Business Tip: Choosing the right distributor

Sep 24, 2008

Have you ever thought about what you should look for in a sports and health supplement distributor? Unfortunately, there are no books called "How to Choose Your Distributor" to help you with one of the most important investments you make in your business.

Note: If you’re already happy with Europa — and we hope that you are — stop reading. That means you’re experienced and are satisfied with many of the points covered in the next few pages. Or if you’re just curious what all distributors should be able to offer in order to be considered true "business partners", then read on.
As always, we’re interested in your feedback and comments. Please feel free to email us at feedback@europasports.com.

Choosing the right distributor to partner with is a strategic business decision that can make the difference between short-term needs and long-term revenue growth and potentially one of the most crucial elements in ensuring the health and success of your business.
"But where do I start," you might ask? Three things every business should consider when researching your distributor is Product, Price and Delivery.

PRODUCT DEPTH
The best distributor must cater to all your product needs. It is important that your distributor stocks a huge variety of goods and products with hundreds of brands that you can choose from. Your first step (depending on your product mix) should be to verify that your distributor will have what you need, when you need it.  As a business owner, you don’t have time for back orders or making several calls to different suppliers to purchase your products. Plus, a good distributor will never take your money for products they don’t have in stock. Time is money and when your bottom line depends on having product in stock and available, you need to have a company you can count on.

THE PRICE IS RIGHT
While it’s easiest to focus on the cheapest price when shopping for products, the question you should really ask is "are you getting the best value?" If you are getting a product at a steal but it’s not going to arrive for an additional 2 weeks, are you really saving money? You can’t sell what you don’t have on your shelves. Your customers may even go elsewhere to find what they need.  

What are you really paying for? Is it quality? Is it fresh? Do you get service, selling points and advice? Is it an exclusive product? A good distributor will get you the products quickly and have the most variety of products that will turn register rings into cash for your store. You may get it cheaply but if it doesn’t fly off the shelf it won’t make you any money. For you, differentiating between cost and price is the hallmark of a shrewd business owner or buyer. In thinking about value, look at what your distributor does for you that makes your life easier while improving your business. If your distributor exceeds expectations with every order, then the value that service brings to the table is invaluable. Always focus on value because the cheapest price may cost you more than you realize.

DELIVERY OPTIONS TO MEET YOUR NEEDS
Can you get your product when you need it? Can you afford to wait? Obviously, time is money in business. Inquire about what delivery solutions you can participate in and what will be right for your business. For example, if there’s a local delivery route in your area that you can participate in, then you may qualify for free shipping. Maybe your orders are usually heavy. Maybe your order weight would qualify you for a more cost effective shipping method such as LTL (less than a truck load) shipping. This would be especially useful for larger orders, such as an initial store set. Ask your distributor about these options. Researching and finding the best delivery options for you will save you money as well as time in getting your product delivered to you quickly and efficiently.

Large or small, find a company you can trust to be with you as your business needs grow and change. Using your distributor as "your own personal storeroom" can improve your cash flow because you don’t have to maintain large inventories on hand. You can then order when you need it. Or, if you have a particular item that you sell a lot of, you need a distributor who can keep their inventory stocked.

After price, product and delivery you might ask yourself,
"What else should I be looking for?"
Again, you want to ask questions and check assumptions.
Keep on reading to see if you’re getting the most out of the
distributor you do business with.

VALUE ADDED SERVICES
Most companies offer some sort of value-added services, so it’s fairly standard practice. The question you should ask yourself is, "Do these services meet my needs?"  Does your distributor offer programs and services that make doing business easier and more beneficial for you? Are you informed of the latest products, specials and trends? For example, distributors can average over 20 new products a week. If your supplier is taking advantage of technology trends then they can notify you of the latest products, nutritional information or even price changes via email or online. Distributors usually provide more than just a product delivered to your door so it pays to ask what else they offer and how they can help your business succeed.

SERVICE AND EXPERIENCE
How many people are working for you at your distributor? Do you have a dedicated sales representative that knows you, your customer and your business needs? Be sure to find out what their experience is, if they work out or if they have experience with the products. A quality sales representative should have some type of sports supplement experience, whether it is a personal training background, education or hands-on store management. A good sales representative and customer service team will be able to give you all the information you need to exceed your service expectations.

NEW PRODUCTS AND TRENDS FOR YOUR BUSINESS
Of course, one of the qualities you should look for in choosing the best distributor is that their list of manufacturers is updated regularly. Does your distributor have the latest and hottest products for you to choose from? Are the sales reps knowledgeable on what’s happening in the industry?  The inherent nature of the sport supplement industry is that you have to be educated on the latest and greatest products hitting the market. Word-of-mouth advertising as well as traditional advertising media can launch products overnight. You want to be able to depend on your distributor to have these products and deliver them to you quickly. Your customers are going to ask for them and you need a business partner that is on top of industry statistics and product trends.

TECHNOLOGY
Practically any aspect of business can be automated in this day and age. Ask yourself, what types of technology does your distributor enlist? Is your distributor on the cutting edge of technology or still handwriting your order? By implementing technology such as an automated Warehouse Management System, your distributor is ensuring the freshest products are delivered to your door every time. Does your distributor have a web site with extensive product information, online ordering and resources for your business? If your distributor isn’t making investments in technology, can they meet your needs? Will they be able to grow as your business grows?
On the flip side, what if you would rather keep your business transactions more personal than automated? Can they still cater to your needs and offer a procedure that allows for a pleasant and comfortable business relationship?  

REPUTATION AND RELIABILITY
Above all, the best wholesale distributor is a trusted company with proven reliability and a good reputation. Does your distributor have checks and balances in place for their manufacturers? Are your orders frequently delayed or on backorder? These are some of the questions you may want to ask, so you know that you can depend on your distributor. For example, have you ever thought about your supply chain and what would happen if a natural disaster disrupted your ordering?  Ask if your distributor has a Disaster Recovery Plan in place so that your business flow is not interrupted if the distributor would be faced with a natural disaster or other type of disruption.

Selecting the right distributor for your business is critical. Focus on the importance of finding the best business partner possible that works for you and your business. It always pays to research and investigate the types of businesses you choose to align your business with. As a business owner, you have too much invested to not be selective and informed. As much as you invest in your business—should you trust it to just anyone?  Ask the right questions, do a little research and find out if your distributor is working for you. 

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