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Evolving Distribution

Evolving Distribution

December 27, 2010
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" Studios are happy if you represent their product well. Not everything sells, but if you can do a good job of representing it, a quality product will sell itself. — Scott Taylor, President, National Video Supply "

Aside from handling the daily operations of a store, retailers must keep up with all the hottest new releases, keeping in mind their customers, for the perfect inventory to stock. While select large chain stores have come a long way in establishing their locations, they bask in the opportunity to designate a department dedicated to following the needs of their stores, and their wide reach also gives them the option to work directly with manufacturers to fill their inventory. The vast assortment of smaller, singular brick-and-mortar adult retailers, however, often find themselves in need of a different sort of supplier and this need continues to strengthen the ever-evolving role of distributors.

XGen Vice President Andy Green said that with smaller retailers outnumbering large chains, the business of distribution is keeping retail thriving.

“With their large minimum order requirements, a variety of manufacturers would not be able to reach all the little stores if it wasn’t for distributors,” Green said.

SLS Specialty CEO Shane Nelson added that distributors serve to keep the retail buyer moving forward at a productive pace. “With the overwhelming amount of product being released each month, retailers need a one-stop shop,” Nelson said. “Each distributor has a specific niche so we are great sources of information for retailers to essentially lean on to see what’s new and coming down the line, and to keep stock updated and current.

“Discontinues are a huge issue — distributors can inform retailers of discontinued items once a month rather than leaving them to rely on separate alerts from each individual vendor.”

According to Green, with so many distributors competing against one another, earning their trust with good customer service is what defines one from another.

“XGen goes above and beyond for our clients,” Green said. “We get information about our products from the brands themselves and go into retail stores to provide education, seminars and in-store training.”

Laura Sweet, of adult distributor Honey’s Place, echoed the importance of quality service, “Product knowledge, merchandising ideas, promotional support. In-store visits to help with input on all of the above. We are building relationships to support the growth of our clients’ businesses and in turn we build our own.”

XGen is the exclusive adult distributor of Pleaser Shoes, Seven ‘til Midnight and Pleasure Wigs, among others. Green said that with so many manufacturers spreading their product amongst various distributors, exclusivity definitely plays an important role.

“It doesn’t make any sense to carry items that’ll make us bump heads with five other distributors,” Green said. “At XGen we’re constantly on the lookout for new and different products that we can offer exclusively.”

“Distribution is a very competitive business,” Sweet said. “We basically all have the same product at the same price. We really only have ourselves to sell by means of customer service, fill rate and turn-around time.”

SexToyDistributing.com said it specializes in offering niche products not easily found in a wholesaler, but also stocks mass-market brands including Doc Johnson, California Exotic Novelties, Topco Sales, Trinity Vibes, Pipedream Products, Tantus, Wet, Sportsheets and Leg Avenue.

“SexToyDistributing.com has gained a stellar reputation with the adult retail world in such a short time thanks to our attention to detail and genuine drive to deliver what the industry needs,” XR President Ari Suss said. “Our product lineup now reaches past 3,000 best-selling and top-level brands, and we’ve expanded into a 40,000-square-foot warehouse that lets us maintain a 95-percent fill rate.”

Coyote Days, senior buyer at Good Vibrations, said she sees the manufacturer-retailer relationship evolving to one where distributors’ work may be limited.

“As companies get bigger, I’m seeing a lot more of them go directly to the manufacturers,” Days said. “In the past, manufacturers focused solely on manufacturing. Now I see them getting more hands on with the support they offer to their retailers.”

Sweet said that ideally a distributor’s work allows manufacturers to focus on their main responsibility — production.

“As far as manufacturers go, working with a distributor allows them to focus on making the product and allows their distributor to get their products into as many retailers as possible,” Sweet said. “Their work force is focused on product development instead of wide distribution and sales.”

Nelson also noted promotion as a benefit offered to manufacturers by his distribution company.

“Manufacturers benefit by having their new releases promoted via exclusive newsletters and mailing, rather than being lumped in with a series of other brands, which makes a huge impact,” he said. “Manufacturers know that if SLS Specialty brings them on, their product gets our full attention.”

Days confirmed that as a seasoned retailer, Good Vibes depends less on distributors, however still values the facilitation from working with a distributor.

“Distributors allow retailers to streamline their business,” Days said, noting lower shipping costs, smaller minimum orders and wider selection as the benefits offered by distributors.

“Customer service is key,” Days continued, “As a buyer, sometimes we miss things and a rep can help by pointing out the items that may fit us best.”

As a studio-ownerturned-novelty-manufacturer, Scott Taylor has found great success in diversifying his companies. His 25-year-old distribution company National Video Supply carries DVD, novelties, lubes, clothing and smoking accessories, among other products.

As a one-stop shop, Taylor said customer service has been the key to National Supply’s longevity and success.

“Trust, service and selection is the key to our success,” Taylor said. “Margins are very tight in distribution so you also have to run your business very smart. But by focusing on those three elements, we have remained a strong distribution company for 25 years. We are actually growing and offering even more than we ever have before.”

Although National has expanded from VHS to DVD to toys and novelties to a variety of other goods, Taylor said the company still serves its studio clients.

“Studios are happy if you represent their product well,” Taylor said. “Not everything sells, but if you can do a good job of representing it, a quality product will sell itself. That and we have an excellent reputation for payment. The studios really like that.”

As part of the promotion of the DVDs offered by National, Taylor said the company works closely with The Store Program, which is a manufacturer-based company supported by Wicked, Zero Tolerance, System Jo, New Sensations and Pipedream Products.

“Store Program has field reps that introduce new products from these vendors as well as provide support and information intended to benefit the customer,” Taylor said. “So we have people that will come to your store and address your needs directly. If we don’t have the product you need, we will find it.”

Taylor added that while companies have come and gone over the years, he’s learned that undercutting prices to remain competitive is not the answer.

“In many cases companies go out of business and the customer is left behind,” he said. “We do business one way and stick to it. We bend with the times without breaking.

“Distribution will become more competitive. If we all offer the same things then it will be about trust and service. There are quite a few good distributors in the country but they are becoming fewer by the year. This offers more opportunity for the stronger ones but as retail customers close, it makes the market share smaller. I look for the distribution business to broaden their product range to meet customer demand. At least that is what we will do at National Video Supply.”


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