Just don’t expect them to be a magic bullet solution to all of your problems. Marketing to Millennial Females: For Fashion Brands, Why Elon Musk’s ‘Not a Flamethrower’ Is Great Marketing, Ignore Local SEO at Your Peril: The Impact of Local SEO on Your Small Business, 4 Easy Ways to Research What Your Reader Wants in a Headline. Distributors and volume retailers drive hard bargains. 0800 181 4422. Once you have established a good relationship with retailers, revenue will grow much faster, and it’ll be more consistent. The distributor is usually responsible for the shipment of goods, and the accompanying customs formalities and paperwork. Freedom based: You are in business for yourself. Some businesses have an export department within the company that is responsible for exporting activities. The same logic that convinces a startup brand to begin wholesaling in the first place can also convince a brand to take up with a distributor (or two, or ten). But let’s take a look at why many brands either avoid distributors altogether, or only use them to access certain channels, while continuing to service their independent accounts directly. Many distributors carry a stock of the products they sell - so they buy in bulk, and take care of warehousing and inventory control in the overseas market. Nevertheless, there comes a point in every sales team’s course where you run up against the limits of what can be achieved through self-distribution alone, in terms of both revenue and market penetration. Smaller profit margins 2. Bedford Street It’s a personal question of whether you really need them for your business, and if your goal is to get big, then you will have to play that game at some point. Instead of an individualized approach, the distribution channel can reach … It would be easier for a distributor with an established reputation and contacts list to introduce a new brand to the market than it would be for you. The above are just some of the advantages of an indirect distribution channel for manufacturers. And, of course, retailers carry multiple products, including your competitors’ So before you take the plunge, take the time to study both sides of the equation, as well as research the var… Pros and Cons of Multichannel Distribution Systems. Any number of things can make you a pain to work with. Even the smaller regional distributors will only give your product line the “mindshare” equal to the percentage of their total sales that your line makes up. Distributors can be a serious headache to work with because they will behave in a way that makes the most sense to them and their business. These include being able to create awareness of the supplier’s brand on an international level and reaching a market in other territories that would be difficult to reach without incurring the time and expense of setting up a permanent place of business overseas. Pros and cons of using distributors There are obvious benefits associated with using a distributor. Because many independent and enterprising companies can now imitate state-of-the-art medical devices for less cost (albeit lower quality), the average medical device distributor is faced with the dilemma. That network is essential and helps you quickly ascertain the distributor's ability to make sales of your … refer to the “Big Retail, Distributors, & Brokers” section in our Glossary. Valuable product and brand feedback will now be filtered through the distributor’s reps, if it makes it to you at all. Here are some reasons why you might choose to avoid them: In short, when you sign on with a distributor, you forfeit a lot of control over your brand. The main advantage of using a distributor is simplicity. Here are a few Pro’s and Cons of direct selling to consider: Pro’s. nibusinessinfo.co.uk ... (DTC) and taking on roles that were once reserved for distributors and retailers. If you don’t like it, tough. Distributors enable you to access international markets while avoiding logistics issues and many trade-related risks. The pros and cons of expanding a business internationally show that there are some increased costs, but there is a good chance to experience increased profits as well. Retailers need a lot from you, and we’ll cover much of it in the posts that follow. If you’re hearing many of your retailers tell you that working with you is a pain because you only sell direct, then it’s time to look into your distributor options. If you use a sales agent, you can use the commission structure to motivate them - there's no similar mechanism with a distributor. The purpose of this blog is to provide tips and tricks of the trade that will help you sell your brand more gracefully, efficiently, and profitably, while avoiding the common pitfalls of wholesale. There’s something so rewarding about managing a healthy list of accounts, each one a long term partnership that you grow from the ground up, and tend to for as many years as the partnership remains mutually-rewarding. Pros and cons of using agents vs. distributors in your international market entry strategies. Share . Maybe they’re too cocky or aloof, and they don’t check in frequently enough. Distributors generally spend on marketing to support their sales effort, although they will sometimes expect you to make a financial contribution. If you start selling to larger retailers through a distributor, or if your distributor places you in every store in their territory, When you sell through distributor, you will naturally lose some control over how your product is physically handled. Companies can use a range of business models to organize their direct exporting efforts for their market entry strategies. If you sell to a UK-based distributor, you avoid currency-related risks. What are their pain points with your product? Landing one of these accounts can be like landing 100 independent stores in one fell swoop — the wholesale equivalent of striking gold. From your standpoint, they will often appear to be completely incompetent and irrational, but they’re just running their business the way they’re going to run it.