Will Fuel prices be the end of the old distribution ways?

[ByronM]

Just curious if you think that fuel prices & surcharges will put an end the old standard "distributors" and put more manufacturer to end user supply chain processes in place?

I mean if you think about it, it often goes.

Manufacturer -> Warehouse -> Distributor -> Warehouse -> Retailer -> Customer

Thats a huge percent of the product costs in fuel. Why not more:

Manufacturer -> Warehouse -> Retailer for "brick & mortar"

Manufacturer -> Warehouse -> Consumer for "ecommerce"

If distributors are to survive my guess is that they will become more of the "warehouse" managment for manufacture and work on more direct to consumer approaches for the value add in order to maintain decent pricing.

The way i see it, the classic middle main distributor as a strict "b2b" provider will be struggling to control costs and maintain margin in a spiraling fuel market.

In many cases the only way to survive in retail is to skip the distributors to begin with and go direct.

[Trucker]

Our industry is already more like

Manufacturer -> Warehouse/Retailer -> Consumer

Of course, that's just the larger players. We still sell to the smaller retailers too.

[willybfriendly]

Too many manufacturers are doing custom order work, and too many brands are contracting out work that used to be done inhouse.

That factory in China that is making iPods is involved in a whole lot of other stuff too. And that workshop in Indonesia making shirts for The Gap is making them for Sears, Nordstrom and Abercrombe and Fitch as well.

Yes, it will change in time - it has too - but time does not necessarily mean the foreseeable future.

[King_Fisher]

In most cases the distributor is the warehouse. So its goes.

Manufacture, distributor/warehouse, retailer, customer.

Yes it needs to be improved!...KF

[trinorthlighting]

If you really want to be competitive these days with shipping costs. Figure out a way to do Manufacturer -> Consumer

[ByronM]

If you really want to be competitive these days with shipping costs. Figure out a way to do Manufacturer -> Consumer

Thats what i'm working on. 10 years ago they never would have attempted such but logistics & shipping is so much more advanced/mature in technology, services and affordability that it makes more sense for the supplier/manufacturer to go as direct as possible to provide the best value to not only its end users but those who are selling it.