Dealers or direct for machines: who should sell, and who should service

A dealer in a region you cannot cover wants your machines. The dealer will sell them, install them and look after them, and the buyer will call the dealer, not you. Whether that is a good trade depends on two questions, and they should be decided separately. Who should sell the machine? Give that to whoever the buyer trusts with the specification. Who should service it? Give that to whoever can reach a stopped machine soonest. Then put in writing who keeps the buyer's record, so the relationship stays with you whoever does the work.

Selling and servicing are two jobs

Selling a machine is a few conversations about a specification, a price and a delivery date. Servicing it is ten years of breakdowns, spares and visits. The skills differ, and so does the geography. Your sales head can win a mill in a distant district from Ahmedabad by phone, a visit and a reference plant. Nobody in that role can reach the mill's compressor at night.

Many makers of industrial machinery and equipment treat the dealer question as all or nothing: either the dealer sells and services everything in the area, or the dealer is cut out. The better answer is often a split, chosen by machine type and by region.

Four ways to split the work

A rule for choosing

Start with service, because it is harder to fix later. Ask how long the buyer's line can stand idle before the buyer loses real output, and who can reach the plant inside that time with the right part. If only a dealer can, the dealer services, whoever sells.

Then decide selling by the size of the decision. A machine bought on a specification sheet and a plant visit, with an owner who wants to meet the maker, is sold by you. A standard machine that a small unit buys from whoever is nearest and stocks it is sold by the dealer.

Do not give a dealer the service when the machine needs commissioning skill or software the dealer cannot be trained on. The same holds when your installed base in the area is too small to keep a trained technician busy. Nobody invests in a skill used twice a year. The buyer finds out at the first breakdown. In that region, service it yourself or do not sell there yet.

Who owns the buyer?

You do, in every split, if you collect one thing: the record of each installed machine. That means the plant, the serial number, the commissioning date and the people who run it. A dealer can hold the day-to-day relationship. You hold the list. Our note on building your own customer list when the dealer holds the relationship covers how to collect it without souring the dealer.

Agree these lines in writing before the first machine goes into the dealer's area:

1. Territory, by district, and the named accounts you will sell to directly.
2. Direct orders in the dealer's territory: what the dealer earns on each.
3. Installation and commissioning: who does it, and the fee when the dealer does it on your sale.
4. Service on machines you sold: response, AMC rights and the spares margin.
5. Training: what a technician must clear before being given a model.
6. Shared records: every installed-machine entry, the dealer's sales and yours, kept by you.
7. The exit: who takes over the machine list, open AMCs and warranty work if the dealer leaves.

For example: compressors from Odhav in southern Tamil Nadu

Imagine a maker of screw air compressors in Odhav, Ahmedabad, with a dealer in Madurai who sells and services across the southern districts.

At a textile machinery exhibition, the maker's sales head met the owner of a spinning mill near Rajapalayam and sold the owner two compressors direct. Nobody told the Madurai dealer. When one compressor tripped in the middle of a night shift, the mill's maintenance man rang the number on the sticker of an older compressor, the dealer's. The dealer said it was not the dealer's machine. The maker's engineer arrived from Ahmedabad two days later. The mill owner was angry, and the dealer, feeling cut out, began quoting a rival brand to two other mills.

The owner went to Madurai and agreed a written split. A short list of large mills became house accounts, sold by the maker, with the dealer copied on every quotation in the dealer's districts. The dealer would install and commission every machine there, including direct sales, for a fee, and would hold the AMC and supply spares at an agreed margin. Each installed-machine entry would be shared both ways. The Rajapalayam mill signed an AMC with the dealer, and the quotes for the rival brand stopped.

When not to appoint a dealer at all

Skip the dealer where you have fewer than a handful of machines running and no service engineer within a day's reach. The dealer would be learning your machine on the buyer's breakdown. Skip the dealer too when the machine is built to each customer's process, because no dealer can carry that specification between the plant and your drawing office. In those districts, sell direct, accept a slower start, and add a dealer once there are enough machines to keep a technician busy.

Where to begin with your own dealers

List the regions where you have machines running and no one within reach. For each, note who sells, who services and who holds the machine list today. Where the last answer is "nobody", start there. If you want help setting up the split and the terms behind it, as a dealer and distributor programme, tell us what you need.