Manufacturers that work with distributors must use far fewer warehouses, trucks and personnel, because distributors take up some of these functions required to make the product available at the final point of purchase. A manufacturer might, for example, use one exclusive distributor in each of the 50 states and need only three major warehouses, located on the East Coast, the West Coast and the Midwest to supply these 50 locations. Had it used no distributors at all, it would have needed 50 warehouses instead of three. The funds saved by relying on distributors for critical functions can be invested into such things as research and development, advertising and other functions.
Functions of Distributors
Distribution process is one of the keys in supply chain because not only does it affect costs, it is also correlated to customer satisfaction and the reputation. Therefore, distributors play a crucial role and function in the supply chain. What are the functions of distributors? Find tips to become an optimal distributor in the following explanation
Purchasing
Distributors are responsible for buying goods/services from the manufacturers (directly) to be distributed to the next party in the supply chain.
Storing
After making a purchase, these items are stored for a while before being distributed. That is why distributors must have a warehouse when buying physical products. In addition, the distributor bears the risk of the stored goods, for example, if they are damaged, expired, or cannot be resold.
Find Out More: 5 Steps to Maintain Product Quality in Warehouse
Selling
The selling function places the distributor as a party that resells goods to agents/consumers.
Transporting
The distributor carries out the activities of moving goods from his warehouse to the buyer.
Read More: Reduce Shipping Cost With Technology
Sorting
Serves as a party that performs classification in sorting various products purchased according to type, size, and other specifications.
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Informing
Distributor becomes an extension of the manufacturers to convey information about the product/service distributed to the buyer, such as product info, details, prices, availability, and applicable terms.
Promotion
This function involves distributors’ role in promoting the products including discounts, comparisons with competitors, merchandise, etc.
Tips for Running an Optimal Distributor Function
Provide Attractive Price Offers
Low-cost products are certainly buyers’ favorites. Give attractive discounts and promo systems to your potential buyers.
Provide The Best Service
Besides a low price, accessible distributors, smooth communication, and friendliness also support the optimal functioning of distributors. Don’t forget to provide the best service to your customers.
Easen Shopping Process
As a distributor, ensure you enable the series of smooth buying processes (from bidding to processing payment).
Fasten Goods Turnover
It is undeniable that the turnover of goods in the supply chain is a challenge for distributors. Be sure to have a system that can monitor your inventory turnover more transparently.
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