Distributors, merchants, dealers are mainly characterized by two features. First, different from agents who take a commission, they buy stock for re-sale. Second, they are typically but not always chosen by the manufacturer to cover an exact geographical area or sector of the market. Typically, the distributor is a small company, perhaps with only one or two branches in different places. It may be confidentially owned and achieved by the proprietor, an ex-salesman who has chosen for a life of greater independence. Manage distributors is indeed a challenging part of the smooth functioning of the market.
The perfect environment for a distributor is a market with many small customers and where the level of sales service essential is high. The spread of customers is problematic and costly to reach with a directly employed sales force who are more suitable for dealing with a part number of large buyers. Distributors usually aim to win business on sales rather than technical service. Their stock of products means customers can have immediate delivery.
A difficult technical problem may require mentioning to the manufacturer. The distributor may hold simple repair work. Distributors are, therefore, a well-organized means of selling car parts to garages, tools to the industry, or mechanisms to electronic companies. They are unsuitable for selling complex manufacturing plants, processers, or castings. If distributors are not acting well, the manufacturer should ask if a sales force or agency could better assume their job. Distributors will never be proved successful if they are used as a cheap substitute to a sales force – they either fit the circumstances or do not. Many distributors make the blunder of increasing their product range to an uncontrollable level, resulting in the worsening of selling effort. This gives rise to the commonly voiced criticism of manufacturers that distributors are order takers and not order getters. The product range they carry may be bottomless and wide, with various items from high to low ranging values.
Set strict codes for merchandising. Contrary to the belief of some producers, distributors are quite ready to follow a tightly controlled formula for merchandising goods – as long as they know they work.
Assist with Marketing can make it easy. Marketers decide that everyone knows which has manuals to look in for a list of prospects, how to organize a direct mail campaign, and where to place ads. Providers are likely to be achieved by good salesmen and poor marketers. Any help the principal can provide in marketing the products will recover the relationship and help both parties vend more products.
Make the business worthwhile. The margin saves the manufacturer from capitalizing on cars, salesmen, depots, and luxuriously high stock levels. The margin he delivers should be sufficient to cover the distributor’s costs and provide a profit inducement.
Keep the distributor absorbed. Distributors are under constant heaviness to take on a new range or a new dealer. If it is decent, there will be many who want to steal it. The above steps can make the manage distributors easy and efficient for the smooth functioning of the market.
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