Product distribution can be a very tough job, especially if you are operating in a saturated market.
With more than 1.2 billion people browsing the internet every day, you have to make sure that your product reaches your customers and it is available when they need it most. In the case of e-commerce, product distribution can be done by selling through distributors or companies that specialize in doing just that. Distributors usually work in close association with manufacturers and their products. They are responsible for making sure that products go to their customers on time and in good condition.
A distributor has several responsibilities, but among them is having contacts with manufacturers.
He must keep them informed about new product launches and expansions. He also works with the manufacturer to see that the distribution of a product happens smoothly and can generate enough sales to recover any investments made in marketing. Distributors can be very good at finding new customers who will buy a product and providing excellent customer service.
One challenge in finding distributors is that not all of them can offer the same price for a product. This might be too much for some small business owners to afford, which is why they sometimes hire middlemen to do the job. Middlemen are great for large companies that have a big budget for product promotion, but not necessarily a lot left for small business advertising.
There are three types of distributors: direct, independent, and third-party.
Direct distributors work directly with the manufacturer. They are responsible for getting a product to the customers who order it and for delivering it to them. They also work with the manufacturer to monitor inventories and to make sure that suppliers are honoring orders. Because of the direct relationship between a distributor and manufacturer, direct distributors often have access to manufacturer samples or product features.
Independent distributors work as agents for the manufacturer. They can act as representatives to customers in negotiating prices, product availability, and timing of shipments. They do not have direct contact with customers, but they can put together deals and get products into the hands of retailers. Independent distributors work with companies that are too large to handle product distribution themselves.
The third type of distributor is a third-party distributor. These third-party distributors are contracted by retailers to help distribute the manufacturers’ products. This arrangement allows the company to control costs and to ensure quality of the product. However, third-party distributors must abide by the rules set out by the manufacturer. They cannot directly promote the product or charge for shipments, though they can require manufacturers to pay for product placement at their stores.
Many companies have tried to do product distribution themselves.
Though some businesses succeed with limited success, most distribution efforts fail because they are attempting to do the job on their own. Distributors often experience issues with quality and shipment time. They may not know about important terms to use in negotiations with wholesalers and manufacturers.
So which type of distribution will work best for you?
You need to consider your target market and your budget. Choose a product distribution company that offers you the most efficient ways to get your product to the customer. If you make a mistake with your product distribution, you could face stiff penalties.
To find a reputable company, check with the Better Business Bureau, your local state attorney general’s office and other business organizations. Ask questions about their experience and background in product distribution. Find out if they have ever had complaints filed against them. You should also ask about their fees and what, if any, screening process they use to make sure that they are reliable and trustworthy.
A product distributor is more likely to sell a well-made product to the end user than are individual salespeople. For this reason, companies that offer multi-level marketing as a service or as part of a package are particularly attractive. With an MLM program, distributors earn commissions on each member who sells a product.
A distributor needs to be able to identify a market niche and have a good reputation. Her or his education and work experience are two major qualifications that the product distributor will need. Many product distributors start out with no education or work experience. The best product distribution companies will offer mentoring programs and extensive training courses for new distributors. These courses help new distributors understand the products, their selling points and their target audience. Once a distributor understands these things, he or she can then find a way to market the product effectively.