Understanding the Distribution Channels and Supplier Selection

Web Business 250/2013 wtr

Understanding the Distribution Channels 

 Manufacture

Buy merchandise directly from the manufacture. Before you contact a manufacture, it is crucial to do researches and decide what to sell. In some situations, manufactures may not want to sell their product directly to you because you may not meet their established Minimum Order Quantity (MOQ); however, if you demonstrate interest in exploring the industry, manufactures can refer you to one of their distributors.

Importer or Exclusive Distributor

Companies that are granted right to import and distribute the product to wholesaler stores.

Wholesaler or Regional Distributor

Distribution Center that is responsible to redistributes the merchandise to regular or local wholesaler stores.

Jobbers

This is another group of companies that make delivery of the merchandise to local stores.

  

Supplier Selection

When dealing with suppliers remember:

• Before you order large quantities, ask for a sample
• Before you purchase a product from a foreign broker, evaluate yours risks by comparing the cost of buying the same product from the local wholesaler stores (Risk V Return). It is good to make mistakes, but you must know how much you can afford to pay for your mistakes
• Establish quality control metrics to ensure that your product arrives in the condition you desired
• Create a Supplier Score Card to evaluate if the supplier meets your expectations
• Start small
• Proof your model and then expand