6 Tips for Managing Conflicts Between Distribution Channels

Relying solely on distributors to cover international markets—like most SMEs do—is both risky and limiting.

Your company and products need to be present across all main channels and touchpoints, both physical and digital, where end customers discover and purchase products.

In marketing terms, this means developing an omnichannel strategy.   ( ).

However, going omnichannel inevitably leads to channel conflicts.

These conflicts typically fall into three categories:

Vertical conflicts within the same channel—e.g., between your company and distributors when they don’t follow your pricing policy or disagree with a promotion. within the same channel—e.g., between your company and distributors when they don’t follow your pricing policy or disagree with a promotion.

Horizontal conflicts among members of the same channel—e.g., between distributors over territorial overlaps or pricing discrepancies.

Multichannel conflicts between different channels—e.g., online sales vs. distributors, or between distributors and OEMs, when products are sold to end users at varying prices.

A certain amount of channel conflict is healthy and even beneficial, but when it becomes harmful, you can’t ignore it—you need to manage or prevent it.

Here are some tips from my experience:

1. Don’t rely on chance or opportunistic decisions to develop your distributor network. Follow the structured steps I shared in previous newsletters (especially No. 7, where I explained the GrowTheNet© method).

2. Stay in constant contact with the market and your channels. Don’t just trust what you're told—verify everything as much as possible.

3. Define clear commercial policies with distributors, especially regarding pricing and territory assignments.

4. Don’t be overly rigid on minor issues—avoid intervening for trivial matters.

5. Act decisively in serious cases—e.g., if a distributor poaches a major client from another in their territory, or is found selling competing products.

6. Manage channel conflicts by clearly defining your online strategy from the start, and—where possible—allow distributors to manage both online and offline sales locally.

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