TWICE: Has the economic downturn made retailers more interested in distribution?
Tim Coakley, DBL: The economic downturn has pushed independent retailers to rely more heavily on distribution than before. With our “one or one hundred” and “no minimum order” policies, we offer a large cost savings for most independent retailers today.
They can compete with big-box retailers by stocking their shelves wide, not deep. Once they turn their inventory, they can purchase more. This purchasing method reduces their overhead and still infuses a large assortment of product.
Mike Cost, Brightstar: There has been increased interest in Brightstar’s value-added services like supply chain management. As cash flow becomes even more critical, retailers are more interested in services like smart inventory replenishment, virtual warehousing and product lifecycle management that can help them keep cash on their books.
With operating expenses becoming tighter for retailers, they are looking to consolidate their vendor relationship touchpoints, which has generated an increased interest in distribution.
Jonathan Elster, SED: Yes, for two reason. First, we are seeing the manufacturers raise the bar for buying direct and adding in additional fees. Second, dealers are looking to buy less, but more often, which is difficult to do with manufacturers directly.
SED makes it easy for dealers to consolidate their purchases. That is at the core of why we exist: to make it easier for dealers to purchase and manage their inventories.
Steve Honig, Volutone: Many manufacturers have increased the minimums to retain a direct status, and this steers many retailers to distribution. Now retailers can purchase smaller quantities with “just-in-time” fulfillment opportunities that distribution offers.
It’s a win-win for both the retailer and the distributor.
Ray Navarette, ArchBrook Laguna: Yes, some retailers realize that the levels of service provided by a good distributor helps their inventory management, which during these times is as important as price. Distribution is also playing a key role in connecting vendors, retailers and manufacturers to ensure that the customer is serviced appropriately.
As a result, we’re really trying to help our partners, by offering products and services that differentiate, build strong brand loyalty and create recurring sales.
Brett Neiderman, Edge: Absolutely. Distributors provide extensive product knowledge, flexible payment terms, and access to products “just in time,” making them a great solution in these economic times.
Dealers and integrators don’t necessarily have the luxury of putting together freight-qualified orders every time they need to order a product, nor do they have the ability to carry excess inventory or tie up valuable credit lines on unsold inventory. More jobs are being specified JIT, or experience last-minute changes. Distributors provide a great solution, providing same-day pick-up and will-call options, as well as drop-shipments directly to job sites.
John Soumbasakis, AVAD: Typically, the largest asset a retailer has is their inventory. If they are struggling with bank lines, inventory is the asset that’s most readily available to generate cash.
A distributor such as AVAD can give them quick access to the best brands the same day so we become the dealers’ warehouse. We can also supply them with a wider selection of the models that they don’t normally stock. Instead of switching a customer or discounting an in-stock model, they can pick up the model they need the day of the delivery and pay us in 20 to 30 days.
It gives the independent and regional retailer the tool they need to compete with the big box and national retailers.
Bill Stewart, Petra: I think retailers realize that Petra can provide a lot of services that take the burden off of them. We help them manage their profits and cash flow by offering flexible payment terms that range from COD to floor plan.
With our no minimum order, same-day shipping and 99.8 percent order fill rate, retailers can have better inventory control without incurring a lot of extra expense. Petra offers more than 20,000 products from more than 400 well-known brand names, so retailers can get everything in one stop.
We offer free-freight programs and unbeatable prices to keep retailers competitive in a tough industry.
Fred Towns, New Age: New Age has always been a viable second source for retailers. With manufacturers being tight with supply, retailers have taken advantage of filling some gaps through distribution. New Age manages its business off of an aggressive forecast model. With forecast trends showing a bit heavy, New Age has had the flexibility to shift products within its 12 retail channels and meet the demands of retailers looking for unplanned product.