What does an distributor do?
Hi - What are the key things to be thinking about when starting a journey talking to distributors. Why would they carry my product and who finds the end customer? I've never spoke with distributors before, so am keen understand their thinking behind the products they take on. In my instance, the product is a small IT hardware gadget which would retail under $5. I'm based in England. thanks.
Best Answer
For certain products, food grocery items, computer chips, etc, distributors sit between the manufacturer and the end consumer. The distribute add a layer of complexity. They help the manufacturer with a service - distribution and guarantee and account payment. The manufacturers like it because they no longer has to deal with the hassel of receiving cash from many people. Distributors form channel, and channel account for 60% of the price of an item.
Other points
Distributor add little value, but a lot to the price.
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