The Key to Success in Building a Distribution BusinessJuly 23, 2021
The key to success in building a distribution business, management, and corporate governance are important weapons to win the competition. Not a few businesses have been significantly affected by the ongoing pandemic. But on the other hand, there are also businesses that recycle profits because of this pandemic. One of them is the logistics business. When human activities are limited, the need for home delivery becomes very crucial. Not surprisingly, the number of shipments of goods during the pandemic skyrocketed. Not only secondary and tertiary goods, even basic necessities including fast-moving consumer goods (FMCG) are very commonly purchased with the concept of home delivery.
The above conditions also encourage the growth of new business fields such as distribution. The need for speed and ease of arrival of goods on time makes new distributors appear. The scale of the business also varies, ranging from small, medium-scale, or expansion of large companies.
However, business competition should still be the concern of every businessman. The development of management and corporate governance is an important weapon to win the competition. Check out some tips for building a distribution business
- Conducting Market Research and Analysis Periodically
It is very important to do a lot of market research as a basis for making decisions before and while running a business. Research is not always in the form of paperwork which is heavy, but more to the observation of competitors, customer needs to new challenges that must be faced. The market is an important factor because the existence of a market will determine the direction of the product to be distributed later. If the market is right, then the product will be distributed to the right target as well. If this happens, then the product turnover will be smooth and a smooth business as well.
Good use of data is also part of market research and analysis. Data is the basis for decision-makers.
- Determining the Right Distribution Chain
The right distribution chain is the most crucial point in distributing goods. The simpler the distribution chain, the more efficient the business will be. A long and convoluted distribution chain will increase costs and add to the management work. Basically, distributors are the first hands to distribute products from producers to retailers or final consumers. Margin is generally obtained from price discounts from producers to final consumers. The more types and quantities of products distributed, the higher the discount.
Distributors must purchase products, store products, classify products to transport products to the final retailer. Even distribution companies include parties that can convey information about all things related to products and carry out product promotions.
All of these capabilities are applied to form a product distribution chain. In the end, the distribution chain is a series of activities that will ultimately be related to the whole process of distributing goods. The distribution chain is also defined as the activity of moving and distributing goods or services from producers to consumers. The chain includes various things ranging from the type, price, quantity, and place needed. Of course, the distribution chain can be different in each location and type of goods, this is what requires the attention of distributors.
- Check Inventory Carefully
A good distributor must be able to guarantee the availability of stock in the warehouse, both in terms of quantity and quality. The existence of goods in the warehouse greatly determines the availability of market goods, which greatly determines the credibility of the brand. Delivery delays can make competitors’ products chosen by consumers, especially for fast-moving goods. On the other hand, the control of goods also involves the expiration date which greatly determines the quality of the product. delay in delivery that causes your item to expire. Create an inventory system with sufficient technology to find out the amount and need for goods in real-time.
- Monitoring Cash Flow
Financial management is basically a determinant of the success of any type of business. In the distribution business, this becomes very crucial because the payment system between distributors and retailers can be different for each product or manufacturer. Use of supporting technology It is very important that all invoices and receivables and other business obligations are complied with on time.
- Build a solid Salesforce.
It is undeniable that the sales force or sales force in the field is the cornerstone of the distribution of goods. They do not just bring goods to retail, but also build strategies and establish good relationships with retailers. The sales force is also required to be able to read market conditions, develop the market and make reports as the basis for making management decisions.
For this reason, the management of the sales force has always been an important element that management must concentrate on.
The sales force also needs to be supported by digital applications that make it free to move without being burdened by many complicated reports like other elements.