Lamda Foundry

Business & Professional Services

Elements Of B2B Distribution

With the changing landscape of businesses over the past few years, the emergence of alternate selling models has evolved. Companies are now expanding their sales strategies from just having in house sales representatives, to reaching out to channel partners, distributers, wholesales and the like. This expansion not only gives the opportunity to the manufacturers to enhance their market presence but also sell more by selling differently. Essentially, entering the business-to-business (B2B) sales model is quite different from selling directly to customers in the business-to-consumer (B2C) space. The foremost difference between the two is the need to maintain a healthy business relationship between the purchaser and the seller. While in B2C business model, once the product is sold, barring the service assurance, it is not required to maintain an ongoing selling relationship with the end customer. However, partnering with another business to sell your own product demands sustainable relationship over the years to build an effective channel to sell through your distributors.

The two core players in a B2B distribution model are the manufacturers, who develop the products and wholesale distributors, who handle the shipping and delivery of the products to the retailers. They usually have a warehouse to handle the inventory and are an interface between the manufacturer and the retailer (or sometimes the customer, depending on the type of business they are engaged in).

One good advantage of having wholesale distributors in your supply chain is the local expertise they have about the market, which is not always available with the manufacturer. This knowledge can be well leveraged by the manufacturers to reach out to the customers in selling their products to the distributors. As a matter of fact, while employing distributors, they prefer having dedicated areas that they want to sell.

Another crucial element of a B2B model is the role of a supplier, who supplies goods and services to the consumer. The smooth functioning of supplier chain management is a decisive factor in the success of a manufacturing unit. Entailing sustained relationship with organizations (or individuals) who supply good to the organization is critical to realize the value addition they make to the supply chain and identify risks of failure. Managing logistics and delivery with the supplier and developing strategic business relationship with suppliers to achieve greater degree of innovation gives us the competitive advantage in the marketplace. A robust supplier management results in faster go-to-market and is mutually beneficial to both the supplier and the manufacturer. Procurement teams must always be up on their heels to identify risks and opportunities in the supply chain, and device the strategy accordingly.

The B2B market is certainly more complex than B2C, with products and services being delivered through a complicated network of partners and intermediaries, and continuous involvement with all the parties is a must in ensuring smooth business.

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