Distribution of Product

Linking all vertical segments is product distribution. At the present time, most distribution to existing ethnic and other specialty markets takes place as a direct sale from a producer (live animal), slaughter/processor (carcass or boxed) or through a network of jobbers. Many producers located near urban areas of the upper Midwest and far West report sales of live animals directly from the farm. Some producers supply and assist with slaughtering of individual animals for direct ethnic buyers. In some cases the animals are delivered for slaughter to local processing plants. This method of distribution is only suitable for the very small-scale market.

Some examples of small-scale integrated slaughter/processing and sales of carcass meat products exist successfully in the U.S. and Canada. Many of these operations are integrated to production, but some rely on local producers for live animal sales. Most have acquired packing and processing services by the purchase and restoration of existing small-scale locker plants in the immediate area of production.

These small-scale packer processors have a common set of strategies designed to offset higher cost slaughter/processing and distribution costs compared to the commodity channel. Some of those characteristics include:
  • Flexible (multi-species) slaughter
  • Flexible job description of most workers
  • Targeted customer segments (ethnic groups, ultra fresh, etc.)
  • Very high service
  • Catering to individual local demand for product/service combinations
  • Small order acceptability

Checklist 1
Finding Potential Distributor Partner

  • Ask the end users of your products what distributors they prefer to buy from.
  • Ask current distributors if they’re interested in expanding their territories or know of other distributors who might be available.
  • Find out what distributors your competitors are using.
  • Identify distributors of allied products.
  • Consult directories published by distributor associations. (Check your local public library for the Encyclopedia of Associations, published by Gale Research.)
  • Attend meetings and trade shows sponsored by industry associations.
  • Place ads in industry trade and association publications.
  • Post messages to news groups available on the Internet.

Checklist 2
Evaluating Potential Distributors

  • Financial stability — credit history, timeliness of payments, etc.
  • Sales and marketing capabilities — size of outside and inside sales force, ability to generate leads, selling skills, technical competence, etc.
  • Sales performance — past sales history for same or similar products.
  • Knowledge of the local market — ability to accurately forecast future sales and identify changes in customer needs and expectations.
  • Product mix — types of products carried, including competitive, supplementary and complimentary items.
  • Growth potential — capability of distributor to keep pace with any anticipated growth in the local market.
  • Inventory handling capabilities — warehouse space, ability to track turnover rates and other important statistics.
  • Technology capabilities — possession of and familiarity with the technology required to do business together most efficiently.
  • Management ability — viewpoint of distributor on human resources, planning, training, financial management, communication, etc.
  • Succession planning — arrangements in place to continue the distributorship in case of retirement or death of distributor principal.
  • Overall fit — how well your goals, operating philosophies and business practices mesh with those of the distributor.

 

Checklist 3
What to Expect from a Distributor

  • Maintenance of a well-qualified and well-trained sales force that is familiar with the manufacturer’s products and is skilled in demonstrating the advantages of those products to the customer.
  • Commitment of sufficient resources required for aggressive sales and marketing of the manufacturer’s products.
  • The best efforts to achieve market share and other sales goals in a specific geographical or other area of responsibility.
  • A commitment to stock recommended inventories of products based on the needs of the local market.
  • Prompt payment of all financial obligations.
  • Prompt communication with the manufacturer regarding changes in the local market and/or distributor’s own business (e.g., changes in management and other personnel, and/or operating policies).
  • A level of service that encourages long-term loyalty on the part of the customer toward the manufacturer and its products.
  • Physical facilities and technology necessary to consistently perform the above functions.