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 the Sales Agents section of this resource.
- Wholesalers: Stock cards from the volume wholesale publishers and sell via cash and carry outlets, van sales or reps. Wholesalers are also known as specialist distributors.
- Warehousing and Fulfilment Houses/Third Party Distribution: An external warehouse service which picks, packs and dispatches orders on behalf of and as advised by publishers.
- Overseas Distributors: Provide the route to market for export.
But this page is not about the above - it is about UK Distributors as we know them in the greeting card industry!
Unlike other industries in the UK, there are no big centralised distribution companies in the greeting card industry and this is not a common route to market now for publishers. It is more likely that a licensing arrangement would be agreed.
However, there are some UK publishers which also act as greeting card distributors, selling other publishers’ ranges via their network of sales agents. They take care of all the sales, marketing and distribution of another publishers cards, buying at around 50% of the usual trade price. These distributors look for ranges which complement their existing portfolio, leaving the publisher to concentrate on developing and producing its ranges.
How does it work?
For a distributor to want to work with you, you would need to fit in with their product portfolio.
A distributor (usually) houses publishers’ stock in its warehouse 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)
- A profile at trade shows on the distributor’s stand
- Because distributors are usually 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
- Trade Shows, 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.