When you buy an indomie product at a local store, an indomie product that was produced miles and miles away from your everyday local store; it usually involves a chain of distribution from a variety of sources. Getting a product to the market largely requires an effective marketing channel for companies that manufacture durable goods and other products, like your favourite indomie brand. A supply chain typically features various middlemen between the manufacturer and the consumer. A typical supply chain is made up of; the manufacturer, the distributor, the sub distributor/wholesaler, and then the retailers.
The difference between them involves several factors. So any entrepreneur out there who is considering going into indomie, dano, Kellogg’s, hypo, power oil, and minimie business should study the following article carefully to be able to determine the line that best suits you.
So to answer the question; what are the differences between a distributor, sub distributor and a retailer?
Who are distributors?
Distributors have a direct business relationship with the manufacturers that they represent. He/she is the manufacturer’s direct point of contact for prospective buyers of their products. Due to the very large amount of products that they deal in, distributors frequently work with sub distributors or wholesale representatives that will order for large quantities of the product.
A lot of distributors maintain exclusive buying agreements that will limit the number of participants or enable them to cover a particular region. A distributor serves to act as a link between the manufacturer and the sub distributor/wholesaler. The distributor is the person that helps the product manufacturer supply goods to the final consumer. In this way the distributor has a great role to play because they highly influence marketing and promotional activities. Hence, they buy goods in very large quantities.
Here are the quantity requirement to become a distributor for the following products:
- To become an indomie distributor, you will need to buy a minimum of 5000 cartons from indomie noodles producers
- To become a dano milk distributor, you will need a minimum of 3000 cartons
- As a hypo distributor, you have to buy 500 cartons minimum
- To become a Pringles distributor you will need a minimum of 3000 cartons
- For Kellogg’s you need to buy a minimum of 3000 cartons
- To become a minimize distributor you will need to buy a minimum of 1000 cartons
- For powerpasta, you will need 500 cartons
- You need to buy a minimum of 1000 cartons to become a power oil distributor.
To be a distributor; it is critical that you’ve already been exposed to the business, that is; have an extensive distribution background.
Product distributors are better described as partners rather than customers for a particular product manufacturer. And this is why distributors for many companies have exclusive rights. It is therefore true that to a large degree, both manufacturers and distributors benefit when they are in a mutually beneficial partnership. On the supply chain, the distributors earn more than sub distributors and the product retailers.
Who is a sub distributor?
Most people, because of the capital requirements and technicalities involved in becoming a product distributor, will often opt for sub distributorship business. This is very viable particularly for fast moving consumer goods such as; Kellogg’s, Indomie, Dano, Powerpasta, Minimize chin chin, Power oil, Hypo, Pringles etc.
But, who is a sub distributor and what is their job/business description?
A product sub distributor is also known as a wholesaler, and their business generally involves buying a large quantity of products directly from the product distributors. And most sub distributors will buy their goods at a profit margin of between N50 – N100 depending on the type of products you’re dealing in. The distributors will provide discounts for a certain number of items purchased or the total number spent on the merchandise. A sub distributor acts as a middleman between the distributor and a retailer; as distributors will generally not sell directly to retailers. And usually, sub distributors are not required to enter into any contract with the manufacturers, because unlike the distributors they can only supply to a more limited serving area, while distributors supply to a much larger region exclusively. Their major customers are the retailers and sometimes the consumers.
As a product Sub distributor, you have a key role to play in the supply chain as you get to buy goods in bulk from the product distributors and then resell in much smaller units to the retailers and sometimes to consumers directly. You get to obtain your products at a relatively lower price from the distributor and then sell them to retailers at a higher price. Hence the remaining amount is your profit. As a sub distributor you are not limited as to the products you can deal in, you have the liberty to offer products of competing brands to the retailers, provided by various manufacturers; unlike distributors who trade in non-competing goods and product line. You are also not expected to run promotional campaigns for your products, i.e, a product of an individual manufacturer; unlike the distributors who engage in promotional activities to increase sales of a particular product in the market.
Who is a retailer?
A retailer functions at the very end of the chain and majorly serves as a middleman between a product sub distributor and the final consumers. A retailer knows more about the consumers than every other entity on the supply chain. They are basically sellers who are at the end position of any business management system and who sell the products to the consumers. They are the ones who help the manufacturers to know more about the needs of the product consumers. A retailer will generally buy goods in smaller quantities from the wholesalers. They make use of smaller store outlets for their businesses, and make their profit from buying goods at a competitive price from the wholesaler and then selling to the consumers at a profit margin.
Was this article helpful?
If you wish to be a distributor, sub distributor, or a retailer for any of these products: Indomie, Kellogg’s, Minimie chin chin, Powerpasta, Power oil, Hypo, Dano, Pringles and many others. Contact; 08142688830 or send a direct mail to firstname.lastname@example.org