For suppliers, one question comes up again and again in their distributor relationships: Should you treat your distributors like employees, or should you treat them more like customers? The answer isn’t always clear.

Distributors seem like employees because they sell and deliver a supplier’s products and services to the marketplace. At the same time, distributors often have extremely demanding needs, much like customers do—and if those needs aren’t met, the relationship will end, just as it can with a customer.

Here at Gallup, our supplier clients often face this conundrum, and they ask us whether treating their distributors as employees or as customers will improve distributors’ performance and increase market results. My experience shows that the answer is more complex: Companies must treat distributors as if they’re both employees and customers. But in the very best supplier-distributor relationships, suppliers take this even further: They treat their distributors as partners.

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