Where is your company in the food chain? (Selected Topic).(review of successful credit management and business methods)

This may seem like an off-the-wall question for credit professionals to contemplate. However, given today's economy, it may be relevant to many.

Your company, regardless of industry, products produced or distributed, annual revenues, market share or profitability, has a place in the "food chain." Or, stated in other terms-- your company is positioned in one of three selling channels: first or top-tier, second or middle-tier and third or bottom-tier. The position your company holds within this framework directly affects or perhaps even dictates the manner in which you carry out your daily responsibilities.

In speaking with a number of senior-level credit professionals on this subject, all had a slightly different definition of the sales channels. All did agree, however, that it was important that credit professional know the exact position of their respective companies.

Definitions

First or Top-Tier: A company selling within the first or top-tier sales channel is typically a manufacturer, OEM or large distributor. Such companies sell to a customer base which usually includes large corporate end-users, OEM'S, federal government agencies or large national or international distributors.

Second or Middle-Tier: A company selling within the second or middle-tier sales channel usually has a customer base consisting of systems integrators (sometimes referred to as VARS--value add resellers), medium-sized corporate end-users, state government agencies and regional resellers.

Third or Bottom-Tier: Companies surviving in this sales channel sell to a customer base generally made up of small corporate end-users, partnerships, sole proprietorships, small systems integrators and local government agencies.