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Chapter 1: Why Use a Wholesaler?

                   Redistribution of Sanitary Maintenance Supply products has evolved to the point that most channel
                   manufacturers and distributors recognize its value. Many Jan-San distributors, both large and small,
                   purchase from wholesalers; and many manufacturers are taking advantage of the benefits offered by

                   At the same time, there are many distributors and manufacturers who are not yet taking full advantage
                   of the benefits offered by wholesale redistributors.  This chapter will help summarize the key reasons
                   for working through wholesalers.

                   Successful wholesalers have grown because they are uniquely positioned to provide great value to both
                   manufacturers and distributors.

                   To the Sanitary Supply manufacturer, a sound redistribution strategy will yield:
                          ■ outsourced management of small, high-cost-to-serve customer orders
                          ■ access to new customers who are otherwise difficult to reach and serve
                          ■ reduced credit risk
                          ■ simplified logistics
                          ■ additional sales support

                   Jan-San distributors who source products from wholesalers likewise benefit from:
                          ■ faster inventory turns
                          ■ shorter lead times
                          ■ more frequent deliveries
                          ■ no minimums per manufacturer
                          ■ enhanced service levels
                          ■ improved fill-rate economics
                          ■ the efficiency of one order, one delivery, and one invoice for multiple manufacturers

                   How Does Wholesaling Work?

                   To the uninitiated, redistribution via a wholesaler would appear to be an unnecessary “extra step” in
                   the  Jan-San  supply chain, shoehorned  between  manufacturers and  their  distributor  customers. Other
                   manufacturers have a hard time differentiating redistribution from their forward warehousing or distribution
                   center network.

                   Perhaps it is easiest  to  grasp  the  role  and  value  of  redistribution  by comparing it to  Sanitary Supply
                   distribution itself:

                   If you think through the supply chain, there are good reasons why manufacturers don’t have direct selling
                   and shipping relationships with every customer who uses their products. To do so would require a colossal
                   increase in the scope of all of their operations. Imagine receiving, shipping, billing, and collecting on several
                   orders per week from tens of thousands of end-users – there is not a Sanitary Supply manufacturer who
                   could handle it. What’s more, there is not a Sanitary Supply end-user who would welcome this arrangement
                   with every manufacturer who supplies him. The Sanitary Supply distributor provides a clear value to both
                   the manufacturer and the end-user by consolidating a lot of small orders into a few large shipments;
                   wholesalers provide the same value, but one step back in the supply chain.  Unlike a Sanitary Supply

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