A successful distributor-principal relationship requires effort and time to build, and benefits both parties. We are fortunate that the principals that the Everlife Group represents have been our partners for many years and we have seen our relationships grow.
It is critical for a distributor to continually assess the status of their principal portfolio, and to find ways to grow it and to manage risk. To identify growth opportunities, we look at the “white spaces” that demonstrate promising growth potential. To expand into this space, we can work with an existing principal to expand the product range, or reach out to a new principal who specializes in that area.
Having strong relationships with our principals is important not only to grant them visibility on their business, but also gives a distributor insight into the principal’s future plans and strategy. It allows us to be sufficiently prepared if there are new products that might come through the pipeline, but also to ready ourselves if a principal plans for major strategic changes. For example, if a principal intends to go direct or make changes to a territory, sufficient time and notification allows us to make a plan to fill the sales gap. Time is also critical to manage and clear out existing inventory, collect outstanding payments and manage transitions to ensure minimum business impact.
Everlife’s subsidiary in Singapore, Chemoscience Pte Ltd, faced this situation with the loss of a major principal in 2016. Singapore is a highly concentrated market dominated by big players, and it was difficult to find another principal to replace this business. The team had to find other opportunities to fill this gap. Singapore had built up its reputation and capabilities as a regional hub for academic research, and we identified Life Sciences as a major opportunity where we were not present. The result of this was the acquisition of another local distributor, Bio-Rev Pte Ltd, a company that specialized in supplying research and academia in Singapore with products for the biological sciences. There were also significant overlaps in customers and products between Chemoscience and Bio-Rev, and the sales synergies helped accelerate the business. Strong performance and commitment has also allowed us to expand coverage to the Philippines for one of the major principals.
In conclusion, it is critical for distributors to be forward-looking and to actively manage their portfolios. It is also important to systematize principal management – Everlife companies hold frequent business reviews with major principals, but also regular internal reviews to assess the portfolio led by the Marketing and Business Development team.