Page 5 - UnderstandingJanSanRedistribution_flipbook
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Chapter 1: Why Use a Wholesaler?
Redistribution of Sanitary Maintenance Supply products has evolved to the point that most channel
manufacturers and distributors recognize its value. Many Jan-San distributors, both large and small,
purchase from wholesalers; and many manufacturers are taking advantage of the benefits offered by
wholesalers.
At the same time, there are many distributors and manufacturers who are not yet taking full advantage
of the benefits offered by wholesale redistributors. This chapter will help summarize the key reasons
for working through wholesalers.
Successful wholesalers have grown because they are uniquely positioned to provide great value to both
manufacturers and distributors.
To the Sanitary Supply manufacturer, a sound redistribution strategy will yield:
■ outsourced management of small, high-cost-to-serve customer orders
■ access to new customers who are otherwise difficult to reach and serve
■ reduced credit risk
■ simplified logistics
■ additional sales support
Jan-San distributors who source products from wholesalers likewise benefit from:
■ faster inventory turns
■ shorter lead times
■ more frequent deliveries
■ no minimums per manufacturer
■ enhanced service levels
■ improved fill-rate economics
■ the efficiency of one order, one delivery, and one invoice for multiple manufacturers
How Does Wholesaling Work?
To the uninitiated, redistribution via a wholesaler would appear to be an unnecessary “extra step” in
the Jan-San supply chain, shoehorned between manufacturers and their distributor customers. Other
manufacturers have a hard time differentiating redistribution from their forward warehousing or distribution
center network.
Perhaps it is easiest to grasp the role and value of redistribution by comparing it to Sanitary Supply
distribution itself:
If you think through the supply chain, there are good reasons why manufacturers don’t have direct selling
and shipping relationships with every customer who uses their products. To do so would require a colossal
increase in the scope of all of their operations. Imagine receiving, shipping, billing, and collecting on several
orders per week from tens of thousands of end-users – there is not a Sanitary Supply manufacturer who
could handle it. What’s more, there is not a Sanitary Supply end-user who would welcome this arrangement
with every manufacturer who supplies him. The Sanitary Supply distributor provides a clear value to both
the manufacturer and the end-user by consolidating a lot of small orders into a few large shipments;
wholesalers provide the same value, but one step back in the supply chain. Unlike a Sanitary Supply
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