Who Needs Who More? The Power Game Between Supplier and Agent

11 Feb 2016     |    Taz Bareham

It’s kind of like the age old question: Who came first, the chicken or the egg? In the tourism industry, both the supplier and the agent depend upon each other in order to grow their business and succeed in their careers. The supplier needs an agent to sell their products, but the agent needs the supplier to create great products worth promoting. So who needs who more? The trick is understanding that both the supplier and the agent need to rely upon each other in order to succeed, rather than trying to trump each other in order to remain the powerful party. There are 2 main forms of dependency when it comes to the supplier agent relationship.

Cost-Based Dependency

Cost-based dependency tends to favor the supplier, or the tour provider. This is because the supplier sets the costs for their products, and then provides those costs to the agent. If you feel that your relationship is completely based on the cost of your products, then you are probably holding more power as a tour provider. However, this may not benefit your business in the long-term. As your products are easily copied and offered for a lower price by your (new) competitors.

Benefit-Based Dependency

Benefit-based dependency might leave the agent with more power. This is due to the fact that the agent is able to package the tour with accommodations and transportation that make it more marketable, or they have access to the exclusive rights to sell one particular tourism product. While the agent may feel good about being in a partnership dependent upon benefits, it may make it difficult for them to connect with other tour and activity providers in the industry, as your unique tours attract people to the package.

Balancing it Out

Both the supplier and the agent should work together in order to balance the power, because that is most beneficial to both parties involved. For instance, a tour operator can offer their products to many different agents, and those agents can then compete with one another in order to sell that product most effectively. In addition, the agent can use cost of various other tours to choose the products they want for their packages, ensuring that the suppliers have to keep prices competitive for the marketplace. A collaborative and even slightly competitive approach is best, and will help everyone succeed.

The key to establishing a good relationship with any agent is to provide them with fair prices and an easy way to book your products. You cannot expect an agent to be motivated to sell your products if you are offering a low commission rate or make it hard for the agent to receive any payments at all. Consistent, easy pricing ensures that agents can promote your products and increase your bookings for you. In addition, you can offer them access through a Channel Manager that allows them to see your live availability at any moment, and to book with you automatically online. With Rezdy, you can improve your distribution strategy and connect with more agents then you ever dreamed possible. Rezdy helps you balance the power between supplier and agent in a way that benefits both parties. For more information, check out our online distribution ebook and begin your free trial today.