What Is Direct Store Delivery?
Direct Store Delivery Defined
Direct store delivery is a supply chain strategy utilized by distributors to get product directly from their warehouse to the retailer while skipping with the retailer’s distribution center. Direct store delivery or “DSD” is a strategy generally used by the food and beverage industry to replenish previously sold consumable products at a convenience store, super market or restaurant.
Who should implement a direct store delivery strategy?
Direct store delivery is widely implemented by distributors that manufacture and inventory a variety of consumable food and beverage products.
How does direct store delivery work?
Direct store delivery includes at least one physical warehouse and one mobile warehouse. In the morning, the distributor will transfer inventory from their main warehouse to this secondary mobile warehouse. The mobile warehouse is almost always a van or refrigerated truck with the company’s name and logo printed on the sides and back. This mobile warehouse acts as a mobile point of sale that visits each customer on a weekly, biweekly or monthly basis. Each mobile warehouses is piloted by an RSR (route sales representative) who is trained to sell, up-sell and cross-sell products to new and existing customers. The RSR is assigned to a route that covers a particular area of the city, county or state.
What does an RSR do throughout the day?
An RSR has two simple tasks throughout the day: Service customers on his route and find new customers to service. When the RSR first arrives at a stop, he will go in and physically count the inventory remaining on the shelf or display. With this information the RSR is able to generate an invoice for that customer containing the quantities of cases or units of merchandise that will be replenished. The driver will then go out to the truck, pick the invoiced quantities and bring them back into the store. He will then give the invoice to a receiver/manager who will sign the invoice, accept the inventory, and at times make payment depending on the customer’s terms. After completing his route, the RSR returns back to the warehouse to close out his day. The close involves the reconciliation of inventory and payments collected throughout the day.
Why should you do direct store delivery?
- There is no better way to merchandise your products. When you go through a retailer distribution center, you leave it up to the retailer to replenish sold inventory and merchandise your product. Remember that the retailer’s priorities aren’t the same as your priorities. This means that you may be leaving your products to be merchandised by an 18 year old who won’t have your business’s best interest in mind.
- Direct store delivery allows you to give incredible service to your customers. Let’s face it, most products are commodities in a free market like ours. Therefore, the only way to compete is to be able to provide differentiate your business by providing better service than your competition. The direct store delivery strategy enables you to be able to get product to your customers any time and service your customer whenever you are needed. This builds trust and almost always yields long term relationships that result in massive profits.