Table of Contents
The Role of the Distributor
Ask five different people to explain the relationship between distributors, manufacturers, and purchasing, and you will probably receive five very different answers. Are distributors so complex that they defy definition? No, it is simply that a distributor can be many different things to different people. Whether you are watching your favorite television rerun, shopping for a new car, or buying a gross of screws, you are probably interacting with a distributor. In a very general sense, unless you are buying direct from the factory, or a factory outlet store, you are buying from a distributor.
Distributors and Their Customers
As mentioned, a distributor must manage two major relationships: the relationship it has with its suppliers and the relationship it has with its customers. The distributor-manufacturer relation has been discussed, but what about customer relationships? See the box below for some of the advantages and disadvantages of purchasing from a distributor and a manufacturer.
Jim Nelles is an associate in the Chicago office of Mitchell Madison Group, a global management consulting firm. He has worked in the purchasing, procurement, and sourcing field for more than five years as a buyer, product manager, and consultant. Mr. Nelles has authored articles for Purchasing Today®magazine and other publications. In addition, he conducts seminars on implementing strategic supplier relationships in the field of MRO procurement. Mr. Nelles earned his MBA from the J.L. Kellogg Graduate School of Management at Northwestern University.
- Brack, K. "Consortium vs. Consolidators," Industrial Distribution, November 1998
- Brack, K. "Powerful Synergy," Industrial Distribution, February 1999
- Distribution Research & Education Foundation, Arthur Andersen, Facing the Forces of Change, Four Trends Reshaping Wholesale Distribution, Washington, D.C., 1998
- Fein, A. "The Future of Distributor Alliances," Modern Distribution Management, September 25, 1998
- Fraza, V. "A Wealth of Opportunity," Industrial Distribution, October 1998
- "The Future of Purchasing and Supply: A Five- and Ten-Year Forecast," NAPM and CAPS, 1998
- Graham, G. "Distributor-Manufacturer Integration: An Upscaled Version of Vendor-Managed Inventory," Modern Distribution Management, www.mdm.com
- Lawrence, B. "Supply Chain Strategies," Industrial Distribution, January 1999
- Lawrence, B. "Taking the Plunge," Industrial Distribution, February 1999
- Maltz, A., "Making the Most of Your Distributors," Praxis, The Center for Advanced Purchasing Studies, September 1998
- "Niche distributors: Adding Value Without Adding Costs," Distributor's and Wholesaler's Advisor, April 1998
- Pye, C. "The Changing Role of Distributors," Purchasing Today&Reg;, May 1998
- Srikonda, S. "Advice Worth Listening To," Industrial Distribution, February 1999
FOR FURTHER READING
- Thurm, S., "Caught in the Middle, Marshall Tries to Turn the Web Into an Ally," The Wall Street Journal, March 26, 1999
- Pelton, L.E., Strutton, D., and Lumpkin, J.R., Marketing Channels: A Relationship Management Approach, Irwin Publishing, 1997
- Curtis, D. and Etheride, J.D., "Integrated Supply Strategies," NAPM InfoEdge, December, 1998
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