This is undoubtedly one of the main concerns for brands and manufacturers. Building a distribution channel is a really hard task, first you have to make a selection of distributors, and then agree on a sales strategy; Discounts, recommended prices, launches, graphic materials, etcetera.
After this arduous work, it is frustrating to discover the existence of unauthorized distributors in the network, that is to say, companies which the brand does not have record of, and in some cases they can even exceed in number to the authorized ones.
At first thought the more companies that sell the products of a brand the more positive it would be for it because its distribution channel will be greater and therefore also its sales. The reality is quite different, as the sales volume of these other distributors is not be really significant in comparison with the distribution channel created by the manufacturer, but nevertheless the damage they can cause is noticeable.
As far as price is concerned, in the absence of an agreement between companies and brand, the pricing policy will differ from that followed by the rest of the distribution channel, and often with prices lower than those recommended, which will cause discomfort in Dealers and predictably a price war as for trying to avoid a loss of competitiveness.
What tools do brands have to anticipate this problem? Manually discovering which sellers sell a certain brand on the Internet can become impossible, for this the manufacturers have channel monitoring tools that, thanks to their daily tracking, will detect those companies that market their products.
Thanks to this data collection the brands will be able to know who sells their products and analyse whether it is an authorized seller or not. Undoubtedly this work will strengthen the channel of sale of the brand and its authorized distributors will feel protected from external aggressions.