Tuesday, February 4, 2020

Throwback Tip #312: 4 Ways Distributors Can Help Your Business


Have you ever wondered if working with a distributor would benefit your candy business? In this week’s post, RCI member Chris Romocean, with 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.

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