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Is your brand being weighed down by the distributor model?

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Giving Up Control
The traditional distributor model works well to quickly get your brand into new markets. You find a distributor, give them exclusive rights to sell your brand in that territory and go back to focusing on building your brand in your home market.
However, for key markets, the distributor model has inherent flaws that restrict the control you have over the growth of your brand or, in the worst case, ruin your brand in that market. The brand-distributor relationship, by its very nature, leaves you unable to influence key elements. The distributor owns the relationship with the retailer. They control the customer lists, the sales data and determine how much marketing effort to put into your brand. Ultimately, they control the destiny of your brand in their given market.
Not in the Same Boat
Not only do you sacrifice control, but your interests and the interests of the distributor often diverge. Your goal is to put your brand in good-fit stores, deliver exceptional customer service and grow your brand in the minds of consumers. The distributor’s goal is to convert inventory into cash at the best price and as fast as possible.  The distributor – not the brand owner – decides how much effort to put into the brand, where to place the product and how to price it.
This lack of alignment also crimps your upside potential. Distributors are understandably cautious about their cash flow. They don’t like to take risks on holding inventory. Yes, they’ll order what’s been sold to retailers during the pre-season selling cycle and they should buy overage stock to take advantage of in-season sales, but doing so ties up cash. If you’re an emerging brand, you only have one or perhaps two seasons to prove to the distributor your brand is worth the effort and added risk. If not, they have plenty of brands in their portfolio to slot in your place. This risk aversion by your distributor stunts your ability to grow market share with in-season sales. And it definitely doesn’t give you the feeling that you and your distributor are in the same boat.

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