Have you ever wondered if working with a distributor
would benefit your candy business? In this week’s post, RCI member, Linnea’s Candy Supplies sheds light on a distributor’s role, as well as some of the ways a
good distributor can offer value to confectioners.
HOW DISTRIBUTORS ADD VALUE
Manufacturers are not always able to service
every customer as well as they would like and that’s where distributors can
help. Whether due to a manufacturer's geographic location in relation to their
customers or their ability to help with the administration of sales, customer
service, inventory and logistics, having distributors lets a manufacturer do
what it does best. Make product. To be successful, a distributor needs to add
value to the products it sells.
SPEED
Manufacturer’s lead times can be difficult for
confectioners to contend with, especially during holiday seasons. Lead times
can be anywhere from several days to several weeks. A distributor usually has
product in inventory available for immediate order fulfillment.
PRODUCT BUNDLING
A distributor should have a wide range of
products that complement each other and meet the needs of confectioners. Having
the ability to combine products from various manufacturers all in one shipment
can significantly reduce shipping costs. Product bundling also saves time.
Placing one order is much faster than placing several.
LOWER MINIMUMS
For many confectioners having a lower minimum
order means they can order the quantities they need, not the quantities they
have to. Requirements for precious storage space are reduced and their cash is
not tied up in excess inventory.
INVENTORY
The burden of keeping a large inventory is
shifted to the distributor allowing confectioners to use just-in-time
strategies and smaller orders on a more frequent basis.
COMMON MISCONCEPTIONS
There is a misconception that prices from a
distributor will always be higher than buying direct from the manufacturer.
Many distributors have prices that are comparable and sometimes lower than
buying direct from a manufacturer. Distributors purchase products in large
quantities from manufacturers and get discounts based on large volume orders or
quantities committed to by contract. With this discount, a distributor can
offer products at competitive prices.
Another misconception is that if a customer
stops buying from a manufacturer and gets their products through a distributor;
they are not as important to the manufacturer and will lose contact with them.
While it is true the distributor will be assuming the customer service role,
the manufacturer’s technical support, expertise and knowledge will always be
available either through the distributor or directly. Manufacturers value their
customers and want them to be successful whether they buy direct or through a
distributor.
HOW TO MAKE THE MOST OUT OF YOUR
RELATIONSHIP WITH A DISTRIBUTOR
Distributors are faced with many challenges.
Being able to accurately forecast, not only levels of inventory for thousands
of products, but also planning for lead times and the logistics involved in
replenishment is critical for a distributor’s success and the success of its
customers. Good communication with the manufacturer and the confectioner is
vital.
Another challenge is being efficient at getting
products to customers fast, especially during the busiest parts of the year. A
distributor needs to have a great team working together from the time the order
is placed until it reaches the customers door.
In today’s business environment, now more than
ever, a distributor creates value for manufacturers and confectioners alike.
Crave
more?
If you like what you read here, look for the "Subscribe now" box
on the right to enter your email address and start receiving weekly tips, like
this, delivered straight to your email inbox. RCI's Tip of the Week blog is
just one of the many resources we offer to help candy makers refine their
craft and build upon their business and marketing practices.
