Is your brand being weighed down by the distributor model?

Aligned Interests

“We’ve had situations where distributors weren’t as proactive as we would have liked in pushing our brand” continues Searancke, “In some cases, it was because they had their own stores competing for the same customer as us. In another case, one retailer complained about the predatory pricing practices of another; which was under the distributor’s control, not ours. Under Evolution’s model, there’s no conflict of interest and we’re better able to manage channel conflict.”
Searancke is quick to add that distributors do work for certain markets: “We had a distributor in Romania come to us and it’s worked out great. We wouldn’t have been in that market otherwise and it helps us add volume to our production. But in Canada, we’ve always gone direct and it works great. We have our own sales reps. We know who our customers are. We ship our goods [to Evolution Fulfillment] and they handle all the logistics and warehousing. The model has worked so well so far that we plan in the future to have Evolution collect our accounts receivable and manage the accounting of everything. It’s seamless, consistent and there’s zero risk of what happened to us in the UK because we have that direct relationship with the retailer.”
According to Martin, that’s exactly the kind of statement that validates the Brand Fulfillment model: “Our interests are fully aligned and everything is transparent. There’s never, ever any conflict of interest. Our customer list is [the brand’s] customer list. Their growth is our growth.”
Going global

Although Evolution Fulfillment is a Canadian 3PL and distibution company, their focus is on providing brands from overseas turn-key North American distribution solutions. That being said, even though Evolution doesn’t have their own 3PL warehouses in Europe, they were able to step in and help Nui Organics recover from the collapse of their UK distributor by tapping into their global network of partner warehouses.
“We call it Evolution Global” said Harrison, “It means we can offer a brand from anywhere in the world the same level of service in multiple markets. In the circumstances that Nui Organics found themselves in in the UK, we were able to leverage this network and help them recover.”
Better Margins = Better Profit

Another big advantage that would get any brand owners attention is the impact the Brand Fulfillment model has on the bottom line. Like the direct model, the Brand Fulfillment model enables brands to remove the middleman layer and increase the all important margin.
“It’s significant” adds Shandler, “Depending the product, we talking about an additional 40-50% in margin that otherwise would have gone to the distributor.”
Searancke echoes the impact on profitability: “I’d have to give a larger discount to a distributor. Sometimes discounting is worth it to get into a small market or to boost production numbers, but with Evolution’s model, I’m able to skip the middleman and squeeze out more profit on every unit sold.”
“I’ve crunched the numbers and we find we can add another 10% to a typical brand’s bottom line compared if they had gone the traditional distributor route” said Martin.
Harrison adds “This isn’t a theoretical conversation. We’ve been running this model successfully for three years and it’s a fact that it really works. We save brands money, we pad their bottom line and we work with them to grow.”