Direct Store Delivery (DSD) versus Centralized Distribution

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Managing a retail operation is a full-time endeavor. You need to create employee schedules. You need to deal with customers. You need to keep an eye on profits and losses. But most importantly, you need to track your inventory to make sure you’re keeping the items stocked that people come to you to buy.

That’s where understanding the distribution system is vital to your business’ success. There are several variations of retail distribution, but the two main approaches include Direct Store Delivery (DSD) and Centralized Distribution.

Under the DSD model, each manufacturer of the products you carry ships merchandise directly to your location via a distributor. That supplier/distributor checks inventory, orders stock, unpacks pallets, assigns shelf spacing, stocks shelves, removes expired or outdated stock, sets up promotional displays, and displays pricing, among other things.

With Centralized Distribution, inventory is shipped to a central location where it is warehoused until needed. It is then shipped to the retailer when ordered by the store manager or someone else in charge of inventory. Through this method, the retailer is fully responsible for everything mentioned above that manufacturers handle via the DSD method.

With that in mind, Atlantic Dominion Distributors is a big fan of the Direct Store Delivery model because it frees up our retailers from handling tasks that take them away from serving their customers. A few other reasons we utilize DSD:

  • Using a centralized warehouse model means products are essentially being shipped and delivered twice. This doubles the chances of merchandise getting damaged along the way. It also doubles the chances of scanning errors.
  • Extra steps cost extra money. The distributions centers need to increase product prices to pay for their operating expenses and overhead costs.
  • By cutting out the middle step, DSD gets products to retailers faster. This is vitally important for goods that have limited shelf lives, such as dairy products.

We are a broad-line DSD supplier to retailers all over Virginia and North and South Carolina, which means we buy direct from more than 200 manufacturers. We then separate direct manufacturer shipments into smaller quantities to ship directly to our customers. By consolidating our product shipments to retailers, we eliminate the need for the many DSD vendors a retailer would need. The consolidation directly benefits our customers through lower receiving costs at their location, lower cost of goods as delivered, costs are spread across all items, and we can increase the frequency of deliveries as needed.

Atlantic Dominion Distributors is your one-stop supplier of multiple goods and services. Let us take inventory headaches off your daily list of things to do by providing you with Direct Store Delivery. Then you can spend more time concentrating on doing the other things you need to take care of to make your business successful.