How To Choose A Wholesale Distributor

Q. When choosing a wholesaler, what should a distributor look for, or what questions should they ask?

Moon: Beyond assuring that the wholesaler handles the lines they need, a distributor should make sure that the wholesaler can advise them on products they aren’t certain about. It will give them a tremendous advantage when they are building new business. They should also ask what resources the wholesaler can make available to the distributor beyond the price and delivery of products to help them grow.

Hilbert: The distributor should start by building a relationship and establishing a level of trust with the wholesaler. Other questions to ask include:
•    Industry experience: how many years has the wholesaler been in the business?
•    What is the wholesaler’s reputation in the industry?
•    Does the wholesaler also sell to the end-user or consumer? If the answer is yes then the wholesaler is a competitor to the distributor and is using the distributor to fill trucks to compete in the distributors market. Also, the distributor is contributing to the buying power of the hybrid wholesaler to be used against the distributor.
•    Product mix and product fulfillment.
•    Quality of sales, customer service, delivery.
•    Fill rates and lead times for special orders.
•    Is the wholesaler associated with distributor buying group affiliations?
•    Independent ownership.

Lancaster: From the distributor’s perspective, ask questions like:
•    What is the inventory position with selected markets and suppliers?
•    How frequently can they deliver?
•    Who are the key supplier partners?
•    What target markets do they have access to?
•    What other products do they currently stock that are similar to their own?
•    What type of field sales support is offered?
•    What marketing support can the wholesaler supply to support the distributors sales force and e-commerce strategy?

Selecting the wrong wholesaler can hurt a distributor’s ability to grow and expand into new markets, hindering their goals of remaining competitive in an increasingly crowded market.

Schinner and Turner: A distributor needs to understand the wholesaler’s operational capacity and their ability to service.
• Is the wholesaler acting as a business partner?
• What are their fill rates?
• Do they deliver on their own equipment or rely on outsourced trucking?
• Do they have resources like marketing, website development or sales training support available that will help me grow my business?
• Are there ways this wholesaler can help me differentiate myself in the marketplace?
• Will they customize solutions to help me grow and prosper?

The answers to these questions will help them determine how well the wholesaler can support them and their business model and what level of service they can come to expect.

Q. What differentiates one wholesaler from another?

Moon: In a word, people. When a wholesaler puts experienced people in the position of customer contact, both companies benefit. Those people understand the value of the wholesaler/distributor relationship and work to make it better. 

Hilbert: The wholesaler business is a relationship business. This goes for both sides of the equation; purchasing and selling.

For the distributor, the service level is what differentiates one wholesaler from another. The level of service must be high throughout the wholesaler entity. From sales to customer service to the warehouseman who picks and loads the order, down to the initial ambassadors of the business, the drivers who deliver the product. Other key service features for the distributor include product mix, breadth of line, days and number per week of deliveries, deliveries on the wholesaler’s own trucks, order today-receive tomorrow, fair minimum order amounts and special-order policies.

In order to be able to provide all the service features to the distributor, the wholesaler must also have a strong and positive relationship with their vendors. A strong relationship with vendors goes a long way into enhancing the service a wholesaler can provide to the distributor. 

Lancaster: Distributors should look for a wholesaler that not only gives them the power to quickly and easily source the products they need, but expand into entirely new categories, through one supplier, as well. In addition to a nationwide next-day fulfillment network, consider wholesalers that augment robust sourcing and logistics with a full suite of advanced sales, marketing and digital tools. This allows distributors to create an omnichannel strategy to compete online and offline and give buyers the experience they want.

Schinner and Turner: RJ Schinner is differentiated from other wholesalers in multiple ways. For RJ Schinner, understanding the changing and growing needs of our distributor partners, then making sure our capabilities match those needs, sets us apart. We will adapt to our distributor’s needs, versus expecting them to adapt to us. RJ Schinner highly values the person to person selling process. We provide 60+ field sales and sales management to create one-on-one conversations and develop an appropriate strategy for each RJ Schinner/Distributor partnership.

In the end, it all comes down to trust and relationships, whether it’s between manufacturer/wholesaler, or wholesaler/distributor, or distributor/end user – Everyone benefits when those partnerships are stronger.