Distribution Companies And The Problems They Face

Posted by sandeepw on November 14th, 2019

Distribution companies play a major role in the food industry including selling of the products. They work as an intermediary between the final user and the manufacturer of the product. They ensure that the product reaches its destination successfully. This sector is rapidly changing and many manufacturing companies and retailers are pumped up to invest to build their own distribution network.

The companies have made it a trend to directly offer the products to the customers and cut off the intermediary. This has resulted in a severe challenge for the distribution companies Dubai considering profitability and entire market position. Still, there are many challenges that they face very often. They include the following:

Management of inventory: If you are planning to get into the distribution business, you need to know about how the entire model works. It is a system of keeping a tab on products coming into the storage facility and getting dispatched from there. It is a vital procedure as you are aware of the stocks left in the warehouse and its sales. If you don’t know about the left stock amount you can’t refill the particular items resulting in to delay and frustration of your local customers.

E-commerce: There have been many distribution companies in UAE for the last 10 years and they don’t know anything about eCommerce business. The aspects of it have revolutionized the entire industry. There are many distributors in the world who are struggling to build their online presence.

Customer’s demand: Distribution companies in the UAE face a grave challenge when it comes to meeting their customers’ needs. Modern customers are more aware and the millennial buyers purchase things online from computers or mobile phones. They are expecting a certain level of service. This needs to be fulfilled without fail.

Disintermediation: It has been a global trend for the manufacturers and retailers to de-link the distributors from whole selling equation. They are setting up their own distribution network to sell the products directly to the customers. As a result, both parties get benefitted. The retailer can get the products at a lower cost from the manufacturers who can sell the items at a higher price.