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Distribution: A Long (Sometimes) Dark Bumpy Road
We are in the next phase of change with the closing of Associated Buyers & the expansion into Vermont of Rainforest Distribution based in New Jersey.
Change can be disruptive. This is
true in distribution where a fabric has been woven by food manufacturers
(vendors) & stores. Understanding that vendors provide products desired by stores, stores buy products to sell, & distributors work on the logistics of
getting the two connected. (This is a skeletal framework there is much more to say!)
When changes take place at the
distribution level there can be fraying both on the supply side (vendors) &
demand side (stores). Not all vendors or stores will agree to build a
relationship with the new distributor. It may be the cost to sell is too high,
or the vendor is required to "give" all their key accounts over to the distributor, or the trade allowances are too steep, & payments could be
too slow.
Stores require consistency. Buyers
are working to maintain stocked shelves. Right now, there are known to be very high out of stocks through Rainforest. An out of stock is
when an item is not available/in stock. Inventory management & customer relations software are tools to help buyers find a possible replacement before completing an order. Some buyers will not seek a replacement but indicate through store signage that a product is currently temporarily not available.
A store may forgo the new distributor
due to new higher minimums per order, lack of vendors they had been stocking, accounts payable & terms not in alignment with their cash flow. It may also be that the routes & deliveries are changed so much it can be hard for a store to shift to meet new distributor demands.
The connections between vendors,
distributors & stores are complex & changes add to the decision tree. Each
business is making individual decisions. there can be significant fallout or repercussions for both vendors & stores negatively impacting shoppers.
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