Open vs exclusive distribution

Leading UK distribution firms are torn between open distribution and exclusive deals.

Open distribution allows multiple firms to deliver the same product, while exclusive deals usually concern a publisher, manufacturer or developer who opt for just one distributor to supply its product to retail.

The findings come from MCV’s latest distribution special.

Supporters of the exclusive model include Gem, Meroncourt and Koch.

We work very hard for our exclusive partners, investing heavily to make sure that product launches are as successful as possible,” said Gem’s UK general manager Darren Houghton.

Exclusive distribution has also allowed us to put in place street date agreements with our customers that have helped level the playing field for all concerned.”

Koch’s MD Craig McNicol added: Publishers need to know who supports them outside the major accounts they do business with, and the only way this can be achieved is through close partnerships with distribution.

"Independents will only get support in reverse if it’s a professional dedicated relationship back up to publisher as opposed a bun fight on price.”

Meroncourt shares a similar view, with sales director Steve Walsh preferring exclusive distribution as it prevents reductions in price just to win business – hence the erosion of margin and, in many cases, customer service.”

Those who favour open distribution include Ideal Software and Keyne Distribution.

Open distribution is the only way forward and the recession will make the publishers explore this avenue’s potential even more,” said Ideal’s owner Paul Williams.

Keyne’s export sales head David Jones added: Keyne support open distribution. We find customers like to have a choice when they buy their stock, especially when some of the other official companies have such high prices.”

Others see advantages to both exclusive and open distribution.

I can see the pros and cons for both options,” claimed Bright Red’s Mark Williams.

However, in the current economic climate a smaller publisher may suffer if they are exclusive with a distributor who also has larger exclusive deals in place, as credit limits are quickly used up.

All medium and small-sized publishers would benefit from an open distribution model thus leaving all routes to market open to them.”

For more issues surrounding the distribution sector, check out MCV’s latest distribution special.

You can also read an overview of each firm by visiting MCV’s 2011 distributor profiles page.

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