The high costs directly impact the final price of a distributor, and may even negatively influence the quality of the service provided. They lead to a low margin, which implies the need to increase demand or prices in order to maintain profits and that is how competitiveness is lost. In this context, reducing costs is essential even for business survival.
Therefore, in this post, we will show some ways to reduce costs in the distribution of food for dogs and cats, however, without affecting the quality of the service provided. So, read on and learn how to increase your distributor’s competitiveness by lowering costs!
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Establish criteria for choosing suppliers
Having a good product to distribute is essential, however, although this is one of the main ones, it is not the only criterion for choosing suppliers.
It is necessary to take into account other factors such as prices, production and delivery capacity, ease of negotiation, the brand’s reputation in the market and, above all, the fit with the needs of its distributor’s customers.
Another important point that will be dealt with in more depth in the last topic, is the relationship with the manufacturer and the incentives offered by him, such as discounts, bonuses, funds and materials for marketing and advertising, in addition to the strength of the brand and product quality.
Know your team well
Having a lean, well-trained and motivated team is synonymous with productivity and high performance. For this reason, more important than having a large number of employees is having a fair and clear job and salary policy.
Benefits that guarantee better quality for team members, as well as the offer of specialized training in the employee’s area of activity are true guarantees of motivation and high performance.
The consequence of this is the elimination of redundant jobs, the reduction of errors and absenteeism. All of this has a direct impact on the reduction of unnecessary expenses, helping to reduce the distributor’s costs.
Define logistics processes well
When the processes are not well defined, the account can be much more expensive than the investment in its optimization. For example, through warehouse management software, which helps keep everything in order.
A well-organized logistical operation is able to save time, eliminating or simplifying the steps from the supplier’s departure to storage, inventory management and separation for forwarding products to your customer. But for that, it is necessary that your team has the right tools and processes.
Pay attention to transportation
Assessing the pros and cons of maintaining your own fleet or hiring a third party carrier is essential to lower costs. Several factors must be considered, such as the volume of cargo, the frequency of deliveries, the distances covered.
For example, if you chose to do online sales delivering throughout Brazil, probably the best option is to hire a carrier. However, if your customers focus exclusively on a particular region and you have a well-structured delivery schedule, a small fleet of your own may be the best solution in terms of costs.
In addition, when defining transportation, it is also necessary to have access to information such as cargo addressing, so that the best routes for delivery can be defined, for example. In this case, having the management software mentioned in the previous topic and a well-aligned team is essential so that there are no errors in the logistics planning that will directly impact transport costs.
Enjoy industry benefits
As in any other industry, dog and cat food stand out from the competition through commercial strategies, and this includes actions in conjunction with its distributors. In this context, to reduce the costs of your distributor, being aware of the benefits offered by manufacturers is also an excellent initiative. In the following topics, you will learn about the most common ones. Check out!
It is quite common for some products to sell more in certain seasons and regions, and in others, sales need certain incentives to happen. In this context, it is common for manufacturers to offer discounts as the degree of difficulty in selling increases in the market.
Bonuses for the sale of products with close maturity
Products close to the expiration date are also subject to manufacturers’ discounts and bonuses. Some even offer consignment contracts so that it is possible to return them in case they are not sold on time.
Advertising and marketing funds and incentives.
Another common industry practice is offering advertising funds and materials to facilitate the dissemination of products. It is not uncommon to find manufacturers with very attractive product launch promotions, for example.
Taking advantage of these opportunities offered by manufacturers is a great way to increase your distributor’s business volume, reducing operating costs. But it is necessary to pay attention to the communication channels used by them and always try to maintain a good relationship with the industry. In this way, your distributor will win the preference of suppliers too!
As you have seen, the reduction of costs in the distribution of food products for dogs and cats is much more than a means of achieving only a larger profit margin, but it is also, and mainly, a way of differentiating it from the competition in several ways.
Decreasing costs makes your differentiation strategy more flexible, allowing you to adopt from a price differential, to a differential par excellence in the quality of your services and products that you distribute, which generates an even greater profit margin. So, don’t waste any more time and start putting the tips you just read into practice right now!
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