Distribution Research: It’s invented, it’s manufactured, and now it’s in a box waiting to be sent to a retailer. But what retailer, and how is it sent, and who do I call, and when, and why, and where?
How a product gets from a factory to a retailer is often one of the most mysterious parts of the product development process. I can tell you this…it’s not magic. But it can be magically broken down into two functional parts that may make it easier to understand.
Sales: We all know what sales are…that’s easy, take a product and get someone to exchange it for money – right! But in the product development world that happens two times for every product. The one we’re talking about here is when it happens between the Sales Representative and the retail buyer. Were also not talking about “A” product, we’re talking about tens of thousands, and sometimes hundreds of thousands of products in a single order.
So what research should you do?.....Start with the retailers that carry the category your product falls in. Make a list of those retailers and the category buyers. If you want to use a professional sales rep - research the reps that handle that category. Then contact them directly to see if they will take your product on. A note of caution….when dealing with reps be prepared to kiss a lot of frogs before you find your prince.
Fulfillment: This is the process of filling a retail order once the sales rep has made the sale. Fulfillment companies are like going to a salad bar, you can often select as much or as little as you like of their services. For anyone new to this industry, I recommend you let them do as much as possible. Some of the more common tasks a fulfillment company does are…
Factory orders and coordination
Letters of Credit
Importing and customs
Freight and warehousing
Order distribution into the retailer system
Funds collection and disbursement
When researching this area of the industry try to make sure you compare several fulfillment companies for both their services and the fees they apply to each service. Again, the more you know about the process when you walk in the door, the more respect you will get from them – and the less likely you will get ripped off.
