Friday 15 Podcast

Is Channel Conflict a Reason Not to Sell Direct in B2B?

Brian Beck and Andy Hoar examine whether channel conflict concerns should prevent B2B manufacturers from selling directly online, finding that 100% of LinkedIn poll respondents said conflict should not prevent direct selling.

Friday 15 Podcast

Key takeaways

  • A Master B2B LinkedIn poll found 100% of respondents said channel conflict concerns should not prevent B2B companies from selling directly to end buyers via ecommerce.
  • An Incisiv survey found 34% of manufacturers not selling on Amazon cited fear of conflict with other sales channels as their primary reason.
  • Logic.info research found nearly 80% of B2B websites surveyed did not enable buyers to complete transactions online, with conflict concerns as a contributing factor.
  • Forrester research indicates the top reasons customers shift to buying online are convenience and speed, not price, undermining the fear that direct selling means competing on price alone.
  • 75% of B2B buyers are now Millennials or Gen Z, who expect to interact directly with brands through digital channels regardless of traditional distribution structures.

Voice commerce is growing with Gen Z

eMarketer reported that voice shopping is not yet a major commerce channel, but Gen AI and Gen Z could change that. Studies show that voice assistance usage is growing at about three times the rate among Gen Z compared to other cohorts. Brian noted that one of the best use cases in B2B is a field worker like an installer who does not have access to a screen and needs to order a part. Voice recognition has become good enough to make this a viable option.

Channel conflict defined

Wikipedia defines channel conflict as occurring when manufacturers or brands disintermediate their channel partners by selling products directly to buyers through general marketing methods or over the internet. Brian noted this is a classic challenge that has caused consternation because ecommerce provides a dramatic opportunity for many companies. Incisiv research found that 34% of manufacturers not selling on Amazon cited fear of conflict with other sales channels as their primary reason.

The channel is already disrupted

Andy argued that the trap is extrapolating from the present to the future instead of thinking from the future back to the present. Customers want to buy direct from brand manufacturers, period. Some will pay a premium for the privilege. Meanwhile, distributors sell private label products that compete with their suppliers. The notion that the channel is pristine and undisrupted is an illusion.

All of your distributors are doing private label, so they are selling their own version of what you’re doing. How is that not disrupting the channel?

Andy Hoar, Master B2B

It is not primarily about price

Forrester research found the top two reasons customers shift to buying online are convenience and speed, both exceeding 50% in surveys. Price was less important. Brian noted that manufacturers get caught up on the price competition concern. In B2B, buyers spend company money, not their own, and getting products quickly to complete projects often matters more than saving a few cents. A dollar today is worth more than a dollar tomorrow when you have revenue-generating work to complete.

How to sell direct and manage conflict

The hosts and community members outlined several strategies. Implement and enforce minimum advertised price policies across all channels, including the brand itself. Use sales channel agreements with legal teeth rather than unenforceable policies. Vary assortment by channel to complement rather than duplicate distributor inventory. Take control of marketplace channels to prevent unauthorized sellers from undermining pricing. Be mindful of B2B pricing behind logins where customer-specific pricing applies.

Terms and conditions usually have more teeth than MAP because it’s a contract.

Ryan Weller, Adidas

Distributors have advantages too

Rick Wingender from Mueller Sports Medicine noted that reducing contact points for customers is a losing strategy. Sometimes the distributor or dealer is a better contact than the manufacturer. Distributors can offer multiple products, local services, and deep domain expertise. These are the value-added services they should emphasize rather than competing on price alone. Brian agreed that this levels the playing field in a way that empowers distributors with clear differentiation.

Poll shows unanimous support for direct selling

A Master B2B LinkedIn poll asked whether concerns with channel conflict should prevent B2B companies from selling directly to end buyers via ecommerce. The result was 100% said no, it should never prevent direct selling. The hosts noted this may reflect a selection bias among respondents already convinced of the argument, but they found it notable that not a single person defended the position that conflict fears should block direct commerce.

Frequently asked questions

What is channel conflict in B2B?

Channel conflict occurs when manufacturers or brands disintermediate their channel partners such as distributors, dealers, retailers, or sales representatives by selling products directly to buyers. This can happen through general marketing methods or over the internet. The opportunity exists for manufacturers to go direct on ecommerce to buyers that their traditional dealer or distributor has been serving, creating tension in the relationship.

Should channel conflict fears prevent manufacturers from selling direct?

According to a Master B2B LinkedIn poll, 100% of respondents said no. The hosts argued the channel is already disrupted. Distributors sell private label products competing with their suppliers, Amazon captures significant market share, and customers want to buy direct from brands. Refusing to sell direct does not preserve a pristine channel relationship. It simply cedes opportunity to competitors.

Why do B2B buyers want to buy directly from manufacturers?

Forrester research found the top two reasons customers shift to buying online are convenience (it is faster) and ease of use, both exceeding 50% in surveys. Price is less important in B2B than B2C because buyers are spending company money, not their own, and getting products quickly to complete projects often matters more than saving a few cents per unit.

How can manufacturers sell direct without damaging distributor relationships?

The hosts and community members suggested several approaches: implement and enforce minimum advertised price policies across all channels including the brand itself, use sales channel agreements with legal teeth, vary assortment by channel so direct offerings complement rather than duplicate distributor inventory, take control of marketplace channels to prevent unauthorized sellers, and be mindful of how pricing is displayed. Ryan Weller from Adidas noted that terms and conditions often have more teeth than MAP policies because they are contracts.

What percentage of B2B websites allow direct purchasing?

Logic.info research found nearly 80% of B2B websites surveyed did not enable buyers to complete transactions online. The hosts noted this represents one of the highest numbers they have seen, reflecting how conflict fears and traditional mindsets continue to limit digital commerce adoption in B2B.

How has the B2B value chain changed?

The traditional model of manufacturers making products and distributors selling them has become much more complex. Branded manufacturers now sell directly, through pure-play ecommerce, through Amazon and marketplaces, and through multi-channel distribution. Distributors make private label products and sometimes acquire their suppliers to vertically integrate. The internet made it possible for buyers to interact directly with manufacturers, fundamentally changing the relationship.

Sources & methodology

  1. Friday 15 Podcast, Master B2B
  2. Incisiv, B2B Amazon survey 2024
  3. Logic.info, B2B website transaction capabilities study
  4. Forrester Research, reasons for online purchasing shifts
  5. Wikipedia, channel conflict definition
Andy Hoar Andy Hoar
Co-Founder, Master B2B

Andy is a Co-Founder of Master B2B, founder of Paradigm B2B and author of the book Bot2Bot: The New Future of B2B Commerce. Andy is one of the leading global authorities on B2B commerce strategy.

Brian Beck Brian Beck
Co-Founder, Master B2B

Brian is a co-founder of Master B2B, Managing Partner of Amazon agency Enceiba, and author of the book "Billion Dollar B2B Ecommerce." Brian has also been C-level digital commerce executive with two decades of experience.

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