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5 Problems Suppliers Face With Their Distributors

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26/11/2019 Find out what problems suppliers face with their distributors and learn how to work around them.

As we’ve already established multiple times, the distributor is a very important part of the supply chain in the US. Without the distributor, your wines aren’t going to end up on retail shelves or in restaurants. However, let’s give the supplier some credit too. As a supplier, if you didn’t have wines to give to a distributor, then the distributor wouldn’t have anything to sell to their accounts either. So as important as the distributor is, the supplier is also very important.

As you might already know, business can’t always be unicorns and rainbows. Everyone faces problems, and so do suppliers. There are times where suppliers face major problems with their distributors, and things might get ugly.

However, it is very important to make sure that these problems don’t hinder the supplier-distributor relationship and work space. So if you’re a supplier, here is how you can deal with some of the problems you might face with your distributor. And if you’re a distributor, these are the problems you need to steer clear from.

1. Not getting paid on time

One of the major problems that suppliers face with their distributors is getting paid on time, especially with small and medium distributors. Most distributors only end up paying their suppliers when their products have moved. So if they have unsold inventory, then there are high chances of the suppliers not getting paid. The best way to avoid this is to start working with a distributor is to put down strict terms and conditions. Taking a guarantee from the distributor is also a good way to make sure your payments are made on time. So, you can take their credit card details for starters, to get you your paychecks on time.

2. Getting lost in a distributor’s portfolio

Everything might go well during your first supply. You’ll send out your cases, and the distributor will receive them - and they’re all stacked and ready to go. However, a lot of times, your product might get lost in a large portfolio. Distributors have a lot of wines in their portfolio, and they usually wait for the depletion report from the retailers, and unless and until the retailer is asking for your product, chances are that distributors aren’t going to take your product again. So what you need to focus on is depletion at retail.

Ask your distributor for a depletion at retail report. This means you’re going to ask the distributor about the top accounts selling your wines, and accounts that are not selling your products. Once you have this information, go ahead and try to deplete your stock at the retailer’s. You can have weekly store tastings which will give consumers and retailers a chance to taste your wine, which will in turn help you build a rapport with the retailer - who in the end will help in depleting your stock.

3. Communication

This is a very common problem that suppliers face with their distributors. A lot of times you might end up in a situation where you might stop receiving any communication from your distributors. This could either be because they might be too busy, or maybe your account isn’t as important for them. The best way to strengthen communication between you and your distributor is to give your distributor a call and communicate with them once again. Keep your communication lines clear, ask them about the business, and rebuild your rapport with them.

This is also a problem that distributors might face with their suppliers, amongst others. At times, even suppliers end up going MIA - so make sure you’re not one of those suppliers.

4. Distributors might not order a lot of inventory

So at times, distributors might not order a lot of inventory - but will expect suppliers to offer freit help, or a mix palate. So before this even comes up, it’s best for you to give them a deal where they can mix and match your palate from the beginning, so this way they will be ready to order more the next time.

5. Overall allowances

Your point of sales allowance, marketing allowance, sampling allowance might not be used properly by the distributor. You don’t know where it’s getting used and how it’s getting used. The best way to not meet with this problem is by asking your distributor for a report on how they are spending your allowances. So ask for an accurate report about how and where the allowances are being used, so you can keep a track of things, and your distributor will also know that you’re not here to play.

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