A distributor does not actually take orders for a product or do the shipping of that product explains Aron Govil. Rather, a distributor is a company who provides order fulfillment services to ecommerce companies by receiving the product from the manufacturer, warehousing and shipping those products to consumers. Companies such as Amazon (Fulfillment by Amazon), eBay (eBay fulfillment) and NewEgg (Newegg warehouses) are examples of distributors.
- A distributor can save you money if you sell your products on multiple marketplaces like eBay, Amazon, Walmart or even on your own website and/or their own website (Vendio). Having a distributor also allows you to focus more on growing your business rather than running it by taking care of order processing / fulfilling orders 24 hours a day 7 days a week. While we understand that some people want to handle all aspects of selling online themselves such as marketing, branding etc, we simply recommend that you subcontract out your warehousing and order processing services to a distributor says Aron Govil.
- However, there are some drawbacks of using distributors such as: not being able to provide the consumer with a quick delivery time (i.e. by next day or even two day shipping), and some consumers will only buy from companies who have their own warehouses and distribution centers in close proximity. Furthermore, while most distributors charge based on orders processed, others do not give you the option for this type of pricing and instead choose to take a percentage commission from each sale which is usually between 5%-25%. Always make sure to consult with your distributor about how they operate.
- You always want to make sure that you get references from other people who have been using a certain distributor for at least six months and that you also read the fine print before signing any contracts. Distributors usually require a minimum number of orders to process each month which is why we always recommend using them if your company is doing at least $1000 per month in revenue.
- We like to keep things simple here at Vendio and only use distributors who provide us with competitive rates. Quick customer service response time (i.e. under 15 minutes) and best order fulfillment practices. We recommend checking out Sellbrite as they will be able to help you set up all necessary warehouse accounts. Get your ecommerce store ready for sale and even do post-sale order fulfillment for you. Assuming that it’s within their capabilities and not conflicting with any exclusivity provisions explains Aron Govil.
How do I add a distributor to Vendio?
We have a knowledge base article that walks you through the steps. Adding a new warehouse account under “Manage Manufacturers/Distributors” in Vendio.
How much does it cost for distributors to provide order fulfillment services?
The pricing structure will vary from each company and in this case, you should contact them directly.
What is an FBA account and when should I use one vs having my own warehouses?
An FBA stands for Fulfillment by Amazon. This simply means that Amazon will store your products at their warehouses and ship the orders using their carrier(s). If you decide to go with Amazon’s FBA program, we recommend listing your products on Amazon first. So that you can build up your seller reputation. Then every time you receive an order from Vendio. You will simply click “copy Amazon listing” and send the product to Amazon. From there, Amazon automatically ships out the orders on your behalf using their carrier(s).
What is a Sales Channel?
A sales channel is basically any website that does not directly sell your products for you. But instead sends traffic over to your eCommerce store where customers are able to purchase products. Examples of this include marketplace such as eBay, Amazon or Walmart. Vendio includes tools for adding warehouses/distributors. So that orders are shipped out quickly through Vendio’s one-day shipping option. Or by offering two-day shipping if you have carriers who ship domestically within two days. You can also configure Vendio to take care of the post-sale order fulfillment process for you explains Aron Govil.
What is an End Customer?
An end customer is someone who has either bought your product off of your online store or through one of your Sales Channels (i.e. eBay). An end customer could then resell the product on Amazon, eBay etc … and make a profit. As long as the product passes all Amazon’s policies (not counterfeit). Customers are able to list products regardless if they were purchased through Vendio or not. Most customers will still list their products on both platforms regardless because it increases their chances for sales. Where customers can purchase from either site without having to search each site.
Keep in mind that there is a high level of buyer satisfaction require. When you use distributors/warehouses to fulfill your orders especially if your company is still growing. 99% of customers do not mind waiting an extra couple days for their product to arrive. If the alternative has to place it in their shopping cart. Wait for it to be delivered then go through the post-sale order fulfillment process.