A checklist for getting the most out of your distribution business

A checklist for getting the most out of your distribution business

Raise your hand if after becoming a distributor you realized how many pitfalls this business has. By now you know them. However, what are you doing to improve? To satisfy ongoing changes in the market place, distributors are under pressure to rethink the characteristics of their sales channels. How does your business assist manufacturers in these 4 main areas:

  • to constantly increase the quality of their products?
  • decrease inventory?
  • to provide end-users with a complete system supply?
  • decrease prices?

To meet these requirements and strengthen your relationship with any given manufacturer, the following key points need to be taken into account:

  1. A COMPLETE UNDERSTANDING OF CUSTOMER NEEDS

With the sharp reduction of customer support provided by manufacturers, distributors must have a complete understanding of customer needs in order to better service customers.

  1. SYSTEMS RATHER THAN JUST PRODUCT COMPETENCE

Product knowledge was a primary characteristic historically for success in B2B sales. That has been superseded by the need for a distributor to understand the complete system into which the product or service is to be integrated. For this purpose, a distributor assembles a number of products and services that are highly compatible. Together, they can compromise a complete system.

  1. CONSULTATIVE SELLING SKILLS WITH ALTERNATIVE SOLUTIONS

Customers want a distributor calling on them to help them increase their company’s profitability. This can normally be done through high-level, consultative selling with alternative solutions to help the customer arrive at the most cost-effective solutions within financial parameters established by the customer. This is why distributors offer a range of lines of alternative functional solutions with each solution fitting a special niche rather than being direct competitors.

  1. VERTICAL MARKET SPECIALIZATION

Summing up the ingredients of the aforementioned three characteristics, one only conclude that distributors should now be vertical market specialists rather than product specialists serving all markets wherever economically possible.

  1. LONG-TERM CONTINUITY AND ACCEPTANCE WITH BUYERS AND SPECIFIERS

This continuity and acceptance is required to allow the distributor to develop and successfully manage the relationships between companies he or she represents and the customers. What are you doing to become an acknowledged thought leader in the industry? Content-marketing and blogging is the answer.

  1. ABILITY TO OFFER LOCAL SOLUTIONS

Corporate planning of manufacturers invariably leads to macro solutions for market opportunities. The intent is to allocate resources wisely and only go after primary opportunities. This means that local needs, while real, may not be satisfied by such corporate decisions making. The distributor develops a flexibility to modify the macro offering to fit the micro need of specialized situations.

  1. SUFFICIENT HEADCOUNT TO PROVIDE INTENSIVE COVERAGE OF ALL TARGET MARKETS

Distributors that have multiple target markets, vertical market specialization and other sales force characteristics indicated above require a rather large headcount of sales personnel to provide required coverage. In case of Victar, sales personnel of distributors is educated by the company.

  1. CLOSE PHYSICAL PROXIMITY TO CUSTOMERS

This is another high headcount need. Most customers prefer to have sales personnel who are local. The need of immediate response is more quickly satisfied by a local person than one who is  1,000 miles away. Consider to be based near the industrial cluster consuming power tools (wood cluster, for instance).

  1. SOFTWARE COMPATIBILITY

The millennium will see an ever-increasing need for a distributor to be thoroughly computer literate. This literacy will be the result of the distributor’s rapid expansion of computer systems interfacing between their company and buyers for a wide array of functions including proposal presentations, just in time delivery interfacing, diagnostic tools and troubleshooting, to name a few.

  1. A VARIABLE EXPENSE

The need for a variable expense, that is, an expense that does not occur at least until a sales volume is reported on the P&L, becomes an economic imperative for the great majority of producers in the millennium market scenario. Vertical market specialization and the need for local support of customers with highly competent personnel require companies to use more marketing specialist l then ever before.

  1. MARKETING IS AN IMPERATIVE

Marketing channel is the medium through which a distributor reaches its customers in order to get in touch and stay connected with potential and existing buyers. There are more than 100 marketing channels. How many of them do you use? While many distributors may select a single channel through which to sell their products, more typically, a distributor will prosper by using hybrid channels, that is a combination of alternative channels to ensure that all market targets are properly reached and get informed (e-commerce, direct mail, webinars, telemarketing and so on).

Are you offering a range of lines of alternative functional solutions with each solution fitting a special niche? Victar professional electric saw will greatly complement your product line.

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