Distributors: An International Perspective

DKSH is a market expansion services group that focuses on Asia. In this article, the company answers questions about the role international distributors play in the chemicals industry.

DKSH is a market expansion services group that focuses 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. Here the company answers questions about the role international distributors play in the chemicals 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 range of services (such as logistics, customs clearance, warehousing, technical and customer support, quality assurance, and regulatory compliance) that many foreign suppliers cannot provide to potential customers. Distributors can have a broader palette 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 and harvest old products. International distributors allow the exporter to both take advantage of a developed market and avoid commitments to an unexplored market. International distributors such as DKSH offer a full range of market expansion services. DKSH stands apart from the rest because it has been entrenched in Asia for more than 140 years and has over 20,000 employees overseas.

What Benefits Can Distributors Provide?

Distributors are often perceived as an additional layer (and cost) for a product, one that brings no benefit to the customer. In short, distribution is sometimes seen as third-party technical sales for the raw-material supplier. Many of the suppliers are not large enough to market and sell their products directly, so distributors bridge the gap. The major benefit of distribution is the ability to offer customers a variety of products from various raw material suppliers.

From an international perspective, distributors offer the same time zone (mostly), local language, and market-specific trends and information as is found in their home country. International distributors can oftentimes bundle together raw materials sourced from around the globe and ship them more efficiently than their domestic counterparts.

What are the Differences Between Domestic and International Distributors?

Domestic distributors:

• Represent primarily domestic suppliers.
• Tend to promote products 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:

• Primarily represent 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, which help customers to spot global trends and stay current on global technology development.
• Can expand a formulator's raw materials “toolbox.”
• Offer outstanding global chemical search capabilities.
• Can offer two-way and a range of market expansion services.

How is the Current Economy Affecting Distributors?

The economy affects everyone from the top of the pyramid (consumer) to the bottom (base raw-material supplier); distributors are not immune. Distributors sell across a 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 that many customers tend to forget about when purchasing goods. International distributors like DKSH offer a range of market-expansion services that provide more value to their customers. In many cases, depending on the economy, they have the ability to focus more on sourcing for overseas offices, which is something a domestic distributor can't do.

For more information, phone (973) 810-5511 or e-mail info.us@dksh.com.

This article originally appeared in Paint & Coatings Industry magazine, www.pcimag.com.

Links

• Paint & Coatings Industry magazine