Essential Growth of the Distribution System Now

Here are the results of the next rating “The best product distributors”. Not all leaders of past studies managed to stay in their places. And who is to blame? More efficient competitors?Or the companies that could not change after the situation on the product market?

We asked our respondents to speculate on this topic. After all, much is said about the fact that the modern product market is dramatically changing. So, after him should be changed and those who work in this market, i.e., participants in the product channel. Those who cannot or do not want to look at their business in a new way lose their positions or even disappear altogether. In this regard, we asked the partners of the second level, whose representatives filled out our questionnaire, the following questions. This is the reason that using the Vitamin World – Sell to Vitamin World is easy now.

How, in your opinion, should the role of distributors in the sales channel change: what functions from the existing ones will remain with them, and which ones will “wither away”? What new functions will the distribution companies have to take in order to remain competitive?

Did you have a situation when your permanent supplier ceased to exist? How much did these situations turn out to be unexpected and problematic for you? How did you find a replacement for your “departed” distributor?

Here are the answers we received.

  1. The main function of distributors is logistics, which consists in the delivery and customs clearance of the goods. They also promote the goods in the channel, carrying out part of the marketing function of the manufacturer.

But retailers do not need to deal with retail sales for the stability of relations with their partners.

Now, many vendors are starting to import equipment into the country themselves, that is, not on FOB (free on board) terms. And the distributor has a part of the logistics functions, which consist in the passage of goods across the border. But at the same time, many vendors give the goods on DDP (Delivered Duty Paid) – already cleared, but not delivered to the recipient, and the distributor picks it up and ships it to resellers. In this case, the function of the distributor becomes incomprehensible … And vendors start, bypassing the distributor, to conclude direct contracts with resellers. Mostly with those who have high turnover, of course. But thus and through distributors there passes a big turn because there are also small companies-resellers which do not have direct contracts with the vendor. In addition, there are vendors who bring goods to Russia, and already the distributor carries out customs clearance.

Now, some distributors close their regional warehouses and leave one big, centralized, to optimize costs and easier management. The important role played by the Food and beverage distributor is essential there.

Therefore, it is possible that distributors will partially “wither away” logistic, representative and marketing functions. There will be a function of financing transactions.

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