Manufacturer distributor
Manufacturers or distributors who want to publish their product portfolios on line. Typically they work with local stores to get goods delivered to the end customer. Multiple sub cases are possible.
- MD1: End customer can only view the product portfolio but can't order. The end customer looks up a local store from the distributor site and contacts the local store directly. In this scenario it is the local store which will create the actual order. The goods are usually delivered at their store but if the goods are really big (eg. wooden chalet) it can occur that it's sent directly to the customer's residence.
- MD2: End customer orders and pays the distributor directly OR end consumer visits a local store. In the former case goods are delivered to the customer home address (typical e-commerce scenario). In the latter case goods are sent to the shop owner.
- MD3: End customer orders, pays the distributor and have the goods delivered to a local store of choice based on customer's preference. For instance, when a motorcycle bike would be bought on line, it would need to be prepared for driving in a local store.
- MD4: End customer orders an the goods and have them delivered to a local store. The end customer pays the local store directly from which subsequently he receives the goods.
- MD5: The website of the local store owner references a dedicated page on the distributor site by means of an hyper link or iframe. The layout of this dedicated page is similar in terms of layout to the site of the local store (same logo, branding, colors). This page allows the customer of the local stores to directly order a good and have it delivered at the local store or at customers residence. In this mode the store owners has the role of a third party sales person in relationship with the distributor. Hence contribution needs to be payed.
When a customer comes into the stores and wants a specific product, the shop owner adds the requested good to the order list. To reduce shipping costs, usually he'll not order directly but wait until several goods can be ordered simultaneously. The order can therefore remain open for several days before the the order is actually submitted to the distributor. Ideally for each item the store owner can add a remark and additional information to link the order to his customer.
When the order is submitted, the distributor will start processing and deliver a consolidated status update on the availability of certain goods. It can happen that some goods are out of stock and will be on back order. In this case the distributor needs to understand whether or not the other ordered and available goods should be sent meanwhile. Sometimes the store is contacted to discuss how to proceed but better is to already foresee a a field at item order level so the store owner can indicate on a per good basis which goods should be sent directly in case other goods in the same order are in back order.
The shop can be billed for each individual order or it can be consolidated on a monthly basis. Important is here that only the delivered goods should be billed in most cases. Thus if you have for a specific order something in back order, the invoiced amount will be different from the sales order amount.
Below points to take into account when developing e-commerce solutions for this scenario.
The price of a good displayed will depend on the customer group. The end customer (not logged in user) would see the retail price including VAT - without shipment costs, handling fee, ... Shop owners are required to login to verify credentials. They are interested in their buy price excluding VAT, customer retail price and even profit margins can be relevant to show.
Some goods will not be visible to end customers. For instance if a distributor sells motorcycle oil products, the end customers will see small bottles of oil. Big 200 liter oil barrels for the garage floor would not be available for end consumers.
To improve relationship between distributor and store owner it could be decided that the store owner can see more information (eg. detailed technical documents) than an end consumer. This would particularly be the case in the world of consumer electronics for which detailed technical specifications on devices are available to store owners.
Several shipment strategies are typically available for distributors. They deliver it using company owned vehicles or use postal / delivery services. In the former case this implicates creating work schedules / planning to determine estimated time of arrival of the order. In the latter case it will depend on the delivery service to estimate the time of arrival.
This scenario is comparable to the first with the difference that end consumers are allowed to order (and pays the distributor directly). In this situation it's very important for the distributor to maintain a good relationship with the local store by allowing local store owners to lower their price more than the distributor site. Typically for each good the distributor sets the lowest price a local store can sell it for and assures profitability by means of grouped discounts (if you sell more than 100 products, you get an additional 2% discount)
Two pricing scenarios on the application date of discounts are possible:.
- Discount is calculated after the goods have been sold based on a predefined discount schema ( volume >= 50 and < 99 is 2% discount, from 100 and up 4% discount ). This is the most common case involving additional work from the distributor to calculate at some point the discounts which need to be payed back by means of a credit note.
- Based on the local store 's membership status (silver, gold, platinum customer) the discount schema is directly applied when the sales order is created.