The key challenge for businesses in building a product for a specific market is knowing and understanding the market you are selling your product to and sometimes … no nearly all the time it’s a product you think that will sell into Aged or healthcare market because you were told there was a demand for this and so you build it thinking they will come to use an old ‘field of dreams” quote.
In reality it’s about understanding the problem you want to solve and to do that you need to understand the customer and the challenge or problem they encounter , then you need to create opportunities and trial your product get feedback and then you need to have the solution priced suitably so it is manageable for the cohort you are helping, then you need buy in from Key opinion leaders or change makers within the Aged and Healthcare sector which gives you credibility with that customer.
But what if you want to get your product solution and build economies of scale through tackling one Aged or Healthcare organisation at a time, attending expensive conferences which is still happening during COVID19 and trying to get the attention of Aged and Healthcare staff during challenging times you may spend enormous time , energy and money and almost feel disappointed with the effort.
Then you think…. what can I do to get my product distributed faster and across the care sector?
I need B2B distributor who has an extended sales force and warehouse storage capability to manage and deliver my product / services /and or solutions to the sector and given most Aged and Healthcare organisations have consolidated suppliers to reduce ongoing costs of processing invoices managing storage capacity for stock, reducing labour costs and delivery frequency .
If by chance you are an Aged or Healthcare organisation doing this right now ….
Congratulations you are managing your costs effectively.
As a product manufacturer or supplier you have now found a B2B distributor and here is where your problems and learning begin ……. B2B Distributors are there to help you logistically move product in sometimes cost effective way nationally, they are there to make money like all commercial businesses, here are some of the mistakes that are made sometimes by assumption, however I’m here to assist navigating the following mistakes new businesses, manufacturers , suppliers might make from initial interaction with B2B Service providers.
1. If you have a product that is commodity based e.g. gloves, PPE, Bin-liners etc it will be very hard to convince the B2B buying team that taking on yet another glove will be advantageous to their business remember they are there to make money – Do your research with the B2B company establish a gap or opportunity and do your homework.
2. Most B2B distributors have a sales team and are verticalised and have sales teams that are specialised in Aged and Healthcare and most are measured on sales margin and revenue so again do your homework on what margin % or $ your product will contribute or motivate them to talk about your product or solution.
3. Understand your costs because inevitably the B2B Distributors will request a volume rebate, promotional rebate and possible holding costs to cover their costs, then margin to the distributor with no expectation they will sell or market your product other than in a catalogue and on-line website…. Once you add all these costs you may see you have priced your product, service and solution and made the offer uncompetable.
4. Most B2B distributors look for high stock turns for them your products sitting in the warehouse is working capital and if the product solution is not moving they may either sell it cheaper driving your brand downwards or they may insist you take stock back. IMPORTANT NOTE – Ensure you have fair and equitable KPIs for product life and stock turn.
5. Just because you have a B2B distributor don’t think that your work is done you need to meet regularly with the buying and sales team to ensure your products and services remain relevant and that your own sales team work with the B2B team to ensure you share a sales pipeline and they meet regularly ….. the suppliers who do this almost inevitably win with higher sales and better distribution.
6. If you have Tech services, Software applications or other solutions that don’t involve a product that requires warehousing and storage don’t assume that a B2B distributor cannot help you ….. because that is an assumption if you are B2B distributor they have access to your target market with a plethora of customers that can open doors. Again make contact with the B2B buying and sales team and discuss if they have an appetite to support the service you are providing.
If you want more information or have a product, solution or service and you want to understand more than please contact Sean Matthews at Banksia Consulting Group .