The Ultimate Guide for Grocery Distribution Strategy

When a product distribution company is expanding into new markets, they know that staying on top of their entire sales process is important to sealing the deal. But how can they succeed in their own sales process if they are not engaged in it each step of the way?

Grocery distribution is one critical step that companies often overlook when they opt for the most effective, cheapest, and easiest route rather than looking for a legitimate distribution strategy. In this article, we will unfold everything you need to know about grocery distribution, from various distribution channels to who matters in the industry. It will help you refine your own distribution strategy to achieve optimum results on the shelf.

What is Grocery Distribution by the Way?

Grocery distribution involves making a grocery product available for purchase by spreading it through the market. It involves transportation, packaging, and delivery. Distribution is a basic step to a company’s sales.  

On the other hand, a distributor is someone who buys products, stores them, and then sells them through a distribution channel. A distributor is working in between product manufacturers and retailers or consumers, which means they are working on behalf of a particular company instead of representing themselves. Usually, distributors take part in collaborative relationships with customers and manufacturers.

The right distributor improves a company’s exposure in the product market and can perform better in terms of increasing speed and efficiency. The distributor needs to implement the following strategies to boost sales. 

1. Understand Your Channels of Distribution

A distribution channel refers to the medium or way through which a business transaction occurs between a manufacturer and a consumer. In fact, it is the path that a transaction follows. Distributors are the middlemen or intermediaries that house and deliver products to producers to sell to retailers and the final consumer. These channels in most cases can be relatively easy or increasingly difficult.

In a nutshell, there are two channels: direct and indirect channels. In a direct channel, the manufacturer deals directly with the consumer. On the other hand, an indirect channel uses intermediaries in the sales flow.

2. Increase in Sales  

Identifying new cross-selling opportunities is one of the surest ways to increase revenue. Analysis of your customers’ purchase history will reveal which products customers should be buying but are not. For instance, you may find out that you have a customer who is consistently buying animal feed, but not the complementary condiments. Making a cross-selling offer to this customer is an effective way of increasing revenue.   

The most important, and yet often overlooked strategy for increasing sales is to adequately prepare for sales meetings. Sales reps often go into their sales meetings with a quick understanding of the customer’s needs in order to cut time constraints. But, a sales rep may have a little time to meet with the client to secure a new order. So, adequate preparation for the meeting is important. 

An accurate business intelligence solution provides instant access to correct information on a customer’s buying history faster. This way, your sales rep can go into a meeting with the right information on product suggestions and promotions that will meet your customer’s needs.

3. Give no Room for Dead Stock

Managing your inventory with greater accuracy will translate to critical cost-savings. Leaving your raw materials in the site for a very long time will increase the risk of becoming dead stock. A company that has a solution in place to control its inventory levels will make it easier for them to avoid a warehouse full of dead inventory.

A business intelligence solution enables you to access and control how much stock you have on hand and the quantity of each product. This capability enables food and beverage distributors to make informed decisions when managing different inventory. Complete transparency enables your company to evaluate each product’s lifecycle, abide by the safety regulations and boost your forecasting.

4. Improve Efficiencies

Increasing efficiency must be applicable to all departments for cost-savings. Reports, for instance, are usually generated by the IT department. Once a report is requested, it can take many days for IT to deliver it. Most of the time, the data is often out of date by the time the reporting processes are complete, including asking for further detail, rendering the report of little or no importance.

This usual reporting method provides a few actionable insights given the nature of static reports. However, business intelligence reports can be created and shared immediately. Insights collected from accurate and up-to-date data can save you money and increase revenue. Therefore, business intelligence can also be used as a tool to harmonize procedures and improve efficiency in other departments, too.

Put the Right Key in the Right Hole

With a lot of orders to fill and customers to attend to, having a data tracking system by your side will make your distributor’s hard work worthwhile. If there is a problem in the grocery distribution network, you are empowered to move over it with ease and maintain a steady presence on store shelves, keeping distributors and customers happy.