Despite being a bit of a dinosaur in some people’s eyes, the tile market has changed an awful lot over the last few years from the traditional set up of manufacturer to distributor to retailer and contractor or fixer. There has been a flattening out and blurring of the old demarcations, with many of the mid to large retailers and contractors buying directly from the manufacturers and many distributors branching out into retail. The net has also had a part to play with a number of tile internet stores springing up, some of which are run by distributors or manufacturers, some by retailers.
Another phenomenon is that some manufacturers are now selling directly to the retailer and contractor as their main distribution policy. This came about initially, as new entrants to the market often do not have a choice but to try to supply directly. The major distributors are not interested in taking in new, untried lines, preferring to wait till they have become established in the market place; a tactic which can backfire, as once a firm has gone through the pain barrier of reaching out to the mid to large retailers and contractors, then working out a way to reach the smaller players, they don’t need the distributors.
However going direct has its own problems, as without the localised distribution points and fully owned transport system that the major distributors own, it is difficult to deliver economically in the small quantities that the individual fixers, who work for themselves and the major house builders, require. These individuals do not have space to give over to storage of pallet delivered stock and often do not plan in advance, preferring to pop into their local outlet for whatever they need on the day, and if they miscalculate and end up short when tiling a house for a major house builder, it can mean shipping a single box of tiles to the site in a hurry.
To get them buying direct means a wholesale change in attitude which is difficult to bring about without a concerted marketing effort, and crucially the ability to provide low volume deliveries at a competitive price.
In addition for those manufacturers already tied in to the distributors’ network it is better to sit tight and carry on, as they have a substantial amount of business which they stand to lose and would be difficult to replace in the short term, if they rock the boat by going direct to the larger players in too aggressive a way.
So are distributors now redundant? The answer to this is obviously no or at the very least not yet. They provide a service by importing and stocking foreign manufacturers’ goods in bulk, which can also be useful as an emergency supply for those larger customers importing directly from the manufacturer. And they also supply small quantities at short notice where needed. There is a price premium to be paid for this service as they must make a profit and so add a margin into the price, but for the moment it is one worth paying for the businesses without the size to buy and hold large amounts of stock.
