DKSH is a market expansion services group with focus on Asia. The company integrates international sourcing, marketing, sales, warehousing, logistics, and distribution and support of highly specialized products and services in Asia, Europe and the Americas. PCI magazine recently asked DKSH some questions regarding the unique role that international distributors play in the coatings industry.
What are the advantages of using a distributor?Distributors allow customers to focus on their core business – manufacturing chemicals. Most international distributors can offer a full range of services from logistics, customs clearance, warehousing, technical and customer support, quality assurance and regulatory compliance that many foreign suppliers cannot offer to potential customers. Distributors can have a broader pallette to work from relative to supply. In addition, distributors can source and bundle a number of materials from several suppliers into one shipment to the customer, saving on the number of orders, total freight, paperwork, etc.
International distributors can provide local market information with import knowledge. They allow the opportunity to test new products as well as harvest old products. International distributors allow the exporter to take advantage of a developed market as well as avoid commitments to an unexplored market. Unique international distributors, such as DKSH, offer the full range of market expansion services. DKSH is unique in that it has been entrenched in Asia for 140+ years and has 20,000+ employees overseas.
What benefits can distributors provide?Distributors are often perceived as an additional layer and cost for a product at no benefit to the customer. In short, distribution is third-party technical sales for the raw material supplier. Many of the raw material suppliers are not large enough to market and sell their products directly, so distributors bridge the gap. The major benefit of distribution is offering customers a wide variety of products from various raw material suppliers. Could you imagine if there were no distributors, and customers had to take sales calls from every raw material supplier? From an international perspective, distributors offer the same time zone (mostly), local language and market-specific trends and information versus their home country (for example, Japan). International distributors can bundle together unique raw materials sourced from around the globe and, many times, ship more efficiently to the customer, offering savings in freight.
What are the differences between domestic and international distributors?Domestic distributors:
· Represent primarily domestic suppliers;
· Tend to promote products regionally by geography;
· May have more limited sourcing options;
· Usually offer one-way service (product to customer);
· May have a limited view of the markets they serve, as they may only represent a handful of states;
· May have difficulty working through international logistics, sourcing, duties, language barriers, etc.
International distributors, like DKSH:
· Represent primarily foreign suppliers;
· Tend to promote products nationally/internationally by geography;
· Have greater latitude and selection of Principals to represent;
· Can balance regional supply by exchange rate, logistics, etc.
· Have dominant cultural influence to leverage international channel relationships;
· Can coordinate globally to offer the same customer the same product (from the same source), around the globe;
· Have global networking teams. This helps customers spot global trends and stay most current on global technology development;
· Can expand the raw material "toolbox" of the formulator;
· Offer outstanding global chemical search capabilities;
· Can offer two-way and a full range of market expansion services.
How is the current state of the economy affecting distributors?The economy affects everyone from the top of the pyramid (consumer) to the bottom (base raw material supplier), so distributors are not immune. Distributors sell across a wide variety of industries, so the more diversified the business is the easier it is to withstand the economic downturns and industry cycles. Distributors are currently suffering from higher fuel costs for marine, air, train and truck transportation due to the rise in oil prices. Raw materials are directly impacted by the cost of oil, but transportation is a secondary cost many customers tend to forget about on the purchasing side. Unique international distributors, like DKSH, offer a full range of market expansion services, which offer more value to our customers. In many cases, depending on the economy, we have the ability to focus more on sourcing for our overseas offices (something a domestic distributor can’t do).
For more information, contact DKSH NA at 410/385.1666 or e-mail firstname.lastname@example.org.