Interesting read from Print and Promo Marketing. Distributors buying direct offshore is a threat to the industry. Promotional products have long had a relationship of distributors partnering with domestic suppliers for both domestic and offshore orders. This partnership resulted in respect from suppliers to not sell directly to end users.
Distributors going direct offshore use the justification of price point and increased margin for larger sales to larger end users. Question, how would distributors feel about domestic suppliers working directly with their end users using the same rationale? Large and small orders. Don't think it will happen? Look at the sporting goods industry as a model with the larger brand name manufacturers working directly with leagues and then taking the order to local suppliers offering them the business at a low margin - basically saying if you want the business, we have it, and you can administer it for this margin.
Distributors using direct offshore purchasing should also consider that these same offshore manufacturers, sending them emails daily, are also sending emails to all the larger end-users. How do you prevent them from purchasing direct? No easy answer but I believe service and relationships are key. Same said for suppliers wanting to prevent distributors from buying direct.
Thoughts from my side
1. The distributors doing this are many times the larger ones. Time for suppliers to reward only the ones that bring them the large and small orders with special pricing (EQP). Buy direct lose your pricing advantage.
2. Suppliers should react with increased pricing to distributors reaching out last minute for large quantities to help when their offshore order has issues. All they are doing is taking almost 100% of the domestic inventory to solve their problem. This results in all other supplier customers frustrated having that product out of stock for months.
2. Industry associations like ASI, PPAI, PPPC, Sage, etc. need to be firm on a stance for this. What is their position for suppliers and distributors?
Lecturer , Marketing and Management, Bryant University
1moAll the best!