Saturday, December 11, 2010

A few thoughts on channel-stuffing

I've seen several articles recently alleging that General Motors has engaging in channel-stuffing -- shipping out more cars to dealers than the dealers could sell -- in the months preceding their IPO. I have no idea if it is true, though the graph accompanying this blog post would seem to provide some evidence to support the idea -- though it may also merely be proof of poor forecasting (another point of some interest, of course).

Regardless of the merits of the charge against GM, something that I notice is that such charges are being made with more frequency, to the point that the term 'channel-stuffing', once used only among channel marketers, has become fairly common.

Channel-stuffing has always been a stupid tactic, in my opinion, at least for the company involved, though not necessarily for individual employees involved. (The employees may benefit from incentives based on short-term sales goals, and figure on having moved on to another position before the consequences hit). But the growing knowledge of the practice among the general public (read, 'customers') and the frequency with which the charge is (fairly or not) being leveled, means that companies can suffer a PR hit -- whether the real problem is channel-stuffing or bad forecasting. A good reason to avoid both, it seems.

What do you think? Is channel-stuffing just commented about more these days, or has it actually becoming more common?


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