Is your brand being weighed down by the distributor model?

It’s All About Control
As an extra link in the value chain, distributors understandably expect their pound of flesh, ultimately impacting your profitability. This is the classic economic downside of going through a middleman, but it’s the price you pay to get your products in front of consumers. But another downside is that you lose any ability to control what they end-consumer pays for your product.
“A key issue for us is control over our pricing” said  CEO of Australian shoe brand Sol Sana, Michael Shandler. “With a distributor in North America, we’d give up control over what the end-consumer pays and we hurt our margins. Not to mention that we would have no idea what’s going on. We lose that intimacy and insight that comes with a direct relationship to the customer. For example, the reaction customers have to new designs, to new pricing or the opportunity to turn an customer service problem into a great experience.”
“It’s not simply a matter of control. It’s a matter of staying focused on what our customers want.”
It’s NOT Just About Control
Why do brands want control? No doubt one reason is because, by their very nature, entrepreneurs desire freedom. They got into the game because they had a vision to build a brand, not to end up constrained a third-party logistics partner. But the most important business reason why brand executives crave control and transparency, as Mr. Shandler hinted at above, is relevancy.
Every brand is doing their best to ride a wave of popularity. They want to stay at the forefront of the consumer’s mind. To be on the must-have list of every retailer. To do so, any brand – growing or otherwise – has to keep their fingers on the pulse of the market or they risk missing the next wave. Therefore, the main motivation for control and transparency is so that brands ultimately have the tools to stay relevant to the consumer.
Adds Mr. Shandler, “Most definitely. It’s not simply a matter of control. It’s a matter of staying focused on what our customers want. I’d rather be talking to a key retailer in Canada about how our new product is being received by their customers than spending half a day on the phone with the Canadian tax authorities.”