Q. What is the best reason to use a wholesaler?

Lancaster: There are a lot of great reasons to partner with a wholesaler, but the reason that comes first to mind is managing inventory. The jan/san distributor’s largest investment in their business is usually its inventory investment. The difference between making money and not making money in this business is inventory turns.

Modern wholesalers serve as an extended warehouse for distributors, providing them access to numerous product lines from national suppliers. Distributors can also benefit from the wholesaler’s existing supply chain capabilities and standards, leading to more efficient inventory turns. For instance, wholesalers help distributors address delivery issues like the growing shortage of drivers. Wholesale consolidates suppliers and shipments to ensure more cost-effective operations and guarantees dependable drivers and delivery routes.

Moon: The obvious answer is capital. By working with a wholesaler, the distributor has access to a wider variety of products that they can sell in a time-driven market without having to tie up a lot of their own money. Even when buying direct from manufacturers is a possibility, wholesalers may still be able to get a better deal for the distributor through their volume relationships with vendors.

Schinner and Turner: Wholesalers are an extension of the manufacturers we represent. We give the distributor an opportunity to buy from 100 or more different manufacturers on a daily to weekly basis, helping them to expand their offering at competitive market pricing, turn their inventory faster, make more profits, and retain a better cash flow.

•    A pure wholesaler is your supplier and not your competitor as we have seen from the growing number of hybrid wholesalers that are entering the market place.
•    Broad product selection and mix including greater access to multiple brands and categories
•    Increased Inventory turns and better cash management
•    Prompt service with high fill rates
•    Marketing support
•    National coverage
•    Competitive pricing
•    Private label programs
•    Special orders with minimal turnaround time
•    Faster reaction and response time for their customers

Q. What is a benefit of wholesalers most distributors don’t know about?

Hilbert: A pure wholesaler or redistributor will never compete with distribution. The pure wholesaler does not sell to the distributor’s customers and in fact is a valued supplier not a competitor. A key factor is you can trust a pure wholesaler when you seek product and price support for a strategic piece of end user business. Also, a wholesaler can utilize their buying power and offer very competitive pricing versus buying direct from the manufacturer. Buying through a wholesaler versus direct from the mill does not require large minimum orders that uses valuable warehouse space. This eliminates sitting on excess inventory stock which in turn lowers the distributors “return on inventory investment.” In addition, the wholesaler offers a broad product selection which is crucial for distributors who utilize “just in time” inventory practices.

Lancaster: The competitive landscape is changing and more distributors are offering more products and categories. Strategically moving ahead, jan/san distributors need to expand their offering. Many distributors don’t realize that wholesalers may be the key to category expansion. As office product dealers, MRO distributors and large retailers quickly expand into jan/san, it’s critical for the jan/san distributors to do the same to remain competitive. Considering categories like breakroom supplies, safety supplies, office supplies and furniture (as well as others) is critical. Adding new products can be a daunting task for distributors logistically and financially.

Wholesale is a low-investment, low-risk way for distributors to grow product categories outside of jan/san and connect with new inventory and capabilities. For example, distributors may not be familiar with breakroom products like coffee and cups, but wholesalers are already established within these networks and can help distributors ease into category expansion and ensure competitiveness.

Moon: Wholesalers have (or at least should have) a great deal of information and insight about the market and the products they sell. Many distributors don’t ever think to ask the wholesaler what they think.

Schinner and Turner: The real benefits are based upon the needs of the distributor. Some of these benefits are:
• Broader offering for the distributor’s customers
• Opportunity to buy at competitive to direct pricing
• Ability to expand their product offering beyond their traditional offering without the huge risk
• Help with developing unique and private labels, specific to the distributor
• An additional tier of sales support beyond what a manufacturer would typically provide
• Some distributors also look for:
1. Logistics solution to augment their existing method of delivery
2. Marketing support
3. Sales training
4. Website development

previous page of this article:
Changing Roles In Redistribution
next page of this article:
Wholesalers Can Solve Distributors’ Challenges