If you’re selling products to consumers, one of the key choices you’ll face is whether to partner with a distributor. Distributors can help you launch your product faster and allow you to spend more time on other parts of your business. However, if you choose to work with a distributor, which kind should you pick?
Exclusive Distributors
Some distributors may ask you to sign a contract that makes them the only distributor for your product in a specific area. These exclusive distributors could be a good choice for your business if you want to keep your brand’s image intact. When you partner with several distributors, they represent your brand, so you need to be sure they will do it well. On the other hand, if you work only with one distributor, you have greater control over how they showcase the products and who they sell to, which helps you safeguard your brand more effectively.
Intensive Distributors
If you’re aiming to enter the market and cover a wide range of territory quickly, you will need the help of a distributor who is skilled in intensive distribution. This type of distributor works best within industries where customers switch back and forth between brands when their first choice is not available. For example, if a customer prefers energy drink brand A, but it’s not in stock, the customer will buy energy drink brand B instead. In this situation, energy brand A lost out on a sale because the energy drink distributor did not succeed in stocking that specific store’s shelves, so the customer was forced to switch to a competitor. Brands often measure the success of an intensive distributor based on the number of retailers he has been able to secure.
Direct Distributors
Direct store distributors skip the middle man by selling products directly to the store instead of taking them to the retailer’s distribution center. This type of distributor has quicker turnaround times, so he can easily restock items that are selling faster than the store anticipated. Retailers usually love working with direct distributors because of their fast service and ability to meet demand.
Selective Distributors
The companies who hire intensive distributors want their products in as many places as possible, but the companies who work with selective distributors do not. These brands pick and choose the retailers they would like to carry their products, and then hire a distributor to deliver products and provide high quality customer service to them. This type of distributor usually works in niche industries where the retail outlets are limited. For example, a car parts manufacturer would not be able to sell to grocery outlets, so they may work with a selective distributor who can sell and service the niche retailers that do sell their products.
Now that you know the different types of distributors, you can choose the one that best fits your business needs. Have you ever worked with a distributor? If so, which type? Share your stories in the comments below!