channel conflict refers to the friction or competition that arises when a company's sales channel partners, such as resellers or distributors, compete against one another or the company's direct sales efforts.
Example: A manufacturer of smart home devices sells its products both through online retailers and its own website. When the manufacturer offers exclusive discounts on its website that are not available through its retail partners, it can lead to channel conflict. Retail partners may feel undercut and may reduce their marketing efforts or stop carrying the manufacturer's products, which can adversely affect overall sales and partnerships.
Understanding channel conflict helps businesses implement strategies that maintain harmony among sales channels, safeguard partner relationships, and optimize overall sales performance.
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