How about a new game plan at your next trade show – fish out the distributors. Distributors are wholesale dealers who sell to other dealers. Some resellers wish to order through distribution as the distributor will often provide financing allowing resellers time to sell the items prior to having to pay for it. Some resellers use distributors since they have fewer phone calls to place orders, and distributors often will warehouse inventory and manage returns.

The benefit that wholesale distributors provide to vendors is warehousing and inventory balancing as some resellers may return items that other resellers will order. Distributors offer credit and collection for thousands of resellers. Distributors have an established customer base of resellers that will order product. Some distributors offer promotional programs to reach specific resellers as they know which ones are ordering competing or complimentary products and can help you target these accounts.

Their can be disadvantages working with a distributor as you may not know who is buying your product and you cannot establish as direct a relationship. Vendors will know who the national retailers are since you will in all probability work directly, but not the regionals and independents. In retail the nationals tend to take fifty percent and above of the distributor inventory, while the independents and internet sellers take the rest. The difference here is that they seldom require expensive co-op money, so for a vendor’s overall margin these independents and regionals are key.

Distributors require margin, which increases your final street price. The average margin that a distributor will tack on is five points–although this can vary significantly by software, accessories, and hardware. However they can bring you up to fifty percent of your business with fewer associated headaches. Take a look at your business plan – distributors may provide the boost you need to the next level.