You have probably heard of the term ‘stockist’ used in distribution channels, but what is a stockist? They are actually businesses or people who sell certain products to another company or individual. The growing demand of stockists stems from the increasing number of overseas companies who want to bring their brand abroad and local e-commerce companies who wish to open a physical store. Holding the role of both a distributor and a retailer, stockists would store goods sent by suppliers or companies and promote them to their existing customers at their own store.
What do retailers do? What is the difference between wholesalers and retailers? Although the job scope sounds similar, they play entirely different roles.
In a demand-driven supply chain, distributors take on the supplier role and distribute goods to wholesalers. Wholesalers purchase goods from distributors in bulk and sell them to retailers in small quantities. Retailers will then sell goods to the consumers.
While these three entities work closely to get their goods to reach customers, a stockist not only distributes their stored goods to other retailers but also sells them directly to consumers.
|What do they do?|
|Examples||Department stores such as Marks & Spencer or Sephora.||Food and beverage brands such as Old Town White Coffee or Lingham’s.||Retail outlets such as IKEA, Uniqlo and Nike.||E-commerce platforms for businesses such as Alibaba or Taobao.|
Super stockists are in charge of delivering products to smaller distributors within a designated area. They purchase products from a distributor in bulk, then resell them to sub-stockists. These sub-stockists then channel the products towards retailers with the help of logistics service providers. This creates a sort of hub-and-spoke model with the super stockists as the hub and sub-stockists representing the spokes.
While this allows more rural communities to have access to brands and products which would otherwise not be supplied to the region, logistics costs are generally higher. This is because the goods go through at least two entities.
Meanwhile, stockists are more suitable for urban areas as they do not require the help of sub-stockists to distribute their goods to other places.
In today’s competitive retail scene, having multiple income streams is key to sustainability. For an overseas business owner looking to target the international market for the first time or a young startup struggling to gain exposure, working with a stockist can be extremely beneficial. They help your products get seen by more people by running their own marketing activities to promote them.
Apart from bringing you additional revenue, they also provide you with valuable customer and industry information. Working directly with the end consumer allows them to gather customer feedback to provide you with connections and advice which saves you time in doing your own research. A robust outreach strategy involves different channels, each with their own merits. Instead of relying solely on direct selling online, making stockists a part of your business model can help you achieve better brand awareness and revenue.