Music distribution and the distributor's role

With regard to physical product, this is one of the most complicated parts of the record supply chain and can for a major album release, be a huge undertaking.

If the distributor has a modern stock control and information management system, this task becomes much more streamlined and easier to manage. The following processes regarding stock must be executed and/or controlled by any centralised distributor:

1. Creating new album titles on the system, i.e. assigning part-numbers and descriptions and building Bills of Material;

2. Ordering these items from the relevant suppliers (placing purchase orders through procurement)

3. Checking and receiving the stock into the warehouse and onto the system;

4. Carrying out frequent stock counts to control and verify stock movements and quantities (inventory management and control);

5. Entering sales orders from retailers and other customers;

6. Picking and packing of sales orders to be delivered;

7. Generating the necessary documentation to accompany the delivery (e.g. the invoice and delivery note)

8. Generating stock and sales reports as management information for the benefit of the record company;

9. Executing the physical distribution of product, including packing, unpacking, transport/trucking and placement on shelves or in warehouses.

The distributor is an absolutely key player in the physical product supply chain network. It establishes maintains and enhances the record company's distribution network, in order to provide a reliable and cost-effective service to its clients.

The manner in which the final product reaches the market strongly influences the success of its introduction into the retail and dealer channel, thus it is important that the distributor sees to it that lead/delivery times are short, products are in good condition, and contracted pricing is competitive.

With the advent of online digital distribution, the lines have become somewhat blurred. Correctly, the term “distributor” means a distributor of physical product, and the term “aggregator” refers to an on-line distributor.