When searching for a location for your distribution business, you would never think to locate near the “competition.” There may be ten stores selling the same products and you would think, “How could there be enough to go around?” or “How can I make a good profit?”
If you look at McDonalds or Burger King, they consistently make sure they are located within one mile of each other. The logic being that if one doesn’t have it, the other one will. The question is, “What do we need to do or provide to get the contractor to buy from us first?” There are certain things that attract contractors, and you have to provide them or they will wonder. The contractor is looking for reasonable prices, knowledgeable and helpful employees, quick time to purchase items, full stock of items, and wide range of stock items available for the contractor to eliminate additional trips to other distributors. Each contractor will have a different opinion of which of these are most important to them.
One distribution center provides fresh coffee and donuts for their customers. This is additional work for the distributor, but it is an attraction and it also helps when the wait to be helped is longer than usual. Another distribution center has vending machines available. These are specific ideas that may make a difference in the decision of where to purchase items.
If, for some reason, you want to locate your store where no one else in the industry is, you may only attract the contractors located in that small area. For an example, if a contractor is located 10 to 16 miles away of one distributor, and 10 to 16 miles away from five distributors (located near each other), they will select the area with five distributors to be certain they will be able to purchase the items they need in one trip.
If you do not have the time to dedicate to finding your “perfect” location, you can contact a marketing research firm. They will assist you with demographics of your target market, strategic planning and market analysis.
Known as The Growth Strategist® , Aldonna R. Ambler, CMC, CSP helps rapidly growing midsized companies (typically $20 – 200 million/year) realize their goal of Achieving Accelerated Growth With Sustained Profitability® through opportunity/resource analysis, executive coaching, strategic working sessions, and her intermediary role regarding growth financing. Her clients are among the brightest, most ambitious business leaders whose names now appear on published lists of the fastest growing privately held corporations. The recipient of 23 prestigious awards for her success as an entrepreneur and industry leader, Ambler hosts a peer-to-peer-to-peer Internet radio program, aptly called The Growth Strategist® , which features lively interviews with CEOs of midmarket companies who have successfully executed the growth strategy of the week. She can be reached toll free at 1-888-Aldonna (253-6662), by e-mail at Aldonna@AMBLER.com or online at www.TheGrowthStrategist.com.