Changing Roles In Redistribution

Ever since their introduction in the 1970s, wholesalers have been helping distributors maximize their potential. From ordering without minimums to access to non-jan/san products, wholesalers act as an extension of a distributor’s warehouse.

Much has changed in market during the past 40 years and distributors may not understand why they should utilize this partner. Sanitary Maintenance reached out to wholesalers to discuss their important role in the supply chain. Participating in this roundtable are:

• Ken Schinner, president, and Kathryn Turner, marketing, RJ Schinner, Menomonee Falls, Wisconsin
• Fred Hilbert, executive vice president, Huff United, Boothwyn, Pennsylvania
• Jeff Lancaster, director of value of wholesale, Essendant, Deerfield, Illinois
• Charles Moon, director of marketing and communications, Sheppard Redistribution, Oaks, Pennsylvania

Q. How has the role of the wholesaler changed in the last five years?

Schinner and Turner: Overall, the pace of our business has changed the role of a wholesaler in the last five years. There is a strong need for wholesalers to be prepared to deal with this, as business happens at a quicker rate. The increasing influence of e-commerce has also changed the way a wholesaler goes to market, creating a higher demand for merchandising content for customer websites.

Hilbert: Before I respond, I would like to clarify the meaning of wholesaler from the view point of (wholesaler group) RDA Advantage. In our channel of distribution, we consider a wholesaler to be a seller of product to the distribution level of the channel. In other words, a wholesaler is a redistributor and sells only to distribution and not the end user. Over the last five years, the distributors are finding it more difficult to compete due to the changing buying habits of consumers and the increased usage of the internet for purchasing. That is why the role of the wholesaler is becoming more important to the distributor. Distributors are looking for quicker turns and better costs to compete with the online marketing. The wholesaler can offer a multitude of products at a competitive cost so the distributor can service the end user and continue to be a viable source of supply.

Lancaster: Jan/san distribution has experienced a paradigm shift in the past five to 10 years when it comes to wholesale distribution. The traditional approach to wholesale has shifted to an innovative one. It was originally about becoming the low-cost leader through direct sourcing; then companies viewed wholesalers as being not as economical as they were only looking at the cost of the product. Under this approach the inventory investment is significant, and you also sacrifice on speed to market. As the competitive landscape has changed, jan/san distributors have shifted to an innovative approach — a sourcing strategy on economies of efficiency and scale. The strategy and decision to leverage wholesale now includes the opportunity to leverage and improve working capital while improving their speed to market.

As distributors’ margins increasingly tighten, decision makers must develop strategies that adapt to market forces and boost profitability. Fortunately for distributors, wholesale offers an accessible, price-conscious opportunity to reimagine supply chain operations.

Moon: I think more than ever, distributors are partnering with wholesalers rather than simply using them as a supply source. This makes the relationship between wholesaler and distributor closer, more interdependent and ultimately more beneficial to both.

next page of this article:
Advantages Of Using A Jan/san Wholesaler