How Distribution Partners Can Help Technology Companies
In one of our thought-leadership webinars, Lisa Wight, Global VP of Partner Programs, Success and WW Distribution at Ericsson, made a compelling case for leveraging distribution as part of your indirect partnering strategy. Leveraging distribution partners helps expand reach, optimize supply chains, reduce operational costs, and better serve customers in diverse markets. Local distributors bring valuable market knowledge, regulatory expertise, and logistical support that can facilitate faster market entry, improved customer service, and overall growth. You can hear us expand upon these points in our “Value of Distribution” webinar.
As the United States is poised to increase global tariffs, technology companies can leverage distribution partnerships to mitigate cost increases, protect margins, and expand market opportunities. Here are four key (and legal!) areas distribution can help navigate increasing global tariffs:
- Tariff mitigation via regional hubs – By setting up regional warehouses or distribution hubs in key markets, you can stock products locally, reducing reliance on cross-border shipments and thus mitigate tariff-related price increases. These partners can also help absorb tariff-related price hikes, handle local regulatory compliance, and optimize the supply chain to reduce the impact on consumers.
- Expand reliance on SaaS and Cloud – Continue to aggressively shift customer purchases to cloud-based or SaaS solutions that are not subject to tariffs in most countries. By focusing on subscription models and digital products, you may reduce your reliance on physical goods, bypassing tariff barriers.
- Co-invest with Local Partners – Establish joint ventures in countries with high tariffs. A local company (distributor, reseller, or embedded partner) may have better knowledge of navigating tariffs and local regulations, thus helping to minimize costs and delays. In some countries, local content rules may provide tariff exemptions or reductions if a significant portion of the product is sourced or assembled locally.
- Leverage technology for supply chain optimization – Many global distributors offer advanced analytics, machine learning, or supply chain management platforms to track tariff changes and optimize sourcing decisions. These platforms can help you identify when and where to shift production, procurement, or allocation to avoid tariffs or take advantage of preferential trade agreements.
By enhancing distribution relationships, technology companies can hedge against the impacts of increasing global tariffs. These partnerships should focus on geographic diversification, optimizing supply chains, finding favorable regulations, and exploring alternative channels, such as digital goods or joint ventures with local companies. Additionally, leveraging data analytics and supply chain technology can provide further insights and strategies to adapt quickly to the changing global tariff landscape.
Are you looking at when, where, who and how to better leverage distribution? Reach out to us, we can help.
Diane Krakora is CEO of PartnerPath with over two decades of experience defining the best practices and frameworks around how to develop and manage partnerships.
