How to Choose a Good Distribution Partner for Your Business?

7/6/2023

How to Choose a Good Distribution Partner for Your Business?

Ask any business—from B2B eCommerce to B2C brands to D2C retail companies, and they will tell you how the right distribution partner could make a world of difference to your business’s distribution logistics and growth.

No matter how perfect your product is, it has (literally!) a long way to go before it contributes to your company's bottom line. An impeccable distribution network will ensure that your product has no problem efficiently reaching an untapped market. 

But, like it or not, figuring out how products will get from manufacturers to the point of sale can be a harrowing task without the help of a reliable distribution partner.

In this article, you’ll learn about what a distribution partner is, why they matter, and how to evaluate and find the right-fit distribution partner for your business.

What is a Distribution Partner?

A distribution partner is a third-party company or individual to which a business provides the authority of distributing its products to a wider market. 

In the most basic sense, distribution partners work to get a merchant’s products into the hands of the customers. They purchase non-competing product lines from various manufacturers, stock them in warehouses, ship them to different locations, and resell them to different retailers. To do so, distribution partners must enter a contractual agreement with the manufacturer and purchase the rights to distribute their products. 

Distribution partners can offer various services depending on the sales channel a business utilises. 

  • They get the products to wholesalers and retailers for B2B and retail distribution.
  • For eCommerce sales channels, they process, fulfil, and ship orders to end customers.
  • In multichannel distribution, they manage order fulfilment across multiple sales channels such as online stores, brick-and-mortar stores, social media platforms, and online marketplaces.

Why Work with Distribution Partners?

The answer is simple. The right distribution partner can deliver the right product to the right destination at the right price. 

Understandably, for a relatively small business, it might seem too manageable to outsource to a third party. 

But as the business grows, the distribution game can get notoriously chaotic. Plus, all the stakeholders in the distribution channel must ensure a steady flow of inventory and no surplus in the warehouse or store shelves. That’s when businesses need the expertise to make sophisticated decisions about product availability. 

For manufacturers, the value that distribution partners add is clear. It is beyond their capacity to reach customers directly to sell their products. The distribution partner does all the legwork on their behalf by providing access to a network of retailers. They market, resell and supply the original party’s inventory to retailers so they can sell it to the end customers.

That means, as a manufacturer, you do not have to approach hundreds of different stores. Rather, you have to negotiate a deal with a single distributor, and they will get your products placed in retail stores that buy from them. 

It’s an advantage for retailers too as distribution partners take off the burden of selecting products and dealing with dozens of manufacturers.  

So, much more than a logistic service that picks, packs, and ships products to retailers, a reliable distribution partnership can help businesses reap many benefits.

  • Boosts Sales

Someone closer to the consumer and who understands the local markets can best manage sales activities than someone sitting miles away in an office cabin. With their knowledge of local conditions, distribution partners help you spot the most effective stores to sell your products.

Plus, a well-known distribution partner enjoys a loyal following. They might as well have more brand awareness than your brand does. It enables them to increase your product visibility and drive more sales. 

  • Broader Reach 

If you care about taking your brand to a diversified or specialised market, a distribution partner is what you need. A well-connected distribution partner can get your inventory across the audiences you haven't been able to target before. 

  • Fast Shipping

Shipping inefficiency can be a business’s worst nightmare. Distribution partners ensure that you don’t have them. Being logistics experts, they optimise your supply chain and accelerate order fulfilment while reducing shipping costs. 

  • International Logistics Expertise 

Expert distribution partners are familiar with the countless facets of cross-border shipping. From import duties and tariffs to customs and regulations, they know exactly how to navigate the complexities of international shipping

  • Infrastructure and Resources

Distribution logistics can be overwhelming, especially for small businesses that lack the infrastructure required to maintain efficiency. But having an established distribution partner by your side, you gain access to top-notch fulfilment and distribution facilities. Moreover, it lets you take your eyes off the distribution and invest more time perfecting and marketing your products.

Things to Look For in a Distribution Partner

While earlier distribution partners were gauged primarily by their ability to pick, pack, and ship, the scenario has changed. These services are now considered essential but a given; the other factors separate the best from the rest. 

Reliability is the key, as your potential distribution partner handles a crucial aspect—distribution of your business. Besides that, the following criteria can help you choose the right distribution partner for your business. 

Sales and Marketing Intel 

A well-rounded distribution partner will have a well-qualified sales force with a proven sales history for the same or similar products. 

An effective distribution partner will not only have sufficient resources for aggressive sales and marketing, but they will also leverage them to support your growth in the new markets. 

Aside from that, you should also evaluate the prospective distribution partner’s competence in online marketing through different channels. Plus, the team should be familiar with the manufacturer’s products. 

Prompt Communication

Your distribution partner will be someone who always prioritises trust and transparency. This might mean you should look for a distribution partner who has excellent external and internal communication, responds promptly to your calls, or does not rely on legacy software and emails. 

The distribution partner should also be easily accessible in the event of unforeseen issues and collaborate instantaneously to work toward its resolution.

Industry Expertise

Generally speaking, all distribution partners buy, sell, and promote products in their local market. But not all of them approach it the same way. 

Especially for niche products, you’ll want a distribution partner who can differentiate themselves by industry. They should demonstrate expertise that can help your product outperform your competition. Hence, it is important to look for someone with the credentials to grow brands in your target market. 

Inventory Management and Logistics 

A successful distribution partner is not just recognised by its marketing potential. It must also have efficient fulfilment and logistics capabilities to ensure the business continues to run smoothly. Can the distribution partner offer sufficient warehousing space and equipment? Have they adopted digitisation and automation technology for warehouse and inventory management? You should be conscious of queries regarding inventory before handing off distribution to a third party.

How to Find a Distributor Partner for Your Product?

Several sources can help you find the right fit distribution partner:

  • If you are already working with a distribution partner, you can ask if they want to expand their distribution territories. They might also refer you to other distribution partners. 
  • Find out distribution partners for related products.

Attend trade shows organised by industry associations. It’s a great way to have an extended facetime with potential partners. Eventseye shows a comprehensive list of trade shows in different industries.

Trade shows in Australia 2023 - 2024

  • Web search for directories published by distributor associations.

Arnnet distributor directory

  • Find distribution partners by connecting with groups and forums on social media—Facebook, LinkedIn, etc. 
  • You can always fall back on Google by searching for relevant keywords, something like this: [Product name] distributors

Wrapping Up

With the right distribution partnership, businesses wanting to boost sales, enhance operational efficiency, and grow into new channels can achieve exceptional results. 

As you continue to search for distribution partners, there is no better time than now to explore PACK & SEND’s distribution logistics capabilities. Our omni channel fulfilment services and diverse shipping options offer the support you need to facilitate your company’s growth in the new markets. 

Our experts are just a click away to help you chalk out your winning distribution strategy.

Image Source: Eventseye, ARN Distributor Directory

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