- Distribution structure
Your awareness of the distribution structure of your supplier is important and a
business should examine the following questions:
- What is the chain of distribution from the manufacturer to the dealer for
your product mix? - Has this changed over recent years and, if so, how has it changed?
- Will the method of distribution be the same five years from now?
If there is a change in distribution structure, how is it likely to affect your
business? - What is the growth trend of the product line in the market? Is it expanding
or declining? - Are there other questions that you need to ask?
Apply these questions to each supplier or kind of supplier.
- Local competition and product abundance
Before taking on a major product line, it is important to know the degree of the
participation in the market of the product. Some product lines may be very
widely distributed—they are considered a commodity.
It may be essential to your business to have such products in order to be seen as
a competitive source of supply in your market. In that event, it is important to
look for other product lines that will differentiate your business from others in
the market.