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May 11, 2013, 02:59:21 PM Last edit: May 11, 2013, 03:31:06 PM by Viceroy |
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What is a distributor? How do they work? Why should I use one?
Distributors can be thought of as warehouses which store and then re-distribute the products within.
The way AMD, maker of your favorite video card, works is that they do the design and create the ASICS and reference design PCB's then they send the specifications off to partners who customize and try to improve upon the core design. In the bitcoin world you should think of Avalon as the AMD.
These partners ((Sapphire, PowerColor, MSI, etc) or (bkkcoin, burnin)) then manufacture their own custom designed PCB solution and send them to distributors. The distributor is the last part in the chain before getting a product to the public. The distributor warehouses the ready to sell product and ships it to the retail store in smaller bundles. Who then sells to the public in still smaller bundles. While it is theoretically possible to sell directly to the end user this is typically not the way large companies operate and there are great benefits to working with local distributors.
Some of the advantages of working with a local distributor are:
1) Improved Cash Flow. A distributor will typically provide a portion of the capital upon order with additional payments tied to the actual resale to the end user. (Pre-order with partial payment with monthly payments at fixed interest or lump sum payment upon final sale).
2) Working with somebody who understands the market. Here's a perfect opportunity for BFL. Clearly they have no customer service skills, they are an embarrassment tot he community to be frank. They could use a distributor to separate their lack of social skills from their technical team. Another perfect example is Avalon themselves. The engineers at Avalon communicate horribly. Their english is broken and they lack basic communications skills as demonstrated by their inability to either get on the telephone or return a single email. A company like that desperately needs a distributor to insulate the engineers from end user customers who might tend to go 'ballistic' when their emails are ignored on their multi-thousand dollar purchase.
3) Shipping. Avalon is having great difficultly moving their product from the chip manufacturing facility in Taiwan to the shores of the USA. There was even a post by the main engineer where he stated they were needing to bribe government officials and there appears to have been sabotage during their recent shipments with severe damage to heavy metal cases. I guarantee you that a company Based in the USA will not have such issues, we'd simply hire fedex (not the cheaper DHL) and get the job done. Or FEDEX would pay us the value we declared prior to shipment.
These are some reasons you might want to work with a distributor but there are many more.
If you have any interest please PM me or post below. What we need to work with a distributor is the following:
1) an end user retail price (manufacturers suggested retail price). 2) a steep discount from that price for buying in bulk lots. 3) a commitment that you will not sell to any others in our 'territory'.
If we are going to put up any capital on our part these are are requirements.
We are speaking with several manufacturers of products right now, would you like to be among them?
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