Do Manufacturers Care If Their Resellers Are Double Dealing With The Competition?

Will/can they drop you for becoming a partner with the competition?

After considering Dwayne's Axis - Hikvision dilemma of "Should I Pay or Should I go Now?", I was wondering if a top-tier company like Axis or Avigilon ever indicates displeasure when a partner starts to migrate to a lower cost competitor?

Or even will end the relationship so as to make the line more exclusive.

Some care. Usually it's discussed up front what other lines you're carrying. Across the board you'll pretty much get "Oh but why carry them anymore when you can sell us?" from reps.

I have never heard of someone being dropped simply for selling something else. I have heard of people being dropped for sales of product A dipping too low due to them selling product B.

So there are no partner perks for being exclusive? You would think there is some benefit to having less dealers of your competition.

Like if Avigilon noticed a trend where their dealers are starting to quote Hik a lot, they might start a "Nothing but Avigilon" class to reward those who don't.

Maybe it would be considered an anti-trust practice.

Like if Avigilon noticed a trend where their dealers are starting to quote Hik a lot, they might start a "Nothing but Avigilon" class to reward those who don't.

It's just really not practical to do that. What about products Avigilon (in this case) doesn't offer, like thermal cameras or a PTZ with integrated IR? If dealers are quoting competitors a lot, it's really more of a job for product management to look at why they are losing those deals and determine if it's worthwhile to create a competitive product, reduce price, etc.

There is not true "single source" manufacturer out there. Dealers need to carry multiple products, for price competitiveness or for form-factor options or for VMS compatibility reasons (among other things).

For stuff available through general distribution, like Axis, there isn't a whole lot the manufacturer can do. For other products that are selective availability, like Avigilon, the territory manager can choose to revoke reseller status. However, it takes more effort to get a new partner productive than to support an established one. Most territory managers know this and aren't going to dump a partner just for offering multiple lines.

Ultimately, no manufacturer is going to turn away a productive partner. If you're selling enough, then the relationship is good. If you're not selling enough then you might lose the line (as Ethan also said).

I think on the access control side, it's much more of a concern all the way around.

For example, you won't find many (any?) integrators selling both Lenel AND Software House.

It's even more vicious on the door hardware side. You might be either a contract hardware dealer for Assa OR Allegion, but rarely both at once.

I'm nowhere near as familiar with the access control side as you are, but my impression has always been there is a lot less feature differentiation among the products there. EG: you would have little need to carry Lenel *AND* SH, as they are more or less equivalent. You might offer Lenel and Brivo, to target two different kinds of markets/customers.

Same thing with the hardware, it's not really a "sexy" product, you find one that works for you at a good price and there is little incentive to deal with multiple lines/vendors.

Kind of like wire/cable, patch-panels and terminations, consoles/furntiure, etc. You pick a line and for the most part it's applicable for any job. In odd cases there might be a need for something else (like to match an existing install for a customer you're taking over), but you don't really add those products to your daily offerings.

"there is little incentive to deal with multiple lines/vendors."

I agree about product equivalency, but the business of dealer/partner relationships is very political.

For example, in door hardware, hard specs for one particular line are common (albiet to a lesser degree with access control).

If I'm an aggressive integrator with loads of install/design/service talent, I want to stick my fingers in as many projects as possible and provide bids until my estimators give out. If I can only bid a portion of the available projects because those 'other guys' have locked me out from being a dealer, there is very little I can do about it.

Same with service. A takeover prospect may love me, my service, and my rates, but if I cannot support the system he bought through the "other guy's" dealers then there is no chance he will move to me.

The only way I could see a SH dealer selling or supporting Lenel is if said SH dealer has several large Picture Perfect systems that will be migrated to Lenel.

I think there are differences between "Authorized Distributors" and other "normal" Re-sellers (which are of course an integral part of the channel up 'til the product reaches the end- user).

If there's a Certificate of Authorization issued by the manufacturer to his direct distributor, I guess said manufacturer must have to "care" at least, if not "honor and respect" their oficially issued letters. By "caring" I mean: i.e. giving discount prices that can assure his dealer "X" amount of margin even if the price is lower online at Amazon, partnering with them for roadshow events, helping with marketing funds, train/incentivize the distributor's sale staff, etc. etc...

If the manufacturer really honors in practice the EXCLUSIVE right for sole distribution (which is not the same as mere "Authorization for Distribution") in a region or not (or else finds a parallel partner in the same geographical area to make them compete with one another) well that's another topic. In the case of "Re-sellers" there are NO letters issued to them as far a I know. I've never seen cases where distributors holding a manufacturer letter re-issue letters down the channel.

That said, I've seen some letters with expiration dates, others without. Undoubtedly, putting a date may be the fairest, just and objective way thing to end things for both, I guess.

If the "manufacturer-dealer marriage", so to say, goes well the letter gets re-newed without a problem, if not; well the letter says clearly we shall end this on "X" date.

AXIS's letter: "Authorized Partner" in the Axis Channel Partner Program with issued date but no expiration.

PELCO's: Confirm AND Certify "X" company as an authorized dealer, valid until "X" date.

DAHUA: Authorization valid until "X" date.

HIKVISION: Valid through "X" date.

Not for IP cameras, but funny that CANON seems to have an "Empowered Partner" Certificate (whatever that means) certifying their partner to stock & sell their products ...

Can anyone predict the short-term effect if Avigilon/Axis were to offer a couple more points to those who would promise to not pitch competitors products (at least when there are suitable products available)?

Verification would have to be honor system. But word gets around, right?

Otherwise how do you stop your dealers slide down the slippery slope?

Short of dropping dealers, there are 2 meaningful levers that manufacturers have:

  • Discount levels - You sell more of a rival brand and not enough of theirs, you can get demoted to a lower dealer discount level.
  • Leads - The manufacturer believes you are favoring one of their rivals so s/he directs lead to your competitor rather than you.

The manufacturer believes you are favoring one of their rival so s/he directs lead to your competitor rather than you.

If you favor our competition, we'll favor yours!

John nailed it as well Ethan. If your volume doesn't grow and they see you are using a competitor the number goes up and leads go down.

I do know companies with both Software House and Lenel. They advertise one and sell both as required. It's highly unusual but it happens for a variety of reasons, mostly end user driven.