Distribution

Distribution Overview

As manufacturers face even tougher competition on the market, the pressure to supply and deliver has intensified. Traditionally, distribution has been seen as regarding logistics wich deals with the next problem: how to get the product or service to the customer and also how to economically store and transport the products before they entering in the distribution chain. Usually there is a chain of intermediaries between the manufacturer and the consumer each of them passing the goods further untill they reach the consumer. These intermediaries are known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user or consumer. In order to select a certain distribution chain, the manufacturer must answer to following questions:

1. Should the product be sold through a retailer?

2. Should the product be distributed through wholesale?

3. Should multi-level marketing channels be used?

4. How long should the channel be (how many members)?

5. Where should the product or service be available?

6. When should the product or service be available?

7. Should distribution be exclusive, selective or intensive?

8. Who should control the channel (referred to as the channel captain)?

9. Should channel relationships be informal or contractual?

10. Should channel members share advertising (referred to as co-op ads)?

11. Should electronic methods of distribution be used?

12. Are there physical distribution and logistical issues to deal with?

13. What will it cost to keep an inventory of products on store shelves and in channel warehouses (referred to as filling the pipeline)?

The main supply channels are:

1. Selling direct, such as via mail order, Internet and telephone sales

2. Agents

3. Distributor (also called wholesaler)

4. Retailer (also called dealer or reseller)

As a producer of primes,varnishes, caustics, synthetic resins, dyes, glues and adhesives on a hand and furniture on the other hand, SC AXM PROD’93 SRL focused on the shortening of the distribution chain in order to reduce the cost of the products and also in order have only one intermediarie between them and the consumer.

Having as selling goods two different types of products such as furniture as one type and resynes, dyes etc as the second type the channels of distribution are different in order to maximise the efficinecy in supplying both types of products on the market.

Storage and transportation of products

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial areas of cities and towns. They come equipped with loading docks to load and unload trucks; or sometimes are loaded directly from railways, airports, or seaports. They also often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

Warehouse aspects

SC AXM PROD’93 have small warehouses near the production faclilities in order to store products for few time untill they are loaded and transported to the resselers or wholeselers. Usually the transportation of the goods is made by trucks which are the property of the resseler/wholesaler or the property of transportation companies which are contracted by the resseler/wholesaler.