Home » Library » eBook: Top 10 Distributor Back End Credit System (BECS) Considerations
Head of Marketing
October 3rd, 2017
Est. reading time
Fundamentally, as a vendor, you want all of your distributors to stock and increase the availability of your offers to partners who buy from them. Distributors will hold inventory confidently if they know that the product will sell at the price they have bought from the vendor, plus a margin for themselves, while still being attractive to end-user customers.
However, the moment you as the vendor, want to vary the price in the market you encounter a problem. Your distributors have typically already paid for the inventory they have and if you want to lower the price, say for example, for a short-term promotion, they can only get that promotional price if they buy more inventory at the new price (or, worse still, sell at a lower margin or loss to compete with other distributors selling at the new lower price).
Effectively you, as the vendor, can ‘make whole’ the distributor for selling at the new promotional price. The distributor has not been disadvantaged for holding inventory and you still get the short-term promotional pricing into the market. While it seems a relatively straightforward concept, there can be a myriad of pricing adjustments. To manage the process, a back-end credit system (BECS), also known as Ship and Debit in the distributor community, is necessary with many vendors having anywhere northwards of 20% of their business through distributors needing these price adjustments.
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