Misalignment is Bad for Business
The problems created by these diverging interests are compounded by the opaque nature of the brand-distributor model. There’s very little room for error and virtually no loyalty beyond the financial incentive a distributor has to move your product. To make matters worse for the emerging brand, if things don’t work out with early sales and a distributor drops you, you have very little information to figure out what went wrong. It just didn’t work. No sales data, no wholesale relationships and no consumer insight.
This critical misalignment creates serious consequences. Your goal is to maximize the growth and revenue of your brand. The distributor’s motivation is to maximize their overall growth and revenue across their entire portfolio of brands. If a more established brand sells better than your new brand or if another brand offers better commissions or has some other agreement with the distributor that you don’t know about, then it’s obvious who will lose out. Either you hold your breath and hope for the best or you spend time and money motivating the distributor with incentives or by taking on the inventory risk yourself.
For key markets, the distributor model has inherent flaws that restrict the control you have over the growth of your brand or, in the worst case, ruin your brand in that market
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