Italian spaghetti, Swiss cheese, Georgian wine, Canadian maple syrup – not all of the overseas products that we enjoy eating with pleasure. These goods, as well as products of domestic manufacturers, are brought to the nearest store thanks to special market participants – distributors . They maintain direct relationships with manufacturers . For subsequent sale, the distributor maintains a warehouse, organizes and is responsible for the promotion of goods, builds a pricing policy.
Choosing a distributor: criteria
Market research suggests that the choice of distributor depends on the following criteria:
1. Distributor reliability.
2. The credibility of the company that distributes the product.
3. The speed and flexibility of the distributor.
When choosing an intermediary, you should know exactly who he or she is targeting his business: retail or manufacturer. There are two types of distributors: those who are oriented towards the manufacturer and those for whom the retail acts as a customer.
Model One: Vendor-Specific Distributors
In the first way a distributor works, the manufacturer is the customer and the retailer is the partner . The distributor’s orientation towards brand development looks like this:
In this case, the manufacturer orders from the distributor services to promote the brand through certain sales channels. And with retail, the distributor agrees the terms of cooperation, which are included in the product promotion program.
Second model: retail-oriented distributors
In this method of organizing deliveries, retail for a distributor is a customer, to whom he focuses and adapts to him:
This model works by the law of an intermediary:
Distributors who provide all services from purchasing products to developing and conducting promotional activities are worth their weight in gold from manufacturers.
Analysis of distributors in Ukraine shows that 75% of manufacturing companies answering the question “how to choose a distributor?” first of all, they conduct a research of the distribution services market, choosing the most reliable sales companies. The most reputable distribution companies are also popular with manufacturers. The reliability and credibility of the distributor wins the competition in terms of speed and flexibility in the provision of distribution services.
Distributors of Ukraine: realities
Modern foreign and Ukrainian distributors are systems with many variables and a developed logistics infrastructure, who know how to quickly and reliably deliver goods to the end consumer. In the modern world, all manufacturers of goods, without exception, understand the importance of distribution and its impact on sales, which means the question “how to choose a good distributor?” becomes relevant.
The TradeMasterGroup experts have compiled a rating of the best companies that mediate in the FMCG (fast moving consumer goods) market . The top ten includes the following companies:
Teddis Ukraine is the main supplier of tobacco products. Perhaps that is why the company is included in the 500 largest companies in Central and Eastern Europe. And in addition to the 330 million fine, the company paid as much as UAH 1.5 billion in taxes in 2016.
Myronivsky Hliboproduct is familiar to everyone thanks to Nasha Ryaba, Legko and Baschinsky. The company produces and supplies meat products to wholesale and retail outlets for sale.
JT International Ukraine (J.T. International) – European division of Japan Tobacco Inc. Official distributor of such brands of cigarettes produced by the company itself:
Imperial Tobacco Ukraine (Imperial Tobacco Ukraine) is one of the largest manufacturers of tobacco products, the following cigarettes are supplied to the Ukrainian consumer:
Procter & Gamble Ukraine (P&G Ukraine) not only manufactures, but also supplies its products to points of sale. But the largest official distributors of the company’s products are STV and SavService.
Philip Morris International was recognized as the best employer in Ukraine and Europe according to the International Institute of Employers. The main brands of cigarettes supplied by LLC “Philip Morris Sales and Distribution” :
Bayadera Logistics supplies alcoholic beverages to more than 45 countries, and the Bayadera Group unites distribution companies and three own manufacturing firms.
Savserv (SavServe) – a supplier of animal feed and household chemicals, also produces its own products prOK, Siela and imports Pringles, Toblerone, Cleanic, Lambe, Tchibo.
Eastern Beverage Trading (Eastern Beverage Trading) has trademarks such as Medoff, Arctica, Natural Collection, Our Mark, Rodnaya Rosa, Murnaya, LONGmixER, which it supplies not only to stores in Ukraine, but and to retail outlets around the world.
Distributors of Ukraine: who should they give to sell their goods?
Vsesvit Group of Companie
The most successful company that has been on the market for about 20 years and is engaged in the promotion and distribution of goods. Vseswit is engaged in the supply of food and household goods. The company knows who to sell the product to in Ukraine: there are such retailers among its clients:
DDS
DDS directly and through intermediaries covers about 30 thousand retail outlets of various sizes , which makes it possible to take a confident second place in the list. The company supplies the following alcoholic beverages:
Privat Business
The company supplies dairy products (yogurt, dessert, cottage cheese, curd mass, etc., groceries (canned food, preserves, snacks) and coffee (coffee instant, cappuccino, coffee drinks) . Privat Business can boast of a confident third place, thanks to its maximum presence in local retail chains, wholesale and retail outlets, restaurants, cafes:
Grand Distribution
The Grand Distribution Company supplies food products, household goods, household chemicals and cosmetics . The company operates in 11 regions of Ukraine, covering more than 34,000 active points of sale in all market segments. The company supplies goods from such brands: Conti, Biola, Lukas, Nutricia, Unilever, Ahmad tea, Torchin product, Bella, Johnson & johnson, ATB outlets, proStore, Amstor, Brusnichka, Fozzy, Absolut, Obzhora, Epicenter.
Agrobud Trade
Agrobud Trade supplies canned food, confectionery, frozen food , groceries, fruits and vegetables, coffee drinks and tea, dairy and products, meat products cheeses from such brands as “Sea World”, “Kinto”, “Darsil”, “Nalivaiko”, “Pervak”, “Getman”, “Polelya” and others.
Pilsner-Ukraine
The company distributes alcoholic and non-alcoholic beverages from the Czech Republic, Germany, England, Belgium, Georgia, France, Austria : “Budweiser Budvar” , Natakhtari, Prazacka, Cernovar, LondonPride, Bakalar, Samson 1795, Krombacher Hollandia, Desperados, Organic HoneyDew, Fischer, Black Cab Stout “,” Organic Honey Dew “,” Asterie Blanche “.
Palma Group Companies
The company distributes medicines, dietary supplements , medical cosmetics , feed additives, construction chemicals , for the oil and fat and confectionery industry, as well as household chemicals, cosmetics and perfumery : Damco, Hipp, Ashland, Bayer, Farmak.
Tedis-Ukraine: scandal with tobacco flavor
International companies producing tobacco products sent their products to Ukraine mainly through Tedis:
Thanks to this, the pricing policy on the tobacco market completely depended on the wishes of the company. But this abuse of monopoly position had a result: at the end of 2016, the Antimonopoly Committee fined Tedis ₴ 431 million. did not stop and on March 31, 2017, already with accusations of tax evasion and financing of terrorism (DPR and LPR, and the trail led them to the citizen of the Russian Federation Kesaev). AMK also got under a hot hand, but escaped with a slight fright. And Tedis is now in the process of changing beneficiaries.
Drug Distributors
The most largest distributors of Ukraine in terms of the supply of medicines to pharmacies :
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BaDM has existed on the market for over 20 years and is engaged in the supply of such drugs: antibacterial, herbal, generic medicinal products, antimicrobial, dermatological, antineoplastic and immunomodulatory, as well as other medical products: Travesil, Spatone, Rescue.
Optima-Pharm cooperates with domestic and foreign manufacturers of medical products, supplying vitamin complexes, hemostatic, dressings.
Venta supplies medical supplies from Glaxosmithkline; Pfizer; Berlin chemie; Bionorica; Teva; Novartis and other medicines.
Distributors of household appliances and IT products
ASBIS Ukraine is one of the largest IT suppliers in Ukraine, which provides components for computers, laptops, software, network and server equipment:
Business Appliances provides products for small businesses and other computer firms from such manufacturers: Acer, Dell, HP, Lenovo, Samsung, Toshiba, Asus, Sony, Intel, LG, Powercolor, Coolermaster.
ELKO is one of the leaders in the distribution market in Eastern Europe, the CIS and the Baltic states. ELKO supplies products from more than 90 manufacturers, including Intel, Lenovo, Samsung, Toshiba, AMD, as well as:
DataLux supplies communicators, computer peripherals, printing equipment, visualization systems from such companies: HTC, LG, Sandisk, Xerox, Pioneer, Gigabyte.
ERC has been developing in Ukraine for about 20 years, supplying computer and office equipment, software, digital photo / video equipment, information technology products from such manufacturers: Acer, Dell, HP, Samsung, Toshiba, Transcend, Sony, JVC, Canon, Nikon, MSI, AMD, and also:
Diawest is a business partner of such world corporations: Intel, Samsung, LG, HP, Epson, Canon, APC, Lexmark, Sony, Microsoft, etc., and also supplies products from Lenovo, Dell , Samsung, Sony, MSI, Fujitsu, Canon, Philips, Acer, VeiwSonic.
South-Contract represents products of more than 70 brands, including Canon, Goodram, JVC, HiTouch, Kingston, Kodak, Nikon, Nokia, Noritsu, Olympus, Panasonic, Philips, Samsung, Sony, Sony -Ericsson, TDK, Toshiba, TP-LINK, Transcend, and also:
K-trade manufactures PCs, is engaged in system integration, service and distribution. It supplies products from the following manufacturers: 4U, Microlab, Philips, Logitech (Labtech), Compro, FSP, HIS, Flybook, Lenovo, MSI.
MTI is one of the largest participants in the Ukrainian IT market, engaged in wholesale and retail sales of office and computer equipment, service. The company cooperates with such companies: Lenovo, Samsung, Canon, Nokia, Panasonic, Philips, Sharp, as well as:
Roma promotes th IT and paper business. Supplies Samsung, LG, MSI, ViewSonic, Asrock, Captain products.
Serol supplies computer components: memory modules, processors, video cards, flash devices.
Banksvyaz is engaged in system integration, information and analytical systems, distribution of computer and telecommunications equipment. Delivers Fujitsu, OKI, and:
VCT deals with the supply of portable computer equipment and mobile communications, is an official distributor of Toshiba and a partner of HP, also supplies products from such manufacturers: Sony, Apple.
Alcotec is engaged not only in the distribution of household appliances, but also provides the following types of services: marketing, service, design, logistics. The following company supplies equipment to the Ukrainian market:
EUROTEC supplies large and small household appliances from the world’s leading manufacturers: Samsung, Sony, LG, Philips, Bosch, Liebherr, Gorenje, Smeg, Gaggenau, Miele, Siemens, Restart, Falmec, Kuppersbusch ,
ETK has a portfolio of manufacturers from Europe, Japan and Korea, in total – 24 brands that are certified and provided with a manufacturer’s warranty:
MIRS is a corporation that supplies household appliances, kitchen equipment, dishes, lighting, selling products both wholesale and retail:
NIS provides its partners with equipment and consumables from such manufacturers: Apacer, Ablerex, Odegen, Cosonic, Delux, Glacialtech, Katun, Sanyoo, Superpower, Vigoole.
Dako is a distributor in Ukraine of a full range of IT products:
ITKOM provides a high-quality range of IT-technologies to distributors of electronics, portable equipment, and also provides high-quality service to each client, creating conditions for increasing the profitability of the partner’s business. Deals with the supply of products:
MUK – distributor of computer hardware, network and peripheral equipment: Dell, HP, Lenovo, Samsung, Lexmark, Xerox, Alcatel, APC, Logitech, Molex, Takems, Iconbit, Checkpoint, Cisco, Extreme , Grandstream.
Film distribution
The film industry in Ukraine is just getting back on its feet after years of decline. The demand for it is growing, and Ukrainians go to foreign films with pleasure. Ukrainian distributors of film products are trying to provide the viewer with quality cinematography. Many film companies work with Ukrainian intermediaries:
B&H Film Distribution is the leader of the Ukrainian film distribution market. The company owns a chain of cinemas “Kinopalats” (15 establishments). The company is a direct distributor of such world famous studios:
UFD (Ukrainian Film Distribution LLC) is a Ukrainian distributor of studios:
Cinema Mania is a distributor of films for the Warner Bros. Pictures on the territory of Ukraine since 2002.
“Cascade-Ukraine” Company presents films of Columbia Pictures (Sony), and has been distributing products from film companies from many countries of the world for ten years.
The group of companies “Aurora” is engaged in the distribution of films from foreign and domestic companies in Ukraine and other CIS countries and Asia. Aurora represents Universal Pictures, Paramount Pictures, DreamWorks Studio, and
Law is above all
Not only fashion, quality and price influence demand. Politics play an important role in filling store shelves. And if Resolution of the Cabinet of Ministers of Ukraine of 12/30/2015 No. 1147 “On the prohibition of the import into the customs territory of Ukraine of goods produced in the Russian Federation” – understandably, the desire of lawmakers to prohibit / allow parallel imports is rather strange. The strangeness lies precisely in the duality: on the one hand, article 229 of the Criminal Code of Ukraine, and on the other hand, supplies in small batches, as well as the undefined status of parallel imports, which, in principle, is legal on the territory of Ukraine. The solution to this problem is gathering dust somewhere in the offices of officials. In the meantime, we will sort out the legal confusion of distributors.
Small consignments are consignments of goods for an amount not exceeding € 500. And theoretically such consignments do not require customs control. But at the customs, the infiltration of small lots of original branded goods is called “import of counterfeit products” (although we know that counterfeit is a fake), and for this either a fine (800,000 hryvnias) or the sky in a box for two years.
The ratio of imports and exports in Ukraine:
Patent trolling has become a no less interesting phenomenon – new, but already familiar for Ukrainians who are “in the know” . In the USA, for example, a similar phenomenon has been blooming and smelling for a long time. So: a certain company “X” wants to enter the Ukrainian market, an individual somehow found out about it and quickly registers a TM with the same name as that of “X” or, which is a little more complicated, receives a patent for this product … By entering the data into the Customs Register of Intellectual Property Rights Objects (it already has more than 3419 objects as of 05/01/2017). As a result, the customs slows down the processing of documents of the company “X”, restricting their further import into the country. Or another option: registration as industrial designs of things that are already in the everyday life of the population (toilet paper, matches, hangers), thereby monopolizing the import of these goods into the country. In both cases, 90% of companies X and X¹, and X², and others wishing to expand their markets, will buy a license from the said individual for their own intellectual property.
Combating parallel imports
What will change when gray (parallel) imports are legal? Original goods that can be bought not only from the official manufacturer, but also at any other outlet will disappear . This will happen because the majority of online stores, marketplaces and simple shops that are representatives of “unauthorized distributors” will not receive a marketing authorization from the manufacturer.
Large companies dictate their terms to the market, so it is more profitable for them to work with store chains and large retailers. And small bipods carrying original goods for their showrooms and small shops will disappear from the face of Ukrainian business. If the copyright holder refuses to import into the Red Book, the following items are included: household appliances, electronics, medicines, spare parts, household and agricultural chemicals – all those goods that are imported into Ukraine by unofficial distributors and are sold in small shops or stalls.
Pharmaceutical companies support the ban on parallel imports . For example, vaccines that require special storage and transportation conditions that small importers do not always comply with. In the best case, there will be no reaction, and in the worst case, the manufacturer will be accused of a severe reaction to the vaccine in the child (deafness, paralysis, death), but it is actually the careless importer who is chasing profit that is to blame. Also, the manufacturer may suffer if a product is imported to Ukraine that is not at all intended for our climatic conditions, does not meet the requirements of Ukrainian legislation or the Ukrainian language markings.
Two camps, opponents and champions, have enough arguments for and against, but time will tell who was right.
Distribution is a difficult path to the consumer
The road of a product from manufacturer to consumer is a chain, the length of which depends on the promotion strategy chosen by the manufacturer, as well as on the choice of distributor. The traditional model is when the manufacturer is looking for its distributors. Such sales are called direct (SUN InBev Ukraine (TM Chernigovskoe, Stella Artois, Corona, etc.), Carlsberg (TM Slavutich, Tuborg, Baltika, etc.).
Another scheme for organizing supplies, indirect , – from the manufacturer, the goods go to a foreign distributor, which supplies the products to subsidiaries in different countries. The third scheme for organizing supplies, mixed, – a subsidiary of the manufacturer performs the functions of a distributor (Shabo, IDS Borjomi Ukraine).
The most important goal of a distributor is convenient and fast delivery of products to the market. At this stage, the choice of warehouse plays an important role. Today distributors often choose small warehouses due to optimization of work with partners. At the same time, a plan is drawn up for the turnover of goods in the warehouse: a lot of goods in the warehouse is a sign of the distributor’s wrong policy. The financial side is also important. The manufacturer determines the recommended price for the end user, which includes all the nuances associated with the delivery of products.
Summary
Choosing a reseller is a difficult task, so you need to evaluate the territory of possible sales, distribution channels and the quality of the distributor’s work. This information can be obtained through the website of the intermediary, negotiations with representatives of retail outlets, dealer conferences. When evaluating a distributor’s product portfolio, you need to look at the positioning and competitors’ products. It is worth remembering that the market for distribution companies has already been formed, so they can dictate their terms of work: additional discounts, a large percentage of payment, and so on.
A manufacturer’s reputation directly depends on the services of an intermediary. Therefore, before starting cooperation, you need to find out all the issues related to the warehouse, logistics, personal qualities of workers, if equipment is supplied – the availability of service. Flaws in one or more niches will lead to lower sales.