Value-Added-Distribution To Be The Way Ahead For Traditional Distributors
-Ciju Raj
Distribution is a channel for a company to reach its customers. A manufacturer or service provider cannot reach out to all its customers directly earlier so they go for different types of distributors. This was due to geographical constrain, market credit, and implementation process at the customer end.
Due to internet penetration in India, all product information and product comparisons are accessible to all. Traditional distributors were doing this as a service to the customers earlier. Now only market credit and installation are the value add given by distributors for most of the products. Emerging of e-commerce has reduced the importance of the majority of consumer product distributors, technology is bringing closer for the end customer and manufacturer or service providers. This trend will continue to increase and customers will have all options available.
This is when we need to move from just distribution to a value-added distribution. Whenever there is a change in market behavior only those distributors who will adapt to the value-added distribution will profitably survey. The customer will require Proof of concept for what he is about to purchase, it can be a product demo or some kind of service he wants to use, it is the distributor who supports on this requirement. Once delivery of product or services is over they would prefer a proper installation and training for the actual user. Once the product is in usage he might require periodic consumables or and services to the customer . This will help to engage with the customer during the full life cycle of the product and any future requirement or referral sales.
Whenever a value adds is given to the customer it will come with an additional margin to the distributor. The majority of the customer value for the service he gets and pricing will be the last thing any customer will look for against any value-added services.
(The author is a sales veteran having more than 2 decades of experience in Tech and FMCG products. Views are his own)