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The Recreational Vehicle Aftermarket Association (RVAA) recently published an industrywide “white paper” which expresses the association’s position on the importance of the distributor in the supply chain.
The drafting of the document was approved by the RVAA Board of Directors during an April 29 meeting in Chicago.
According to RVAA, the document was created as an information piece targeted toward RV manufacturers indicating the value of working directly with an RV distributor and describes the nature of the distributor’s role in the industry as well as the many benefits of working through authorized distribution channels. The RVAA “White Paper” is reprinted in its entirety as follows:

Over the past several years “authorized distributors” in the recreational vehicle aftermarket have been impacted by the recurring problem of aftermarket products being sold by original equipment manufacturers (OEM) to dealers and then transported inside the newly delivered RVs to those dealerships.
The purpose of this white paper is to clarify to OEM suppliers the importance of the role that authorized distribution plays in the recreational vehicle aftermarket supply chain. The basic premise of the distribution agreement is to “authorize a distributor to sell” a company’s product. With this authority comes both responsibilities and benefits. The mutual success of both the supplier and the distributor is the ultimate goal of this relationship.
The very premise behind authorizing a distributor is based on distribution’s ability to actively sell, promote, and market a supplier’s product to a broad customer base. This goes hand in hand with local sales coverage, actively calling on many customers, providing technical support and following up on warranty claims. Part of the requirement is to carry a significant inventory that is “available to sell” when a customer is looking for product. At a minimum, the typical authorized distributor holds several months worth of inventory. Distributors pay for that inventory and hold it until a customer comes along to buy it.
Because of the nature of their business the vehicle manufacturers are unable to perform these vital distribution functions. Suppliers that sell additional products to vehicle manufacturers, knowing or having reason to believe that these products will not be installed, but sold to dealers below wholesale prices, will erode their distributors’ ability to effectively support their products. Additionally, the supplier, in many instances sacrifices significant differences in margin between the OEM and distributor price point.
Distributors incur costs that include inside sales, outside sales, technical support, product management, advertising, facilities and inventory. Authorized distributors are also expected to extend credit to the vast small and medium account base – typically customers that suppliers cannot serve on a cost-effective basis.
There are other unique requirements pertaining to a supplier authorization. One of the most important areas is supporting suppliers’ pricing strategies. Most suppliers have different strategies depending on their cost and what price the market will bear. Part of a distributor’s responsibility is to “partner” with a supplier and help maximize supplier margins. This has consistently led distribution to be one of the most profitable options a supplier has in getting its products to market.
Authorized distributors are also required to provide their suppliers with “point of sale” information enabling the supplier to look through their business into the actual customers’ requirements.
Authorized distributors support suppliers in a variety of ways. In terms of value added services alone, distributors offer supply chain management programs; just-in-time and proximity warehousing services; programming services; and technical support which is critical to many suppliers. Authorized distributors also conduct expensive marketing programs that support suppliers’ new products. These marketing programs afford suppliers the ability to reduce their internal cost of sales by transitioning that cost to their distributors. Authorized distributors also introduce suppliers’ new technologies to a large number of customers that could never be reached cost-effectively by the suppliers.
Distributors also provide a valued service in keeping supplier costs in line by assuming responsibility for receivables from literally thousands of independent dealers. Days outstanding on these receivables are carried longer on the distributor’s books than those carried by the supplier for their distributor’s.
Authorized distributors spend substantial sums on information technology programs to improve chain management responsibilities upstream and down. This not only corrects and improves distributor and customer inefficiencies, but also solves problems and reduces costs for their suppliers. Where would suppliers be today if they had to support the numerous customers that have little or no IT capability? Authorized distributors have also made substantial investments in Internet/web systems and inventory management systems. Authorized distributors have done this not just to make their business more efficient, but also because most of their customers do not or cannot.
In the end, the supplier who partners with an authorized distributor gets a streamlined, cost- effective world class partner that is loyal and dedicated to the supplier’s success. Allowing aftermarket products to be sold to dealers through OEM’s is a dangerous precedent and serves to undermine the very distribution model that serves the RV industry at the highest levels.