Where will your distributor be in ten years?
There's a lot of speculation about the role the distributor will play in the next decade. Some in the industry say distributors will be less important in the future. Others state bluntly that computers will make distributors obsolete.
Distributors, however, are not waiting to see what the 21st Century will bring. They're paying close attention to trends and preparing their businesses to serve retailers and manufacturers even more efficiently.
Rather than seeing the death of distributors, John Fraim, of AcuSport, thinks those who utilize new information technologies will be much more aggressive and efficient in receiving orders from vendors and shipping orders to retailers.
"You're going see quicker service from distributors," Fraim said. "Pricing will be lower because of reduced overhead."
Rick Kinsey, of Kinsey's Archery Products, agrees.
"I think distributors play too key a role in the distribution chain to disappear," he said. "I don't see how computers could replace that role."
Kinsey says most manufacturers don't want to deal directly with retailers and would rather supply a few distributors and let them work with dealers.
"We play two roles," Kinsey said. "For existing accounts with dealers who have been into archery for a while and have a lot of knowledge, I serve as their warehouse. I supply them with products in the fastest possible way."
Kinsey is also an educator for dealers.
"I fill a great need for information, instruction and guidance for new dealers," he said. "They are not going to go to 50 or 60 manufacturers for products. They need one source, and they need someone who can help them."
Mike Saporito, of RSR, sees the function of distributors slightly differently.
"The role of the distributor is to furnish a benefit to manufacturers, so they don't have to service a large number of accounts," he said. "Rather than servicing 20,000 or 30,000 accounts, they only have to service 100 or so."
This means manufacturers do less bookkeeping, less warehousing of goods, have more efficient shipping, and fewer credit checks than they would if distributors were not in the chain.
So where is the distributor/retailer relationship going? Computers certainly will play an increasing role.
"Computers will make everyone more efficient and, hopefully, help everyone monitor inventory better so no one gets stuck with surplus," Kinsey said. "If anything, computers will increase the necessity for distributors by allowing inventory monitoring to be more accurate."
With computers, retailers will know exactly what they need to order, and when, so it's delivered "just in time." Ideally, products won't sit around gathering dust in the distribution chain.
Saporito says that the future role of distributors, even with computer technology, will not change much.
"All the computer does is speed up the transaction," he said. "Dealers will maintain their inventory electronically and automatically re-order replacements at night by computer. But I don't see major changes."
Saporito said many distributors, including RSR, already are able to handle the changes taking place in the distributor/dealer relationship.
"We're fully computerized, and our operations already are fairly efficient," he said. "We're on a barcode system that handles all our warehousing, shipping and billing. We're already working with some retailers to receive orders electronically and we have a web site where dealers can place orders."
The Internet, Saporito said, will be used to handle electronic orders. That will mean instantaneous ordering and a large reduction in long-distance calls between distributors and dealers.
"What the computer and Internet will do is enhance communication." Saporito said. "It will be easier for us to understand the trends as they are occurring, because they will be electronically recorded."
Saporito says the move to electronic ordering will not change the need for a person to use his judgment in the ordering process.
"The computer can tell you that 10 items were sold," he said, "but it can't tell you that those 10 items might have been a one-time sale. So the human factor still needs to be worked into the electronic solution."
At AcuSport, Fraim sees the role of distributors changing over the next 10 to 15 years.
"One of the changes is the information distributors have is becoming much greater," Fraim said.
He agrees that the Internet will play an important role in future relationships between distributors and retailers.
"We already have an Internet site, although we're not doing a lot on it yet," he said. "We're looking at how others are using the Internet in the distribution business."
AcuSport also uses a computer system for inventory tracking. A dealer, who has access to AcuSport, can log on and get a real-time screen of AcuSport's current inventory, and place an order. About 900 dealers currently use this service.
"One advantage of this system is it's open 24 hours a day, so dealers can order at anytime," Fraim said. "It's becoming a very effective tool for them." He expects this to become even more efficient when the system is moved to the Internet.
So, are distributors obsolete? Not according to the industry's distriburtors. In fact, they believe the opportunities for distributors will be be greater in the coming decades.
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|Title Annotation:||role of distributors in the future for the firearms industry|
|Date:||Feb 1, 1998|
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