Diversifying Beyond Jan/San

Expanding product offerings and stepping into new markets can be daunting and expensive for an independent distributor. Thankfully, wholesalers are there to help distributors assess which product categories best fit their current business models and test expansion with as little investment of time, money and effort as possible.

Wholesalers say that when it comes to expanding into other product sectors, safety, foodservice, office supplies, and industrial product categories are natural extensions to a traditional jan/san distributor’s offerings.

“[These products] are a great fit for jan/san distributors as they are widely used across multiple customer types and are relatively easy to sell in terms of product knowledge and expertise,” says Mark Lyle, executive director of RDA Advantage, Littleton, Colorado. “In some cases it may be as simple as letting the customer know you have these products available and asking for the order.”

When more effort is needed to close the sale, wholesalers will be willing to provide assistance.

“Wholesalers are an extension of the supplier and can offer training, education, product expertise and point of sale materials so jan/san distributor sales reps are comfortable discussing and selling secondary product lines,” says Lyle.

Often, offering secondary product lines helps distributors gain footholds in new markets. For example, a potential customer may not be interested in cleaning products, but may be interested in safety or office supplies.

Having more entry points with an expanded product catalog increases the chance of addressing more customers’ needs. A robust catalog is appealing to most customers, especially since they have come to expect the convenience of one-stop shopping from their vendors. Having the ability to offer products outside of the jan/san market makes it easier to compete with large, national companies, e-tailers, and big-box stores.

“Wholesalers that carry a deep assortment of products across a wide breadth of categories can serve as a distributor’s ‘virtual warehouse.’ This enables distributors to become a convenient, one-stop shop for their customers,” says Bohannon. “By expanding their breadth of offerings, distributors earn a larger share of their customers’ business while they increase their profitability because they can generate additional revenue without having to invest in additional inventory or overhead.”

When working with wholesalers, distributors have the luxury of bringing in products that they need, when they need it. Buying products on an as-needed basis is particularly useful for secondary products purchased by end users, says Charles Moon, director of marketing communications at Sheppard Redistribution, Oaks, Pennsylvania.

As-needed access to secondary products also proves to be quite beneficial when testing out new products or markets. For example, instead of committing to purchasing a line of office supplies direct from a manufacturer, distributors can rely on wholesalers to supply this need without the risk of tying up a significant amount of capital in what could quickly turn into slow-moving inventory.

“Slow-moving items that are sitting in inventory for extended lengths of time is really just cash sitting on the shelf. Cash that instead could be re-invested into the business,” says Hauck.

Distributors have found it to be most beneficial to only stock fast-moving product lines in their warehouses and rely on wholesalers to hold slower moving or secondary items. Distributors can, however, still market their secondary products as if they have them in stock. This allows distributors to provide great customer service and at the same time keep their capital free.

Distributors then can rely on their wholesalers’ just-in-time delivery, a method for quickly delivering products to distributors when customers order them, or drop-ship programs. With drop-ship programs, wholesalers will deliver products directly to the end users’ doorsteps. By taking advantage of this option, distributors are able to guarantee products to their customers via next-day delivery without ever having to touch the products themselves.

“When a distributor needs a large amount of products to be shipped directly to the customer, we do accommodate those requests,” says Jeff Heeren, senior vice president of business development, RJ Schinner, Menomonee Falls, Wisconsin. “By not having to handle the products and getting the order to the customer on a timelier basis, this allows the distributor to make more profit.”