5 Myths About Distributors

July 25, 2016

Screen Shot 2016-02-15 at 11.26.37 AMMany companies are hesitant to sign with wholesale distributors at first, probably because of the many myths that are circulating out there about what it’s like to work with them. It’s time to reveal the truth behind these common myths about working with distributors:

Distributors just take orders.

Some businesses mistakenly believe that distributors simply call upon retailers and write down their orders. “How many boxes? When would you like them delivered? Coming right up!” This is not the typical conversation that occurs between a distributor and a retailer. Distributors must first sell the retailers on the product, teach them about what unique value it offers to customers, and then provide pre- and post-sale support. If it were as simple as writing down the number of boxes retailers wanted, wouldn’t you just do it yourself?

The Internet has replaced the need for distributors.

There’s no doubt that technology has made it much easier to get your product to the right people, but that doesn’t mean distributors should be completely extinct. Distributors possess a unique group of skills that help them build relationships with retailers and drive sales. Plus, a lot of newer businesses rely on sales from independent retailers in the beginning, and these retailers usually prefer working with distributors to doing their business online.

Distributors put you further away from the customer.

Yes, it’s true that distributors add one more step to the chain from manufacturer to the end customer. However, this distance will not harm your business, but rather enhance it. Distributors work one-on-one with retailers, so they’ll be able to gain valuable insight into what customers are asking for, what categories are heating up and what competitors are up to, too. This insight will be reported directly back to you, so you can adjust your business strategy as needed. Without distributors in the picture, brands would never be able to tap into this valuable knowledge.

You have to give up margin to work with distributors.

Brands are sometimes hesitant to work with wholesale distributors because it means giving away margin that they could have kept to increase their bottom line. Although this is true, brands need to also realize that they’re giving away margin in return for something much greater: the ability to reach a huge network of retailers. Distributors take the entire logistics process off of manufacturers’ hands, saving them time and money. Brands need to factor in the costs associated with doing this themselves before writing off distributors as a waste of money.

Big retailers don’t want to work with distributors.

There’s zero truth behind the idea that big retailers want to work solely with brands and not with distributors. This myth may be based on the fact that when you work with a large retailer, they want to communicate with both the brand and distributor. This is not because they prefer working with the brand, but because they expect issues to be handled and orders to be fulfilled right away.

Do you work with distributors? What misconceptions did you have about them before and how do you feel about them now? Share your experience in the comments below!

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