DISTRIBUTOR MANAGEMENT

 DISTRIBUTOR PLAYS VERY IMPORTANT ROLE

IN FMCG BUSINESS
 SELECTION OF GOOD DISTRIBUTOR IS VITAL
IN ORDER TO ACHIEVE TARGETS.
 THIS PRESENTATION IS ABOUT SELECTING A
GOOD DISTRIBUTOR AND CRITERIA TO
SELECT.
 ALSO MANAGING DISTRIBUTORS
EFFECTIVELY TO
 GET BEST BUSINESS OUT OF THEM
UNDERSTANDING DISTRIBUTION
CHANNEL IN F.M.C.G INDUSTRY

FINISHED GOODS FROM FACTORY

↓
C&F, CFA, SUPER DISTRIBUTOR
↓
DISTRIBUTORS
↓
RETAILERS
↓
CONSUMER
DIFFERENT COMPANIES USE DIFFERENT
NAMES

 DIFFERENT NAMES USED ARE

 DISTRIBUTOR.
 STOCKIEST
 DEALER.
 RETAIL STOCKIEST.
 DISTRIBUTION STOCKIEST.
 DISTRIBUTION POINT
DEFINITION OF DISTRIBUTOR

DISTRIBUTOR IS A PERSON OR GROUP OF

PERSONS WHO AGREES TO HOLD CERTAIN
MINIMUM STOCKS, PROVIDE SERVICES AS
PER
COMPANY DEMANDS,AND IN RETURN
EXPECT
REASONABLE “RETURNON INVESTMENT”
DEFINITION OF DISTRIBUTOR

 DISTRIBUTOR REPRESENTS COMPANY TO

RETAILERS IN MARKET
 DISTRIBUTOR IS VITAL LINK IN CHANNELS
OF DISTRIBUTION. FACTORY COMPANY
WAREHOUSE/ C&FA/ SUPER STOCKIEST
/CONSIGNEE AGENT ETC. DISTRIBUTOR/
STOCKIEST RETAILER CONSUMER
 MANAGING DISTRIBUTOR
 MANAGING DISTRIBUTOR BUSINESS IS NOT EASY,

 IT CAN BE MADE EASIER IF MAKE SURE THAT

A RIGHT DISTRIBUTOR SELECTED IN THE RIGHT PLACE.

 IF A RIGHT DISTRIBUTOR SELECTED FOR THE RIGHT BUSINESS, FOR

THE RIGHT TIME AND IN THE RIGHT PLACE, THINK THAT 50% OF THE
TARGET ACHIEVED AND IF DISTRIBUTOR SELECTION SI WRONG 50%
FAILURE COMES ON THIS ACCOUNT.

 DISTRIBUTOR PLAYS VERY IMPORTANT ROLE IN ACHIEVING THE

TARGETS, PRIMARY AS WELL AS SECONDARY.

 AT THE SAME TIME HE ALWAYS THINKS ABOUT HIS PROFITS ALSO.

MANAGING DISTRIBUTOR
 IT IS PRIMARY DUTY AND RESPONSIBILITY
OF A SALES MANAGER TO SHOW PROFITS
AND GOOD FUTURE TO A DISTRIBUTOR FOR
THE SMOOTH RUNNING OF BUSINESS IN HIS
AREA.
 EVEN A GOOD DISTRIBUTOR WILL TURN
INTO BAD DISTRIBUTOR IF DO NOT SEE
PROFIT,AND DO NOT SEE GOOD FUTURE
 IF HE DO NOT SEE FUTURE HE WILL NOT
INVEST MONEY
NEED FOR A DISTRIBUTOR

 THE MANUFACTURER FINDS IT INCONVENIENT

TO SELL IN SMALL QUANTITIES.
 THE MANUFACTURER MAY NOT BE PREPARED
TO GIVE CREDIT TO SUPERMARKETS WHILE
DISTRIBUTOR MAY GIVE CREDIT LEADING TO
INCREASED INVENTORY BY RETAILERS.
 IT IS IMPOSSIBLE TO FOLLOW-UP RETAILERS
FOR A COMPANY IT IS DISTRIBUTOR WHO
MAKES IT POSSIBLE FOR US.
NEED FOR DISTRIBUTOR
 IF RETAILER COMES TO THE DISTRIBUTOR
POINT TO BUY, HE BUYS ONLY SMALL
RANGE OF PRODUCTS.

 IF THE DISTRIBUTOR GOES TO THE

DOORSTEP OF RETAILER, THE
DISTRIBUTOR CAN SELL FULL RANGE OF
PRODUCTS.
NEED FOR DISTRIBUTOR
 BY APPOINTING A DISTRIBUTOR, THE
MANUFACTURER WILL NOT FACE SMALL QUANTITIES
SUPPLY PROBLEM.

 STOCKS STRAIGHT FROM FACTORY WILL COME TO

FIRST DISTRIBUTION CHANNEL I.E., EITHER OWN
WAREHOUSE OR C&FA OR SUPER STOCKIEST, OR
CONSIGNEE AGENT

 THEN THE DISTRIBUTOR BREAKS THE BULK AND

SELL TO THE SUPERSUPER MARKETS IN REQUIRED
QUANTITY
NEED FOR DISTRIBUTOR
 DISTRIBUTOR EXTENDS CREDIT TO
REATAILER AND IN THIS CASE THE
DISTRIBUTOR CAN PUT PRESSURE TO BUY
SLOW MOVING PACKS ALSO AND IS ABBLE
TO INCREASE ORDERS OF RETAILERS
WHICH MAY BE OTHERWISE DIFFICULT
FOR SALES PERSON
 SCOPE FOR NEW DISTRIBUTORS

 POPULATION GROWTH LEADING TO SCOP OF NEW

DISTRIBUTOR APPOINTMENT FOR ENSURIND SUPPLY IN
NEW TOWNS, VILLAGES, PLACES, LOCALITIES AND NEW
MARKETS AND OUTLETS.

 INCREASED AWARENESS THROUGH T.V. CINEMA, AUDIO,

VIDEO AND PRINT MEDIA CREATED THE USE OF NEW
PRODUCTS. THIS RESULTS A BOOM IN THE GROWTH OF
FMCG BUSINESS AND REQUIRE MORE SERVICES AND
EXTENDING BUSINESS TO RURAL MARKET
 SUPERMARKETS/RETAILERS ARE ON INCREASE IN
RURAL MARKET EXISTING DISTRIBUTOR MAY NOT BE
ABLE TO CATER THIS NEED AND THIS CREATES A SPACE
FOR NEW DISTRIBUTORS IN THE MARKET.
SCOPE FOR NEW DISTRIBUTORS

 DISTRIBUTOR OFFERS TO THE RETAILERS A

LARGE VARIETY OF BRANDS SO RETAILERS
DEPEND ON HIM AND AS A RESULT HE IS ABLE
TO PUSH NEW/SLOW MOVING STOCKS TO
RETAILERS.
 THE RETAILERS NEED NOT INVEST MORE
MONEY AND NEED NOT HAVE MORE GODOWN
SPACE, BECAUSE THE DISTRIBUTOR IS GOING
TO DOORSTEP OF RETAILERS AND GIVING THE
STOCKS AS PER THE RETAILER REQUIREMENT
SCOPE FOR NEW DISTRIBUTOR

 IT IS QUITE POSSIBLE WHEN BUSINESS WAS

LOW EXISTIN DISTRIBUTOR WAS SUITABLE
BUT MAY BE WHEN THE SALES VOLUME GO
UP REQUIRING MORE INVESTMENT,THE
EXISTING DISTRIBUTOR MAY NOT BE IN
POSITION TO INVEST MORE MONEY

 THIS IS THE TIME SCOPE FOR NEW

DISTRIBUTOR COMES INTO PICTURE AND
BECOMES NEED OF THE HOUR
CRITERIA FOR SELECTING
DISTRIBUTOR

 INVESTMENT IS THE MAIN ONE TO START ANY

BUSINESS.
 DISTRIBUTOR SHOULD BE FINANCIALLY
STRONG
 DISTRIBUTOR SHOULD BE READY TO INVEST
 DISTRIBUTOR SHOULD BE WILLING TO ADD
NEW COMPANY
 DISTRIBUTOR SHOULD HAVE ENOUGH
IFRASTRUCTURE TO ENSURE SUPPLY TO
RETAILERS
CRITERIA FOR SELECTING DISTRIBUTOR

 DISTRIBUTOR SHOULD ENJOY GOOD

REPUTATION AMONGST RETAILERS
 DISTRIBUTOR SHOULD BE READY TO
FOLLOW COMPANY POLICIES/RULES
 DISTRIBUTOR SHOULD BE GOOD IN
INTERPERSONAL SKILLS
 SELECTION OF DISTRIBUTOR SHOULD BE
BASED ON RETAIL SURVEY
CRITERIA FOR SELECTING DISTRIBUTOR

 SHOULD BE READY TO INVEST IN ALL

PRODUCTS INCLUDING NEW PRODUCTS
 SHOULD HAVE OFFICE/WAREHOUE IN
LOCATION CONVENIENT TO RETAILERS
 SHOULD BE ABLE TO PUT MORE PRESSURE
TO SELL MORE STOCKS IN WHOLESALE
AND RETAIL, TO BARGAIN SHELF SPACE IN
THE RETAILER POINT
HOW TO MANAGE DISTRIBUTOR

 KEY TO REMMBER IS THAT EVERY

DISTRIBUTOR IS A BUSINESSMAN WHO INVEST
MONEY TO GET PROFIT
 ENSURE A AREA ALLOCATION TO HIM IN
WHICH HE GETS A MINIMUM BUSINESS TO
MAINTAIN HIS INTEREST AND HE SEES A GOOD
FUTURE EVEN IF EXISTING BUSINESS IS LOW
 TAKE HIS STOCK STATEMENT AT LEAST
TIWICE A MONTH AND LIQUIDATE THE SLOW
MOVING/NON MOVING PRODUCTS
HOW TO MANAGE DISTRIBUTOR

 NONE MOVING STOCKS ARE DEAD INVESTMENT

FOR DISTRIBUTOR AND VERY PAINFUL FOR HIM
 MAINTAIN INVENTORY WITH DISTRIBUTOR
ACCORDING TO SECONDARY SALES
 MAINTAIN LITTLE HIGHER INVENTORY FOR FAST
MOVING PRODCUTS SO THAT SALES DO NOT
SUFFER ON ACCOUNT OF NON AVAILABILITY
 ENSURE AVAILABILITY OF ALL SKU WITH THE
DISTRIBUTOR,ONLY THEN YOU CAN SELL ALL
SKU
HOW TO MANAGE DISTRIBUTOR

 ENSURE WEEKLY SALES CLOSING INSTEAD

OF MONTHLY CLOSING,THIS WILL REDUCE
INVESTMENT OF DISTRIBUTOR AND
REDUCE YOUR RISK FACTOR BECAUSE IN
THE MONTH END DISTRIBUTOR WILL BE
UNDER PRESSURE FROM MANY COMPANY
AND MAY NO HAVE ADEQUATE FUNDS FOR
YOU.
 FOR THIS YOU NEED TO TAKE
DISTRIBUTOR INTO CONFIDENCE BY
SHOWING HIS BENEFITS
HOW TO MANAGE DISTRIBUTOR

 MAINTAIN GOOD PERSONAL

RELATIONSHIP WITH DISTRIBUTOR AS IT
AWAYS PAYS WHEN YOU NEED EXTRA
FAVOUR FROM HIM
 DRAW A LINE- PLEASE REMEMBER THAT
DISTRIBUTOR IS WORKING FOR COMPANY
BUT NOT WORKING UNDER YOU,SO DON’T
TRY TO TREAT HIM LIKE YOUR SUB
ORDINATE OTHERWISE EGO CLASH WILL
SPOIL RELATIONS AND BUSINESS BOTH
HOW TO MANAGE DISTRIBUTOR

 NEVER USE UN PARLIAMENTORY LANGUAGE

WITH DISTRIBUTORS,YOU HAVE NO RIGHT TO
DO SO
 DO NOT DO ANY LOSE TALKS
 DO NOT WASTE HIS PRODUCTIVE TIME BY
SITTING IN HIS PREMISES UN
NECESSARILY,WASTING HIS AS WELL AS YOUR
TIME,BEING A BUSINESS MAN HE WILL NOT SEE
THIS APPROPRIATE AND WILL NOT APRRECIATE
 DO NOT TAKE CASH FROM DISTRIBUTOR
HOW TO MANAGE DISTRIBUTOR

 DO NOT JUST TRY TO CHANGE DISTRIBUTOR JUST

BECAUSE OF EGO PROBLEMS RAHTER SOLVE THE
PROBLEM
 EXISTING DISTRIBUTOR WILL HAVE ESTABLISHED
ADVANTAGE THAT HE KNOWS THE CUSTOMERS
AND HE HAS ESTABLISED RELATIOSHIP WITH
CUSTOMERS WHO MAY MOVE OUT WITH HIM
 DO NOT TRY TO CHANGE DISTRIBUTOR JUST TO
OBLIGE DISTRIBUTOR FROM YOUR OLD
COMPANY AS IT IS A COMMON MISTAKE BY SALES
MANAGERS
HOW TO MANAGE DISTRIBUTOR

 ENSURE PROMPT SETTLEMENT OF CLAIMS

OF DISTRIBUTOR, PLAY A ROLE OF GLUE
BETWEEN THE COMPANY AND
DISTRIBUTOR YOU WILL BUILD YOUR
REPORT ALSO,REMEMBER PENDING
CLAIMS ARE DEAD INVESTMENT FOR
DISTRIBUTOR
AND IS PAINFUL TO HIM
SUMMARY
 SELECT RIGHT DISTRIBUTOR
 SHOW HIM PROFITS
 MAINTAIN CLOSE LOOK ON STOCK MOVEMENT
 ENSURE GOOD SECONDARY SALES
 BE A FRIEND NOT BOSS OF DISTRIBUTOR
 AVOID LOSE TALKING
 ENSURE TIMELY SETTLEMENT OF CLAIMS
 KEEP YOUR DISTRIBUTOR MOTIVATED BY SHOWING HIM GOOD
FUTURE WITH YOUR COMPANY
 DISTRIBUTOR IS YOUR BUSINESS PARTNER WHO CAN HELP YOU
IN SEELING THROUGH HIS OWN ESTABLISHED CONTACTS
 FOLLOW THESE GOLDEN RULES AND YOU WILL BE ABLE TO
MANAGE DISTRIBUTORS EFFECTIVELY