Motivations for developing direct trade relationships

Abstract

Purpose

This study aims to understand buyer and supplier motives for developing direct relationships with their trade partners.

Design/methodology/approach

A total of 18 in‐depth interviews were conducted across Victoria and Tasmania (Australia); eight with retail buyers and ten with fresh produce suppliers. Both parties were involved in a direct relationship with their trade partner.

Findings

The research reveals a large variety of motivations that influence buyers and suppliers when deciding whether to operate in a direct or non‐direct relationship with their trade partner. Motivations for both parties are remarkably similar, with buyers and suppliers ultimately attempting to minimise the inherent risk associated with operating in a volatile environment.

Research limitations/implications

The study may be limited by the fact that buyers and suppliers of different commodities were included in the study. In addition, the varied nature of the respondents' role may have impacted their judgment. The inability to interview dyads in all cases also limits the research.

Practical implications

This research has implications for both researchers and practitioners already involved in, or considering becoming involved in, a direct trade relationship. Clarification of motivations for bypassing intermediaries shows how both trade partners can minimise external risk and strengthen competitive advantage by assuming a direct relationship.

Originality/value

Extant research within this literary field is largely quantitatively based with researchers focusing on distinct relationship constructs, the definition of relationship marketing and the process of relationship development. In response to these limitations, this research adopted a qualitative approach in examining the core motivations for developing a direct trade relationship within the fresh produce industry.

Citation

Parker, M., Bridson, K. and Evans, J. (2006), "Motivations for developing direct trade relationships", International Journal of Retail & Distribution Management, Vol. 34 No. 2, pp. 121-134. https://doi.org/10.1108/09590550610649786