We're in the process of experimenting with this with a few of our products, not quite there yet, just a few more hoops to jump through (dealing with either getting UPC labels or figuring out how to list without). But, the intent is to start with a few wider-interest products we've been selling (i.e. the single port gigabit poe adapter we mentioned in a previous thread, and the 10A current shunts).
This is a perfect example of my opinions about distributors though: I'm willing to pay Amazon $30/month + 15% to bring me new business. This is with me drop shipping to the customers. For higher turn items, we will also probably have amazon do fulfillment for us. We're still working the details out (like the UPC issue above). But 15% is a good value for this in my mind. A bit higher than I would like to pay, but still 85% of something is better than 100% of nothing. Because we're being picky about what we list over there (at least initially), we will probably not end up with much of our existing business being pushed through amazon, so amazon is largely going to be new referral business for us. We haven't quite decided if we're going to charge a bit more at Amazon to help offset the 15% additional, but I think this is likely. By contrast, the distributors in this industry I've had conversations with want a lot more than 15%. They want to not pay me until 60-90 days after I drop ship to their customers (probably at my expense), and then they can't guarantee that they'll actually bring me new business, and they won't commit to doing any specific marketing of my products. They also want me to only sell at MSRP, and provide enough margin so they can undercut me with lower prices than what I currently sell. I understand the reason behind all of the above, but none of it really helps add to my bottom line. As a result, I do not yet have any distributors, and won't have any until one comes along with a win-win opportunity. At some point in the near future, I'll probably look at re-opening this dialog with several of them to see if something has changed (or if some that I haven't had discussions with yet might have a better offer). I want to be clear: I haven't had a detailed discussion about this with more than a couple of the distributors, so I can't vouch for all of them, but those were the terms for the couple who I have had this discussion with. Add to that the type of frustrations Chuck is having with distributors right now (and which started this thread), and I am sort of glad I haven't ended up down that path. On Tue, Dec 5, 2017 at 5:55 PM, Sterling Jacobson <[email protected]> wrote: > Have you tried Amazon for distribution? > > > > I have no idea how that works, but I do notice a large variety of odd > things now available via amazon, some with free 2-day shipping. > > > > Honestly, the distro model is dead except the large players like Amazon > now, and good riddance. > > > > At least Amazon can have some accountability and rating/feedback that > helps buyers etc. > > > > *From:* Af [mailto:[email protected]] *On Behalf Of *Forrest Christian > (List Account) > *Sent:* Tuesday, December 5, 2017 3:32 PM > *To:* af <[email protected]> > *Subject:* Re: [AFMUG] Jeff Evans query? > > > > I'm getting really sick of distributors asking me for a deep discount, > extended length net terms, and to drop ship all of their orders to their > customers. There's a reason why we haven't gone down this path. > > > > > > > > On Tue, Dec 5, 2017 at 1:05 PM, Steve Jones <[email protected]> > wrote: > > Distributors that dont maintain accurate web based on hand/out of stock > are the devils condom. I hate them. The only thing worse is the ones that > lie and you get an order in with a "drop ship from mfg" F those guys, they > take your money right quick, thats for sure > > > > On Tue, Dec 5, 2017 at 10:27 AM, <[email protected]> wrote: > > We offer dry storage, sequestered inventory and order fulfillment to all > distributors so they can stock at our warehouse, ship from our warehouse, > and keep from paying double freight (for the galvanized steel parts). Some > take advantage of this and some don't. > > -----Original Message----- From: [email protected] > Sent: Tuesday, December 5, 2017 9:26 AM > To: [email protected] > > > Subject: Re: [AFMUG] Jeff Evans query? > > We try, our restock level is approx equivalent to a 30 day inventory, but > we > are constantly having runs on one particular part or another and then when > a > distributor wants something dropped we don't have it and they attempt to > blame us. > > The main reason to use a two tier distribution network is so that the > distributors have inventory, not us. That is how they add value. > Otherwise > I would just sell direct. > > We build to forecast and to order but the channel that stocks is the > channel > that gets the sales. > > Some of our distributors are much better than than others with this. > > -----Original Message----- From: Matt Hoppes > Sent: Tuesday, December 5, 2017 9:22 AM > To: [email protected] > Subject: Re: [AFMUG] Jeff Evans query? > > Wouldn't this be on you to make sure you have proper stock levels to > absorb the 20-30 day time frames? > > I know there have been times when I've waited to get mounts because they > were drop shipping but "we didn't know when the supplier would have the > parts in". > > On 12/5/17 11:14 AM, [email protected] wrote: > > I got a note from a guy saying that Jeff Evans was looking for stock on > our tower mount products. > Some of our distributors stock, some don’t. We have most of the stuff on > our e-commerce site but it is MSRP. You get discounts from going to the > distributors. > Not sure if there was a specific product in question or not. I don’t have > visibility into the inventory levels of my distributors so I can never > answer as to what they may or may not have. If you hit me off list I can > give an opinion as to who may have them. > I will say this: those distributors that do stock sell much more than > those that don’t and expect us to drop ship for them. We may not always > have the stuff depending on production cycles. We have a huge unknown in > the cycle due to the galvanization. Sometimes the company that dips the > parts can turn them around in 2-3 days, other times it is 20 or 30 days. > > > > > > > > > > -- > > *Forrest Christian* *CEO, PacketFlux Technologies, Inc.* > > Tel: 406-449-3345 <(406)%20449-3345> | Address: 3577 Countryside Road, > Helena, MT 59602 > <https://maps.google.com/?q=3577+Countryside+Road,+Helena,+MT+59602&entry=gmail&source=g> > > [email protected] | http://www.packetflux.com > > <http://www.linkedin.com/in/fwchristian> <http://facebook.com/packetflux> > <http://twitter.com/@packetflux> > > -- *Forrest Christian* *CEO**, PacketFlux Technologies, Inc.* Tel: 406-449-3345 | Address: 3577 Countryside Road, Helena, MT 59602 [email protected] | http://www.packetflux.com <http://www.linkedin.com/in/fwchristian> <http://facebook.com/packetflux> <http://twitter.com/@packetflux>
