Direct Store Delivery is a critical term in the Wholesale Industry, and particularly in Wholesale Distribution. That is, you distribute to retail locations on a one-by-one basis.
Wholesale Distributors, Retailers, and Manufacturers must become familiar with the DSD process, as the majority of accounts, category buyers, and anyone who is anyone will inquire about it if you are in the wholesale business.
Direct Store Delivery, or DSD, is a distribution method in which a distributor sells and delivers store by store, stopping at each location or account to drop off products and occasionally merchandise them.
You are not a DSD distributor if you drop ship or ship to a single location, such as a distribution centre.
Retailers, particularly large chains, adore DSD. They adore Full Service DSD even more than DSD. This is when the distributor delivers products and services the account store by store. In other words, cleans and merchandises the shelves or displays, hangs pricing, displays, and other point of sale materials, and then moves on to the next account.
Stores adore DSD because the distributor handles everything and they never run out of product. If the distributor does a good job, the retailer will always have an adequate supply of product.
What exactly is the point of being a DSD distributor? To be fair, if you are a small distributor, this is not a significant issue. If you operate as a one-man operation or distribute in a single city, you will have no problems with DSD and will likely not require a significant investment. On the other hand, if you acquire a large retail chain, the chances are they will be spread throughout the state or the country. Consider how significant this is. You’ll require a sales force and trucks.
This is why retailers prefer DSD, while manufacturers prefer truckload deliveries to a central warehouse location. DSD requires a sizable investment. If you are not interested in investing, you must still go around and sell to distributors who do have DSD. This process can take months, if not years, if you already have retail accounts secured.
Classify distributors of DSD into two broad categories: full service and case droppers.
You’ve already learned a little about Full Service DSD distributors; they’re the ones who deliver products store by store and merchandise the account, spending several minutes or even hours in each location.
The other type, Case Droppers, are DSD distributors who do not merchandise items; as the name implies, they visit stores but unload cases or pallets before moving on to the next. The store employees are responsible for stocking and merchandiseing the products.
Now, what is the best course of action for your products? To be honest, it’s a no-brainer. Complete Service DSD is the most efficient method of delivering product in almost any situation. You’ll generate more sales, your inventory will be replenished more frequently, and if your distributor does a good job, you’ll always have the best spots on the shelves or retail floor. Your products will be priced appropriately, and the employees and managers of the stores will give your products a face. That is always critical.