As a brand or manufacturer, expanding your reach and increasing sales can be a difficult task. Sales is the lifeblood of any business. Entrepreneurs probably know this better than anyone else. This is necessary not only for success but also for survival, and we want to do whatever it takes to win new customers, enter new markets, and win new business. However, limited budgets often also limit the conducting of market research.
This is where appointing a distributor can make a big difference to small businesses. You can increase your sales without facing massive financial problems.
A distributor develops and deals with an organization of plausible retail outlets. When you approach a distributor, you are getting your product out to reach the mass market, expanding your customer exposure. While direct sales through your channels can be effective, appointing distributors can offer several benefits to help you achieve your business objectives.
For most entrepreneurs, it gets tough to reach every nook of the nation and this is why the distribution trend is to be continued from the prior times.
- INCREASED YOUR BRAND VISIBILITY:
Distributors are instrumental in increasing brand visibility for manufacturers and suppliers. Through their extensive distribution networks, distributors provide brands with access to a wider audience than they could reach on their own. They also offer marketing and promotional resources, sales support, data and insights, and brand reputation enhancement services. By leveraging these resources, brands can expand their distribution channels, reach new customers, increase sales, and enhance their reputation in the marketplace. Distributors’ established relationships with retailers and other businesses in the industry also help build trust and credibility with customers, further increasing brand visibility. In the abstract, distributors play a critical role in boosting brand visibility through their comprehensive suite of services.
- WIDER REACH / MARKET:
Distributor utilizes their established networks and relationships with retailers, wholesalers, and other businesses in their respective territories, distributors assist brands in expanding their reach. By appointing distributors, brands can access new markets and customers that they may not have been able to penetrate otherwise. Distributors also have local expertise, which enables them to provide valuable insights into the market and make informed decisions about sales and distribution strategies. This can help brands expand their reach, minimize costs, and increase brand visibility in new markets. Overall, appointing distributors can be a cost-effective and efficient way for brands to expand their distribution channels and reach wider audiences.
- COST-EFFECTIVE:
Appointing distributors can be a cost-effective way to expand your business. Instead of investing in setting up your own sales and distribution infrastructure, you can leverage the resources of your distributors to minimize costs and maximize profits. Distributors can be cost-effective for brands and manufacturers. Instead of investing in setting up their own sales and distribution infrastructure, brands can leverage the resources of their distributors to minimize costs and maximize profits. Distributors assume the risk of carrying inventory, managing logistics, and handling customer service inquiries, which can help brands avoid the costs and hassles associated with these activities. Additionally, distributors have established networks and relationships with retailers, wholesalers, and other businesses in their respective territories, which can help brands reach new markets and customers at a lower cost. Overall, appointing distributors can be a smart business decision for brands looking to expand their distribution channels while minimizing costs.
- DATA AND INSIGHTS:
Distributors have access to valuable data and insights about the marketplace, customer preferences, and industry trends. By appointing a distributor, brands can benefit from this information without having to invest in collecting it themselves. This can help brands make more informed decisions about product development, marketing strategies, and sales tactics.
Distributors play a crucial role in collecting data and insights that are vital to brands’ decision-making processes. They gather sales data from their customers, which provides insights into customer preferences, buying patterns, and demand for specific products. Market research is also conducted by distributors to gather information about the industry, competitors, and trends. Customer feedback is collected by distributors to understand customer satisfaction levels, areas for improvement, and opportunities for product innovation. Distributors attend industry events and trade shows to gather information about the latest trends, technologies, and innovations in the industry. Analytics tools are used by distributors to analyze sales data, customer feedback, and other data sources to identify trends, patterns, and insights that can help brands make more informed decisions about their products and distribution strategies. All these methods help distributors provide valuable information to brands that can help them make more informed decisions about their products and distribution strategies.
- CUSTOMER FEEDBACKS:
Distributors collect feedback from their customers about the products they distribute. This feedback helps brands understand customer satisfaction levels, areas for improvement, and opportunities for product innovation.
Distribution helps in taking customer feedback by providing a direct channel for customers to communicate their thoughts and opinions about the products they purchase. Distributors collect this feedback and share it with brands to inform product development, marketing strategies, and sales tactics. By addressing customer concerns and improving product offerings based on customer feedback, brands can increase customer satisfaction levels and loyalty.
CASE STUDY OF ASPEN PHARMACARE
One example of a company that benefited from appointing distributors is the South African pharmaceutical company, Aspen Pharmacare. In the early 2000s, Aspen’s sales were primarily limited to the South African market. The company recognized that to expand its reach and increase sales, it needed to appoint distributors in other African countries.
Aspen’s decision to appoint distributors was driven by several factors. Firstly, the company recognized that it did not have the resources or expertise to manage distribution operations in multiple countries. Appointing distributors would allow Aspen to leverage the local knowledge and networks of these partners to efficiently and effectively distribute its products in new markets.
Secondly, Aspen recognized that appointing distributors would enable it to access new customers and markets more quickly than if it attempted to establish a direct presence in these countries. Distributors already had established relationships with healthcare providers, pharmacies, and hospitals in their respective markets, which would facilitate the distribution and sale of Aspen’s products.
Thirdly, appointing distributors would enable Aspen to mitigate some of the risks associated with expanding into new markets. Distributors would be responsible for managing inventory, handling customer complaints, and ensuring timely delivery of products. This would reduce the financial and operational risks associated with managing these activities directly.
Aspen’s decision to appoint distributors proved successful. The company’s revenue grew from R3 billion ($225 million) in 2003 to R19 billion ($1.4 billion) in 2018, with international sales accounting for over half of its revenue by 2018. The company now has a presence in over 150 countries and has established partnerships with over 400 distributors worldwide.
In summary, Aspen’s decision to appoint distributors allowed the company to expand its reach into new markets more quickly, access new customers, mitigate risks associated with expansion, and ultimately derive significant revenue growth.