since channel members must be convinced to handle a marketer’s 
product it makes sense to consider channel partner’s needs in the same 
way the marketer considers the final user’s needs. However, the needs of 
channel members are much different than those of the final customer. As 
we noted in the 
Delivery – Resellers want the product delivered on-time and in 
good condition in order to meet customer demand and avoid inventory 
out-of-stocks. 
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Profit Margin
– Resellers are in business to make money so a key 
factor in their decision to handle a product is how much money 
they will make on each product sold. They expect that the difference 
(i.e., margin) between their cost for acquiring the product from 
a supplier and the price they charge to sell the product to their 
customers will be sufficient to meet their profit objectives. 
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Other Incentives
– Besides profit margin, resellers may want other 
incentives to entice them especially if they are required to give extra 
effort selling the product. These incentives may be in the form of 
additional free products or even bonuses (e.g., bonus, free trips) for 
achieving sales goals. 
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Packaging
– Resellers want to handle products as easily as possible 
and want their suppliers to ship and sell products in packages that 
fit within their system. For example, products may need to be a 
certain size or design in order to fit on a store’s shelf, or the shipping 
package must fit within the reseller’s warehouse or receiving dock 
space. Also, many resellers are now requiring marketers to consider 
adding identification tags to products (e.g., RFID tags) to allow for 
easier inventory tracking when the product is received and also 
when it is sold. 

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Notes
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Training
– Some products require the reseller to have strong 
knowledge of the product including demonstrating the product to 
customers. Marketers must consider offering training to resellers 
to insure the reseller has the knowledge to present the product 
accurately. 
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