Working With Distributors And The Balance Of Power
Retail businesses have to continuously adapt to the changing market. How they distribute their products has to be subject to the means they have in the current climate. Drop shipping is something you may want to consider to lower your delivery and storage costs. But then again you’re putting your product in the hands of another company once it leaves the manufacturing facility. Other methods like wholesale retail such as Amazon, eBay and Google Shopping are all methods you must look into for your own business. Small businesses want to make it easy for themselves when it comes to logistics. Most of the budget has already gone onto design, testing and manufacturing. So how you distribute your products and sell them, is something you will most likely want to simplify. Usually, in order to simplify this process it will have to be taken out of your own hands. A balance power conundrum then occurs when you work closely with distributors.
Maintain your marketing plan
Distributors might have their own marketing department and use them to sell your product. This is an absolutely no-go as you need to maintain your own marketing campaign. Losing creative control is never something you should sacrifice because you want customers to perceive your product in a certain way. For example, if you are selling your safety razor product and have designed it to be beginner friendly, your distributor should present it as such. If you give away your marketing control over your own product, the distributor might display the razor as a product for the advanced shaver. This shifts your demographic and the dynamic of your customer relations.
Most of the time however, distributors won’t do this and instead, want to know what your marketing plan is. You’re still not out of the woods yet because even though the distributor has a policy of the partner having their own marketing plan, they still have their own policies of what is acceptable. If their terms and conditions for marketing plans don’t meet your own, you’ll need to consider a different distributor or change your plan slightly for that particular distributor. The key is, you maintain full control.
Integrity of worth
The main issue working with some distributors is, they will often try to undercut other distributors. This is quite evident in the smaller distributors that are more than happy to sell products at a price which they far exceed in terms of quality. If you are the victim of this, swift action needs to be taken. When your product is being sold at a cheap price when it’s worth so much more, your integrity takes a hit. Your business and product looks cheap, tacky and not very prestigious. This is a nightmare for those that want to build up their brand to be known for it’s high-quality.
You need a strong MAP policy which can be protected and overseen by a company that offers protection and therefore growth of your brand. The benefits are that you end the surprise for your internet sales channel, grow your sales with actionable sales intelligence and have your minimum advertised price and resale policy enforced via automation. When you set a minimum price for your product, any distributors you’re working with must abide by it.
Protecting your name
Wholesale retailers will create performance reports just like any other business. However if you don’t want your name featured in the reports you must agree to this before your agree on the partnership of sales. You might not want your name to be visible in the report because you may wish to not have your name associated with the retailer if they have a bad public relations incident. For example, if the distributor was found guilty of selling counterfeit products that either ripped off money from consumers or perhaps even hurt them, you don’t want your name featured anywhere near them in the press. Professional circles and businesses won’t take you seriously. Therefore you should always retain the right to protect your name featured in any of their sales and growth reports.
Working with distributors as a small retail business is part and parcel of your early years. Most small businesses spend most of their budget on the creation of products and are happy to save a lot of money by outsourcing their sales channels. However you must never lose the marketing control of your products so the narrative and demographics of your business are kept intact. You should also make sure your products are not being sold outside the boundaries of your MAP policy.
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