MOST DISTRIBUTORS HAVE FACED THE QUESTION OF EXPANsion sometime in their career. Should I remain a single location and concentrate my efforts regionally, or do I make the plunge into expansion and head down the branch path? Some distributors opt for the acquisition route, others prefer the homegrown method of opening new locations in another geographic region. From a marketing perspective, branching can be a great way to pick up the additional sales afforded to local stocking facilities. Your organization may have a substantial base of existing sales in a particular region. It is currently

In most distributorships, sales has a very loud voice. Arguments to pick an incremental percentage of sales growth in a region steamroll the voices of operational reason and net profitability. Let's face it, some of us add locations to look and feel bigger than we really are. I have been told that in some cultures, the number of branches one possesses is a sign of virility. Ok, I made that one up. I have witnessed, and been party to, a certain chest puffing at national conventions. "We are having a really great year, we opened 3 new locations." This also tends to excite our vendor partners. More outlets means more sales opportunities. Who cares if they are profitable? We do.

Owners care about profitable locations. I would not suggest that they are immune to the excitement surrounding the prospect of a new location; but, the financial performance becomes a real factor in measuring the success of a branch location. Branch locations need to be highly profitable in order to offset the management headaches that they provide. It is a well known fact that the further away you get from the mother ship, the branch becomes more difficult to manage. The physical visits to the sites, the data equipment necessary to communicate and the logistics of transferring product all play into the hassle factor associated with branch locations. For those of you considering opening your first branch, become really familiar with the term "transfer". This word, more than any other, will dominate more future operational meetings in your organization.

In order to make managing a branch more practical, we look to employ an individual who will manage the daily functions of the branch so that we don't have to. Hiring the right branch manager has more to do with the eventual success of the location than you think. While their first responsibility is to increase sales, they must also be charged with managing the financial assets located in their four walls. This is the most overlooked area in branch management. In many cases, our branch inventory asset is very poorly managed. Branches become havens for dead inventory, surplus inventory, items way outside of your core competency and general inventory inaccuracy. Unfortunately, we tend to pick our branch management from one particular job title: sales.