Wholesalers In Supply Chain Roles

In the foreign trade supply chain and before the role of distributor, the goods are generally supplied directly from the manufacturer to the wholesaler, and then supplied by the wholesaler to the downstream retailer. Among them, wholesalers play a role of distribution of products and fast sales. After the emergence of distributors, manufacturers tend to supply goods to distributors at better discounts. Why is that? Manufacturers do marketing If the manufacturers do their own marketing, one way is to build their own sales team, but actually there is a big problem that they can radiate and contact with a narrow customer type. Because these distribution channels and customer resources need to be built on their own. Although manufacturers in the production and research and development focus on a lot of experience, in the marketing of this piece, the new sales team is difficult to get high results in a short period of time, or it will develop slowly. Another approach is to open branded stores in cities, such as apple. Like the way of opening direct store, which is more suitable for some strong brands. Because wanting to spread to each city, according to the number of cities, needs to open a number of direct-sale stores. The cost is very high for the rent, decoration, tax, personnel wages and so on. From the above analysis, it can be seen that some manufacturers cannot do marketing by themselves, and they will choose to cooperate with other commercial roles in the supply chain——distributors and wholesalers. They have a mature sales channel and network resources.The products are sold by distributors and wholesalers, so manufacturers can focus their main energy on production and research and development, and also reduce their own pressure and the risk of sales to achieve the way of division of labor and cooperation. Wholesalers and Distributors In the process of commodity circulation, in fact, wholesalers and distributors are an intermediate role between manufacturers' supply to retailers. They often appear as a pair of partners. Distributors help brands and manufacturers to do product sales, promotion, advertising and other marketing work, as well as storage functions. A wholesaler takes goods from an authorized distributor and supplies them to his downstream retail customers. Among them, because the wholesalers wants to wholesale a wide range of goods products, and they would like to be able to provide "one-stop" services to their downstream retailers. Its own product line is rich, including a wide range of products, and retailers can choose different products from them, finally, the wholesaler packages it to the retail customer. So wholesalers find many different manufacturers to buy and stock their products, and they have no particular incentive to promote a particular manufacturer's products, and are unlikely to provide ancillary services to the manufacturer. Moreover, the product profit margin is very thin, and there are many competitors in the market, so the wholesalers can only use the profit difference to promote the products of the manufacturers, so the wholesalers will not be so active to obtain orders, and they are more like the management operation of a logistics enterprise rather than the management operation of sales. Because wholesalers usually have a certain size of retail customers, the main model is to buy some good products and then recommend them to existing retailers. What he does every month is to manage the warehouse and then collect and execute the retailer's orders on a regular basis every month. Although wholesalers will do some marketing work, their enthusiasm is not high. In other words, the wholesaler itself is not controlled by the manufacturer. In fact, manufacturers prefer to have such a role that can help him to actively complete the marketing. Products can be spread to the city's large and small shops, which then can help him do after-sales service, such as delivery, returns and so on. As a result, the manufacturer sits with these wholesalers to find some of the demands that can meet the requirements and turn him into its own distributor, which is why authorized distributors appear in the supply chain. In contrast, distributors promote manufacturers' products and have their own professional sales team. And after becoming an exclusive distribution, you can get better discounts and exclusivity from manufacturers, and will have more incentive to push the manufacturer's products. How did a wholesaler become an authorized distributor? The evolution process In the modern supply chain channel, a part of the wholesaler will pay more attention to marketing and services, in which well-qualified suppliers began to turn into distributors. For example, when he used to be a wholesaler and when he entered a certain category in bulk, there might be five or six brands of the same kind. Because of different brands, prices are not the same. Middle and high end products and low class products are finally sold by the retailer customer group then delivered to the final consumer letting consumers choose according to their own consumption capacity. Gradually, he will find out which products require development and which brand owners have better profit margins and sales volume. He will also have some marketing awareness and brand awareness, and he will start to pay more attention to the products when he buys them. For example, this product only went into the most recognized brand in the market. That is to say, he will be turned into a distributor focusing on certain categories of products and communicating with more manufacturers and brand owners and each category at most 1 or 2 brand products. So, such wholesalers are turned into distributors, and then the manufacturers then find distributors that meet their requirements, and then these distributors are transformed into authorized distributors. This is the process by which a wholesaler gradually transforms into a distributor.

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