Why Do Manufacturers Use Distributors?
When we get packages we typically don’t think about the process that took place in order for that product to arrive at our house. We typically have a general idea of the process but I know I never stopped to ask why the process is the way it is. Wanting to know more, I did a little research, specifically on the relationship between manufacturers and distributors and this is what I found.
Why do manufacturers use distributors? At a high level, it allows manufacturers to sell large quantities at a time and receive payment quicker. Distributors benefit manufacturers by buying high volumes of products and storing them in warehouses until the end customer buys them. Without distributors, manufacturers would be responsible for doing this.
In addition to the benefits of storage and immediate purchases, distributors also provide an easier path to the consumer because they have established relationships with retailers. This allows them to get the product to the final customers hand quicker.
What do distributors want from manufacturers? Manufacturers serve the distributor as being the designer and producer, while the distributor has a better understanding of the customer. Having a responsive and flexible manufacturer is a great benefit to distributors. In addition to this, distributors want to have dependable manufacturers that are able to produce products and deliver valuable infomation in a timely manner.