4 Proven Tactics to Manage B2B Channel Conflict

B2B companies are constantly torn between the revenue potential of marketplaces like Amazon and the need to keep peace with their established channels.

It’s a real issue: over a third of companies avoid Amazon entirely to sidestep potential distributor drama. Yet, despite everyone’s best intentions, channel conflict remains one of the toughest challenges to navigate.

The Multi-Channel Reality Check

The distribution landscape is a web of channels, partnerships, and players. Branded manufacturers are selling everywhere: direct from their own sites, on Amazon, through distributors, and even alongside private label competitors.

Transparency Reshapes B2B

It’s the “age of transparency,” where B2B buyers hold all the cards. They’re informed, they’re empowered, and they’re not afraid to shop around.

For B2B brands, this transparency brings both opportunity and risk. On one hand, the multi-channel approach offers a chance to reach buyers wherever they are, but on the other, open marketplaces like Amazon can turn into a breeding ground for conflict.

Unauthorized resellers jump in, slash prices, and undermine carefully crafted channel strategies. When prices dip on Amazon, other resellers feel the pressure to follow, eroding margins and straining relationships. In a few swift moves, a brand’s hard-earned reputation can begin to unravel.

This new reality is a call to action for B2B brands. This isn’t the time to sit back and hope things don’t change. B2B brands need to jump in, claim their piece of the multi-channel pie, and keep a firm hand on the tiller.

So, What Can You Actually Do to Manage Channel Conflict?

There’s no quick fix, but there are concrete steps to manage channel conflict without driving partners away. Here are the big hitters:

1. Vary Your Assortment by Channel

Offering exclusive products or bundles for each channel reduces head-to-head competition, giving partners something unique to offer without stepping on each other’s toes.

How to Execute:

Define Product Tiers: Offer basic, standard, and premium SKUs aligned with different partner types (e.g., OEMs, distributors, or wholesalers) to support channel-specific sales strategies.
Exclusive Configurations for Key Partners: Create product configurations or bundles exclusive to certain channels, such as online B2B portals versus traditional distribution partners, to reduce direct competition and encourage partner loyalty.
Reward Partners with Marketing Support: Provide co-marketing funds, joint promotional campaigns, or priority access to new releases to partners who promote channel-exclusive configurations. This strengthens their ability to drive demand while staying aligned with your strategic goals.
Tiered Incentives for New Product Sales: Introduce tiered incentives for partners who drive sales of specific SKUs designed for their channel. For instance, distributors who sell more units of a regional product bundle could receive discounts, higher margins, or rebates.

2. Know Who’s Selling

Regularly vetting resellers is crucial for keeping unauthorized sellers out and maintaining control over pricing.

How to Execute:

Audit Channel Partners Regularly: Set up a quarterly or annual review process to assess authorized resellers’ performance, pricing adherence, and overall compatibility with your brand.
Establish a Clear Onboarding Process: Vet resellers thoroughly during onboarding to ensure alignment on pricing, advertising, and brand presentation.
Create a Blacklist of Unauthorized Sellers: Maintain a list of unauthorized sellers and educate authorized partners to avoid collaborating with them, preserving your control over distribution.

3. Take the Wheel on Marketplaces

Rather than watching from the sidelines, actively manage your listings on marketplaces like Amazon. If you’re considering how to approach Amazon, it’s helpful to understand the two main options for selling: 1P (First Party) Vendor Central and 3P (Third Party) Seller Central.

Here’s a quick comparison:

1P Vendor Central (Wholesaler Model)	3P Seller Central (Direct Seller Model)
Sells directly to Amazon in bulk.	Sells directly to end customers on Amazon.
Amazon controls retail pricing, creating potential conflicts with other channels.	Seller retains control over pricing, reducing channel conflict.
Suitable for bulk sales, but profits can be lower due to Amazon’s pricing control.	Often leads to higher revenues and profits for sellers.

Experiment with a Hybrid Approach: Many brands find success using a hybrid strategy, selling some products via 1P for bulk transactions and 3P for high-margin items where price control is key.
Set Up an Internal Marketplace Team: Appoint a small team to manage your marketplace listings actively. This team should monitor pricing, handle content updates, and keep an eye out for policy compliance.

4. Give Distributors Their Own eCommerce Space

Next up, manufacturers can take a proactive approach by creating dedicated eCommerce storefronts for their distributors. Think of it as giving each partner a customized storefront, one that helps them thrive within the brand ecosystem without stepping on each other’s toes or undercutting prices.

Platforms like OroCommerce enable such multi-brand, multi-store functionality, all managed under a single license and platform.

How It Helps:

Contain the Price Wars: By giving distributors a controlled environment with clear pricing guidelines, manufacturers can curb the tendency for rogue discounts or random price drops. This way, everyone plays by the same pricing rulebook, and there’s less risk of undercutting across channels.
Enable Targeted Flexibility: Distributors can still localize with promotions or market-specific offers – but within preset boundaries. It’s a compromise that keeps the brand on course while letting distributors add their own touch to serve local markets.

Successfully navigating channel conflict requires a proactive, strategic approach to multi-channel management. Make it a core focus, not an afterthought.

After all, channel conflict is less about trying to stop change and more about finding a way to make it work to your advantage.