We all know how technology is advancing and constantly changing. This goes the same for the distribution system too. New technologies keep bringing changes in how distribution works, which may at times lead to unexpected results. The distribution system comprises of producers, distributors and retailers, who are constantly competing for market share and looking to gain the biggest market share. Companies are coming up with innovative approaches to cover as much market share as possible. Some try to become an all-purpose intermediary while others want to excel in one particular segment. In order to understand the future of distribution, it is important to know about the latest and upcoming technologies that may roll out in the next few years and how they will impact the existing distribution system. Also, analyzing the history and understanding the present of distribution system will help to bring future developments into perspective. The distribution system can change overnight as technologies advance, and businesses that don’t adapt to these changes are left behind. Manufacturing takes time to change production lines, test new products and come up with new production. Although the needs of the customers change but, the basics remain the same. However, all this does not apply in the case of distribution. Processes including warehousing, shipping and selling can change rapidly.
History and present-day distribution systems
Distribution became widespread in the 1900s. Earlier, local manufacturing supplied to local markets directly or through local merchants. As production increased in mass, large manufacturing plants came up to bring out large volumes of products. However, they lacked specific markets. People who operated these plants included technical people, workers and investors. Salespersons were not involved in these processes and plants. This is when wholesalers filled the gap. Supply chains came up which included manufacturers that produced goods, wholesalers that supplied products to customers, and retailers who bought products and sold them to their customers. In the process, the producers received only a small percentage of the final price while the retailers received double the price of the product.
How Internet affected the distribution chain?
With the advancement of the Internet, many more models emerged where producers would finally be able to sell directly to consumers. These new models would help manufacturers receive a large share of the overall revenue. But however, it was the intermediaries who became stronger and manufacturers had to reduce costs because new distributors controlled the access to the market. With the improved technology and the Internet, the companies that existed in the distribution system along with newer ones took over a wide range of responsibilities in order to increase their hold on the market. Apart from these producers, there were many retailers who entered the system too.
The retail market today has become very profitable. Businesses having a large market segment and client base gain savings on the supply side from manufacturers and are able to also charge high prices from customers. Margins are large and extensive because these businesses have very much controlled the distribution mechanisms and the profits associated with them.
Whatever kind of distribution and product management you are looking for, whether you are a wholesale or retail business, you can tie up with Jayem Logistics and rest assured that your business is in the hands of the largest inventory management and distribution in India, which means it is in safe hands.