Criteria for selection of distributors of electrical equipment
According to statistics of the socio-economic situation in 2017 of Hanoi General Statistics Office, in the first four months, the consumption index of electrical equipment industry in Vietnam has increased by 9.4% compared to 2016. In March alone, this figure also increased significantly at 6.2% over the same period last year. This shows that consumer’s demand for electric appliances is increasing, attracting investment capital of domestic and foreign enterprises to build factories manufacturing electrical equipment in Vietnam. Intech Korea Co., Ltd specializes in supplying electrical distribution boards and control panels, and Emuden Vietnam Co., Ltd. manufactures electric wire, are two typical foreign investors having workshops at Kizuna Serviced Factory.
The increasing number of businesses investing in electrical equipment has led to the growth of large and small distribution agents in the industry to meet the needs of consumers. However, this increase inadvertently makes investors difficult to choose the distributors of electrical equipment which are known for prestige and high quality because it directly affects the sales as well as brand name of the producer. Therefore, manufacturers need to find out and set specific criteria to choose the best distributor of electrical equipment. So what are the criteria? Let’s find out more through the article below!
1. Guarantee of legal person status
The selected distribution companies must be a legal entity in accordance with Vietnamese law, which means that they must have the function of distributing the goods. This is the first important factor that distributors must have before implementing the vendor’s product distribution deal. Therefore, manufacturers need to understand this issue thoroughly before making a decision to avoid unnecessary offenses.
2. Exclusive Distributor
For companies in the field of electrical equipment production, they should choose the exclusive distributor who distribute only the products of a single brand to avoid conflicts of interest. In addition, this also helps investors easily check their distribution network and limit the competition from other brands. For example, Nanoco is Panasonic’s exclusive distributor of electrical equipment in Vietnam. Panasonic’s selection of an exclusive distribution network allows the brand to minimize the competitiveness of competitors in the same distribution.
However, in case an enterprise cannot establish a proprietary distribution system, it is still acceptable for distributors to trade in other products, as long as they are not a direct competitor in the market.
3. Financially stable
Choosing a distributor who is financially stable is also one of the top criteria that businesses need to care about. A financially stable distributor will be able to meet the demand for debt, the frequency of placing orders, as well as investing in equipment for sales such as transportation vehicles, warehouse services, machinery management, etc. In particular, storage area also shows the ability to store and preserve the electrical equipment of the business. Especially, industrial electrical equipment are often very large and bulky so the required area of storage must be widely guaranteed. On the other hand, household electrical appliances do not require too much storage space, but focus on eye-catching display which is also convenient for customers to find and select products.
4. Management capability
Distributors must be able to operate and manage the support team for product distribution such as logistics, accounting, distribution, etc. in a consistent and effective way. Moreover, manufacturers should select distributors of electrical equipment with strong management information systems to control the number of items sold and inventory in strict terms.
5. Have experience in the field of distribution of electrical equipment
Enterprises should prioritize distributors who have many years of experience in the field of distribution of electrical equipment since they have good relationships with customers and are prestige in the market, it also contributes to adding value to the manufacturer. In addition, a distributor with experience will also find it easier and more convenient to implement the manufacturer’s policies when distributing the product to the consumer.
The above are the top five criteria that businesses in the field of processing and manufacturing electrical equipment should pay attention when choosing distributors of products of the company. Kizuna hopes that with the above criteria, domestic and foreign investors will be able to choose for themselves the good and quality distribution system in Vietnam.
By Marketing Department – Kizuna JV Corporation