The Six Numbers
April 28, 2011 § Leave a comment
Welcome to The Six Numbers – a blog for those who sell to and through intermediaries. Over the years we have worked with a wide variety of firms selling to Distributors, Resellers [B2B] and Retailers [B2C]. One thing that’s been important in every single client engagement has been the economics of the relationship these firms have with their suppliers. It’s not that direct sales are blind to the economic costs and benefits of a transaction, it’s that the channel can only feed off the economics of their relationships with their suppliers. It’s the raison d’être for their very existence.
So this blog will focus on the six numbers which are central to understanding channel partners – their revenues, cost of sales and operating expenses; and their inventory, receivables and payables. With these six numbers it’s possible to do all manner of calculations to understand the profit and cash drivers of any channel partner. But it’s not just about calculations, it’s much more than that. So watch this space over the coming weeks and months as we explain how to get close, really close, to your channel partners.