What Distributors need to know about your ProductsSimon Harkin
What Distributors need to know about your Products
The task of a distributor is to represent brands and take them to market in the most effective way.
Suppliers should realise that a distributor will evaluate your product in a different way than your end user does. It may be an incredibly fantastic and exciting product, but the numbers must be right.
The distributor has to make a profit, and the retailer has to make a profit. If you get your numbers right, it’s easier to partner with a distributor and you can harness the power of scale.
- Cost of your product – is there room for profit to be made by you, the distributor and the retailer while representing an attractive option for the consumer
- The cost of stocking and fulfilling your product
- If your product is scalable
- Do you have multiple products under one brand?
Profit and costs are obviously important – everyone has to make a living. If your product is relatively low-cost, scalability is going to matter, as a distributor will need to be able to sell a lot of the product tor retailers to make the effort worthwhile.
If you make multiple products under your brand, it’s a more attractive proposition for distributors as they can buy multiple products from individual suppliers; keeping administrative costs down and offering an attractive selection for retailers.
Think like a Distributor
A distributor will be asking themselves:
Do we already know from our network of retailers that there is a need for this kind of product? Have they identified a consumer desire for it?
Do we know from our own market research that there’s a gap in the market for this product? Why is it going to be attractive to people?
Does this supplier have other products we can sell; if not now, does he plan to have more?
Does this supplier’s product represent a worthwhile profit for us to represent?
What is different about his product and profit than the guy making a similar product that also wants us to represent him?
Will the suppliers own marketing efforts help drive overall sales?
What kind of inventory levels will we need to maintain?
How will stocking, warehousing and delivering his product affect our cost of distribution?