Wholesale Distribution Business: What is Direct Store Delivery?

Posted by Nick Niesen on October 28th, 2010

Copyright 2006 Jorge Olson

Direct Store Delivery is one of the most important terms in the Wholesale Industry, especially in Wholesale Distribution. It means that you distribute to retail stores one by one.

Wholesale Distributors, Retailers and Manufacturers have to familiarize themselves with how DSD works because most accounts, category buyers and anyone who?s anybody will ask you about this if you are in the wholesale business.

Direct Store Delivery or DSD means that a distributor sells and delivers store by store, stopping at each store or account to drop products and sometimes even merchandise those goods.

If you drop ship or ship to one location like a distribution center you are not a DSD distributor.

Retail Stores love DSD, especially large chains. What they love even more than DSD is Full Service DSD. This is when the distributor delivers products store by store and services the account. In other words, cleans the shelves or displays, merchandises the product, hangs pricing, displays and other point of sale material and then goes to the next account.

Stores love DSD because the distributor does all the work for them and because they never run out of product. If the distributor does a good job, the retailer will always be fully stocked with product at all times.

Now, what?s the big deal of being a DSD distributor? Well, if you are a small distributor it is not a really big deal. If you are a one man operation or distribute in one city, you will have no problems with DSD and probably don?t need a large investment. Now, if you land a large retail chain on the other hand, chances are they will be all over the state or all over the country. Now imagine how big of a deal it is. You?ll need a fleet of salespeople and trucks.

This is why retailers love DSD, but manufacturers prefer to deliver truck loads to one central warehouse location. There is a large investment with DSD. If you don?t want the investment you still have to go around and sell to distributors that do have DSD. This can take months or even years if you already have the retail accounts lined up.

I like to break up DSD distributors into 2 major categories, Full Service and Case Droppers.

You already read a bit about the Full Service DSD distributors, they are the ones that deliver products store by store and merchandise the account, spending several minutes or even hours in every single store working out a sweat.

The other type, Case Droppers, are those DSD distributors that don?t merchandise items, like the name suggests, they do show up store by store but they unload cases or pallets and go on to the next store. It is up to the store employees to stock and merchandise the products.

Now, what is best for your products? Well, it?s a no brainer. Full Service DSD is the best way of delivering product in just about any situation. You will get more sales, you will be stocked more often and if the distributor does a good job you will always have the best spots in the shelves or in the retail floor. Your products will have their appropriate pricing and the employees and managers of the stores will attach a face to your product. That is always very important.