Distributors - An Alternative Route to Market
Glossary of Terms
There is much confusion over the definition of a Distributor. In the greeting card trade the following definitions apply:
Sales Agents: Sell on a commission basis - see Agents Section
Wholesalers: Stock cards from the volume wholesale publishers and sell via cash and carry outlets, van sales or reps.
Fulfilment Houses / Third Party Distribution: An external warehouse service which dispatches orders on behalf of and as advised by publishers.
Overseas Distributors: Provide the means of UK publishers exporting their ranges.
But this page is not about the above - it is about UK Distributors as we know them in the greeting card industry!
Many new publishers struggle to find sales agents and the difficulty of achieving a national network of agents can be a major stumbling block to the growth a greeting card company. Using a distributor, rather than agents, is another option for new publishers.
A distributor, using its own warehousing facility and network of sales agents across the UK, will take responsibility for the sales, marketing and distribution of card ranges leaving the publisher to concentrate on developing and producing its ranges.
How does it work?
Working with a distributor is a partnership, working to the strengths of both sides. For a distributor to want to work with you, you will need to fit in with their portfolio of ranges.
A distributor (usually) houses publishers’ stock in its warehouse and sells it on a consignment basis. The distributor sends a sales report to the publisher at the end of every month and the publisher then sends a sales invoice for this stock by return. The distributor then pays the publisher for what has been sold.
Using this method ensures that the distributor’s cash flow is always correct and that the publisher gets paid on time.
The potential advantages of using a distributor:
- Publishers can put all their time into design and production - their costs are therefore limited to design and production costs
- Retailers can buy from one strong source
- Strength of marketing alongside other leading ranges
- Association with top brands (with certain distributors)
- High profile at trade shows on the distributor’s stands
- A direct link into overseas distributors
- Because distributors are often also publishers, with their knowledge of production, they can often help publishers achieve better production costs.
- The following are some of the costs which can be saved by working with a distributor:
Warehouse Facility
Agents Commission
Postage
Bad Debt
Insurance
Telephone
Salaries
Accountancy
Carriage
Discounts
Trade Shows/ Motor, Travel & Hotel
Therefore the cost of using a distributor is comparable or can be less than employing agents and doing all the sales, marketing and distribution yourself.
As distributors also often offer a ‘pick and mix’ of services, publishers should contact individual distributors for the range of services offered.
For a list of greeting card distributors please contact Sharon Little.
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