Functions of Distributors
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Functions of Distributors:
1. Transactional functions: are the functions responsible for “the activities associated with buying and selling of products, and risk bearing”. (Babylon, 2007) The Transactional functions that come under the responsibility of distributors are listed below:
-Buying and (Re)-Selling: This function enables the manufacturers to concentrate more on the other operational activities and processes, as the distributors eradicate the manufacturers necessity of introducing a new “distribution channel” for the sale of their products by themselves.(NCERT, 2011)
-Promotion: In order to resell the products to the retailers, distributors undertake promotional activities to raise product awareness, therefore, to build-up sales. In most cases, distributors and retailers are given grants and subsidies by the manufacturers, to ensure intense product promotion. (NCERT, 2011)
-Risk Bearing: Possession of goods, is etched with risk. Risk is mainly associated with the time factor. There is a probability of goods/inventory to deteriorate or become obsolete over time.(NCERT,2011)
2. Logistical Function: “Logistics is the function responsible for all aspects of the movement and storage of materials on their journey from original suppliers through to final customers” (Proof, 2007). The logistical functions that come under the responsibility of distributors are listed below:
-Warehousing and handling: Distributors sell the goods to retailers in various quantities. In order to satisfy its retailers, the distributors buy the goods or equipment from the producer in bulk. Some goods and equipment require special storage environment and place. Mostly distributors and retailers, store goods and equipment in warehouses and go-downs. (Baines, Fill & Page, 2011)
-Transportation and Delivery: Transportation is an integral aspect of logistical functions. This function is mainly carried out by the distributors. Nestles largest distributor, GAC Samudera, also manages the transportation of its products to the retailer. (Golden, 2007)
-Sorting and assorting: Product assembly and sorting are also managed by the distributors and wholesalers. The sorting and assortment ability of the distributor can also assist the retailer, in the effective display and promotion of the products. (Proof, 2007)
3. Facilitating Functions:
-Disseminating Information: The distributor reports, the current stimulations and changes in the demand of the product, to the manufacturer, due to its interaction with the retailers, who receive direct customer feedback. This would ensure the delivery of constant consumer feedback and suggestions, resulting in rapid product development. (SDSU, 2011)
-Financing: Distributors give credit