Lessons learned from a distributor who ventured to launch his own brand....
- Contributed by Akash Kumar, Sales Buddy
Recently I was handling one of our clients (let us call it Ram Pvt. Ltd.) from the IT hardware industry. They were into IT networking products, under which they were mainly focused on IT networking cables i.e. CAT5E, CAT6, CAT6A LAN cables and Fiber networking cables. It was interesting to work with this client due to two reasons. First, Ram Pvt. Ltd was the only Indian company that had a presence in this specific product category. They were competing against MNCs who were having a stronghold all over the world. Second, they were changing their image from Trading Company (Distributors of MNCs brand) to a branded company with their own global brand.
While handling this client, I came across a number of new challenges which I feel that one can learn only through experience. Based on my learning, I am presenting those precautionary steps which a distributor firm must take before launching their own brand.
Image transformation of Trading Company to Branded Company should be Gradual Process. Even though Trading Company would be having sales staff, reach, supply chain, efficient working capital, it should not stop their entire trading operations suddenly and start selling only their own branded products. Typically the driver for the firm to launch their own brand is a higher margin. Although the distribution business will continue to offer lower margins the trading business will be crucial for the survival of the business.
