Sales channels to reach your customers
Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.
If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.
If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.
Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.
Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?
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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.
Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.
The key terms of the supply relationship should be covered in a written contract. Key issues might include:
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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship
Business ideas, Marketing and sales , promotions and advertising ideas , articles
Contract Logistics RFQ Process
Contract Logistics RFQ Process
Outsourcing of core Logistics function of Warehousing is fast becoming popular not only for Multi National Companies with global operations but all organizations in medium and small sector too.
Outsourcing may fall into two categories. One category would be the flow through warehouses, merging and distribution centers that are but a consolidation points in the supply chain network. These can be managing finished goods or raw material supplies or even spare parts etc. The project size is relatively smaller and the warehouse is not expected to hold inventories beyond a few days.
The Second category of warehouses could be the larger distribution centers managing finished goods inventory and related operations in large scale, catering to exports or supplies to a region, continent or country level or inbound raw material warehouses managing JIT or VMI operations, in plant management, Plant FG operations, etc. These warehouse operations are critical in nature and are primarily categorized by the volume & value of inventory held, size of operations and its relative position and important in the supply chain network.
In the first case of a flow through consolidation center, the selection of a 3PL vendor is relatively simpler and the criteria lesser. In the second case the SCM managers of the Buyer and the procurement have to set up a project to float the RFP, invite bidders, evaluate the bidders, negotiate and award the contract.
RFQ should contain complete details of the said project to enable the 3PL to propose a solution and prepare a solution design document. The RFQ should contain at least the following details as minimum information:
Detailed explanation of the business requirements, service specifications coupled with details of the business process, IT Process and product, etc.
Project Scope should cover details of activities, volumes, IT infrastructure, interface requirements, report requirements etc.
List service level expected along with performance metrics for all operations of the warehouse
RFQ dates for vendor meets, presentations and submission of bids.
Project span including timelines for selection of a vendor, criteria, and process of selection, project implementation & Go Live.
Contract Period and Extensions
Pricing and Costing expectations, methodology & approach.
Legal and statutory compliance requirements.
Liability requirements including inventory liability, third party liability, and insurance.
Contract and agreement terms and draft of proposed contract
Any specific requirement of the buyer with regard to services or project etc.
Confidentiality agreements if any.
RFQ Process
RFQ document is normally prepared by the business function manager along with project lead and procurement leaders.
Once document is prepared and internal processes and approval are in place, the procurement issues the RFQ to either all vendors in the market or shortlisted vendors.
Post RFQ, the buyer invites all participants for Question and Answer session either in a face to face meeting or on mail. Normally all answers to the received questions are posted to all vendors participating to ensure fair chance for everyone.
The vendors can be allowed to meet and discuss the scope in detail or visit the proposed site to collect more details.
Buyer facilitates clarifications and discussions with all relevant internal business functional groups whenever required by the vendors to be able to give them better insight into the requirement.
On due date of the RFQ, vendors are required to submit detailed bid response document.
Short listing of vendors happens internally with participation from related functional teams and project leaders. Response documents are studied, graded and tabulated based on an evaluation of solution design, capability as well as pricing. Shortlisted vendors are given opportunity to present solution to the buyers team on selected dates.
Final selection happens after the vendor is selected internally and procurement further negotiates with the selected vendor and comes to agreeable terms and conditions.
Lastly, internal management approval is obtained from concerned, selected vendor is announced, and LOI is released to the selected vendor.
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