When Should You Change Distribution Partners?
Read time: 4 minutes
Today, I’ll be discussing the crucial topic of when and why you should consider changing distribution partner.
Understanding when to change is vital, especially in our industry. The right distributor should provide high-quality products, reliable delivery, and excellent customer service as a MINIMUM. So, sticking with one which isn’t, leads to inefficiencies, added cost, missed opportunities, and stagnated growth.
Okay, so it seems obvious. If the distributor isn’t performing, make a change.
But many businesses linger too long with unsuitable partners due to comfort, fear of change, or simply not recognising the signs that change is needed.
This inaction can cost dearly.
We will look at the following:
Spotting the Red Flags
The Impacts of a Bad Distributor
Reliability and Service
Evaluating TRUE Value
The right distributor is a partner for growth, not just a link in your supply chain. Recognising when to make a change is not just important; it’s essential for staying competitive and responsive in today’s dynamic markets.
Spotting Red Flags
Inconsistent Delivery Times: freight and haulage has seen some difficult times in the past few years, and there seems to be no let up. But predictability is crucial, particularly when we start to get into production planning, or managing COMAH levels. Which all leads nicely onto…
Poor Communication: delays and issues can be handled (to a certain extent), if everyone knows they exist. Early and often is my mantra with communication. It’s a partnership remember, so it should be a collaborative approach to solving the issue.
Quality Issues: I have slightly more empathy with distributors here. But if it’s something that crops up multiple times, then the distributor hasn’t got great partnerships on the back end, or good enough quality checks in place.
The Impacts of a Bad Distributor
Disruptions: delayed deliveries, incorrect packaging, out of spec. material, incorrect documentation, anything which impacts your ability to get the consignment, into your warehouse and use them.
Increased Costs: missed deadlines, underutilised production facilities and staff, short-term (often expensive) fixes, added complexity, not being compliant, I could go on.
Damage to Reputation: all ultimately leading to reputational damage. At the end of the day, these things have a knock-on effect to the next link in the chain, irrelevant where the issues started. Back to that communication point again.
It’s why I advocate choosing logistics service providers carefully, for example. Your customer service is only as good as theirs!
Reliability and Service
Everything we’ve discussed so far hopefully screams to you what a distributor should be providing as a MINIMUM:
A suitable, on-time, delivery track record
A responsive customer service
Proactive approach to problem solving
Every customer requires their own unique ‘add-ons’ - regulatory support, specific packaging, packaging recycling. And so, we start to build out the whole picture from this base line above.
Evaluating TRUE Value
Finally, how do we evaluate the true value of a distribution partner? Really important when making a change or striking up a new relationship.
How about these three considerations:
Cost vs Added Value: this is always tricky to write about as it’s different for every business. If a company knows regulations well, this is of no value. If they don’t know where to start, it’s invaluable. Discussing exactly what is needed and expected from the outset is paramount.
Strategic Partnership (Potential): distributors (even small ones ;o)) often have global links and are connected across multiple industries. Leverage this for market intelligence, expansion, supplier innovation etc.
Scalability and Flexibility: hints at a topic I intend to expand on in another newsletter: ‘what’s the difference between a ‘big’ distributor and a ‘small’ distributor’ - and which one should you choose to work with. Your distributor should scale with you, offering what you need, when you need it (within reason of course!). At the end of the day, as I always say, distributors are service providers.
So, there you have it.
We’ve covered:
Signs a distributor isn’t performing.
The effect that has on your business.
The absolute minimum they should offer.
What to consider in a new distributor.
Thanks for reading, and see you next week.
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