As part of Valhalla’s value proposition, our network is vast and diversified. We provide the vast network across our markets so that you our clients can reduce their overheads and rely on a service offering that is founded on the principles of good business practice. Whether it is product storage, shipment, trans-shipment or packaging everything done at Valhalla is done with accuracy, precision and cost effectiveness.
Value Proposition of Distribution Companies
Distribution companies play an important role in the spectrum of the marketing mix. If a manufacturer decides to handle the entire product mix internally, they better be certain they have what it takes to pull it off and that they are experienced and knowledgeable in all the areas of the marketing spectrum, like product, pricing,marketing, Warehousing and distribution services. In most cases the issue that sticks out like a sore thumb is the distribution, because not only do they need to be knowledgeable in the theoretical aspects of the issue but they also have to have a huge infrastructure to cover the breadth and width of the market.
Distribution Companies Lighten the Load
Instead of expanding an operation simply for the purpose of serving the market area, it is better to use distribution companies to handle this aspect of the marketing spectrum. These external organizations usually handle large loads of other people’s products and as such have one great benefit that can be shared by everyone. They have the benefit of the economies of scale. The economies of scale in terms of warehousing, transportation and stocking multiple products across multiple geographic markets can be an awesome price saving for all concerned. It can reduce fixed costs and make a company more lean in its operations so much so that it is able to withstand economic downturns and competitive shocks.
Warehousing And distribution Services
The value proposition by Warehousing and distribution companies is rooted in the flexibility and fungibility of costs over various modeling periods. In a typical spreadsheet model it is easy to understand the effect of an economic downturn that reduces demand in certain business segments while increasing demand in other segments. In cases like this an outsourced facility would make more sense to the manufacturer. In situation like these, companies that provide the ability to reach other markets, be it domestically, but far from the manufacture’s location, or regionally or even internationally, become worth the effort. That, in essence, is the value proposition of Warehousing and distribution services.
Warehousing is the center of the value proposition distribution companies offer. Without warehousing, transportation costs will escalate beyond grasp. If warehousing is not used as a solution, competitive pricing can never be obtained. If two competitors are pit against each other in terms of price, assuming identical utility and quality, the winner would be the one that can offer a better price performance. The best price performance can only be achieved by those who take advantage of significant economies of scale, which can be attained by sharing the cost of warehousing with other manufacturers.
Within the value chain of each entity or solution provider there is the need to keep things as efficient as possible across all functions. From decision making to product engineering and marketing, there is a need to be able to get what the consumer wants out to them in the best possible way. Having companies that specialize in each function makes it highly efficient and thereby allows survival during times of paradigm, market and industry shifts.