Channel Partnerships Streamline Distribution

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Formerly adversarial relationships between retailers and their suppliers are giving way to cooperative partnerships in which both try to improve merchandise and information flow in the distribution channel system. By cooperating, retailers and suppliers can speed up the replenishment of inventories, improve customer service, reduce the need for markdowns, and cut the cost of bringing goods to the customer. The authors outline the key features of channel partnerships and discuss the reasons for their rapid formation during the 1990s. They describe the changes needed in traditional merchandising and distribution systems to gain the benefits of a partnership and the requirements for a successful channel partnership.

Robert D. Buzzell is distinguished professor of marketing, School of Business Administration, George Mason University, and Sebastian S. Kresge Professor of Marketing, Emeritus, at the Harvard Business School. Gwen Ortmeyer is a visiting researcher at the Marketing Science Institute and associate professor of business administration, Fuqua School of Business, Duke University.

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