Pros and Cons of Distributors

 

Pros and Cons of Selling Through Distributors

I recently met with a client interested in promoting a new product into the national market for commercial office cleaning supplies. Theirs is a new and pretty unique product which could be a good addition to the cleaning and sanitation products that are currently available.

Because of the nature of the product, selling directly to end users (in this situation janitorial service companies) a bottle or case at a time probably wouldn't be successful because currently established supply habits and channels involve local, regional or national distributors who stock and ship a wide variety of commodities and utensils such as soaps and mops. It's inconvenient and impractical for a service company to establish a new vendor relationship to make infrequent purchases of a low dollar item. Distributors serve a valuable function in that marketplace by purchasing and stocking in bulk and making the end user's operations more efficient.

But, seldom do distributors have a natural means or motivation for promoting or publicizing a particular item in their inventory. The distributor's business is to fill orders received from customers. Not to tell the customers what to buy. So, if you're considering getting your products into a market via distributors, keep in mind that the sell through is probably going to require some additional (perhaps significant) effort. The task will be to a) make your ultimate customers (e.g. janitorial service companies) aware of and motivated to purchase your product, b) tell your customers where to buy your product and c) educate your distributors to any extent necessary about your product.

Selling through distributors as opposed to directly to the end user of your product may be the best process for your market. But it also may include more steps and more effort that you had expected.

Posted by Peter on 2/7/2013 4:33:27 PM