We all know of the nursery rhyme about the little boy who put his finger in a leaking dyke to prevent water from flowing into his city. In the tale, his finger averts a potential flood as he contained the leak until help arrived to plug the hole. We all know water can be trickier than that and if one leak is plugged it will usually find another way to leak in because water always follows the least resistant path to where it is going.
Like the water in this old fable, free markets will find the path of least resistance to move goods from manufacturers to end users. The resistance in a marketplace can take many forms; inefficient use of labor, too much inventory, channel conflict, or even government regulations to name a few. Any kind of resistance in a marketplace adds cost to the goods or services that ultimately the end user will have to pay for.
That is where the dealers of the foodservice equipment and supply industry step in; we offer the path of least resistance between the manufacturers and end users of our industry. By moving products to market through distribution, the final costs of a product are less than if end users execute their transactions directly with manufacturers.
Dealers invest time and resources to have a trained staff of professionals that can do design and layout work.
Dealers have invested in showrooms and test kitchens so that end users can see and use items they are considering for themselves. We carry inventory, bringing items into our facilities in bulk, gaining efficiencies of scale in freight and handling.
Dealers will coordinate and handle the delivery and installation of the goods setting everything in place in the kitchens. Once the installation is complete we may provide equipment startups and end user training so that the cost of operating the unit is as low as can be and with proper maintenance, the life of the product can be extended.
We also act like a bank, offering credit terms to our customers, bridging at least part of the gap between when the manufacturer invoices and the customer's opening and therefore assisting with cash flow.
Do all end users need all of these services? Certainly not, but between all end users, all of these services are used. Larger end users may do some of these items in-house and smaller end users may not need every service. Would the market survive without dealers? Yes, but the manufacturers and end users of the industry would have to fill the void and that is something that they have neither the capacity nor the desire to do. You can remove the dealer but not the functions that a dealer provides.
Dealers exist because the services that we offer provide the least resistance to the marketplace. We take the costs of the services we provide and in some fashion spread them out over some or all of our customers, in turn making all of these services less expensive for them. Without foodservice equipment and supply dealers, prices will go up in the channel and consumers would ultimately pay the price and that is not in any of our best interests.