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How To Write Distribution Contract - A Check List

Manufacturers create brands for building unique product identity. Brands build specific values around them to attract and retain targeted consumers and need a path or channel to reach consumers across the country. A channel consists of several organizations or entities - all aligned to a common goal of creating a path for the product to traverse from factory gate to consumer's door step.  Each entity in the channel is independent, having specific interests. Managing relationship between manufacturer and channel partners plays a key role in sucess or failure of a brand. Management books are full of examples of how lack of distribution channel killed good products.

The relationship between brand and channel partner should be based on a clear understanding of each other's roles and responsibilities. When formalized in a written agreement between the two parties in a legally binding format that is enforceable in a court of law - the agreement is called contract. A legally binding…

How To Create Distribution Plan For Your Business

Customer is oxygen for business. More customer means higher sales and thus better financial health. To remain in business - manufacturers have no option but to seek out more customers in larger markets. Effective distribution strategy enables a business to achieve this goal without significant investment in sales infrastructure.

So, how should a business go about building distribution channel ? The first task is to create a distribution plan charting a path for accessing market. Ideally, businesses should consult experienced distribution trade professionals to prepare customized distribution plan matching their products. Failure to do so may lead to loss of money and wastage of resources or in worse case - loss of brand image and reputation. 

This article outlines essential parts of a distribution plan. In case you need a customized distribution plan prepared by experienced distribution trade professionals - please tell us here.
1. Analysis Of End-User Foundation of a distribution…

How To Start Distribution Business With Limited Capital

Every week, I receive many mails and tel calls from enterprising youth, experienced businessmen, retired professionals with vast domain knowledge - inquiring how to enter distribution trade. They are enthusiastic entrepreneurs - want to start a new business or expand existing one - with limited capital. For newcomers, its always better to start a business in service than manufacturing as the later may demand larger investment in terms of money, effort and other resources. This article describes what's necessary to start a distribution business with modest capital.

The first and most vital requirement of a distributor is to have a downstream retail chain where he/she can sell the merchandise. Essentially, distributor is a middleman - a re-seller. He/she has to resell the products coming from manufacturer to retailers. So, building a good relationship with retailers in the region is the starting point in the life of a distributor.

Developing this ability does not require financial…

How Distributors Add Value In Manufacturing - Few Hidden Facts

We all know distributors help manufacturers by re-selling products. But there are many other ways a distributor adds values in manufacturing process that need to be understood. Its true, distribution channel costs money - sometimes as high as 40% to 50% of MRP. But a properly aligned distribution  channel also adds enormous value through tangible and intangible ways. Knowing these facts can help manufacturers make optimum use of their distribution channels. This article describes some known and some not-so-known facts about how distribution channel adds value in manufacturing.
1.  Bulk Breaking Companies produce in lots, but consumers buy in single piece. So, we have retailers who buy in moderate quantity and sell in single units. However, the nature of manufacturing is such that, its     completely uneconomic for even a small or medium sized company to sell to retailers. Distributors break manufacturing  lot into pieces or dozens or whatever units the retailers wants them in. Its a …

Future of Indian Distribution - Huge Disruption Ahead

How To Find Overseas Channel Partner

In every country or market - whether developed, emerging or underdeveloped - consumer products eventually go through some form of distribution process. The distribution chain involves movement of goods from factory gate or shipping yard to consumers' doorstep. Success in international market largely depends on entering the distribution chain with suitable overseas partner who can successfully introduce your products. There are several models and resources - one can select depending on own organizational resource.
1. Wholesale Model Wholesaling involves selling in bulk to an overseas wholesale partner who has access to downstream channel for re-selling the goods. The wholesaler buys in bulk from Indian seller and takes complete responsibility of selling the goods in his/her own country. Post sell, the Indian seller is free of anxiety, but loses track of how his/her products doing, such as - at what price the consumer is buying, margin of intermediates, consumer feedback etc. 
Sour…

Distributing Products In Overseas Markets - Are You Ready ?

Indian businesses have always aspired to sell in overseas markets. For a successful entrepreneur, there's nothing more exciting and satisfying than conquering foreign market. Higher margin, easier bank credit, tax free revenue and various export incentives are some of the attractions of overseas markets. Besides, thriving overseas presence is an insurance against any instability in domestic market. However, not much information is available on the topic, specially for small and medium Indian enterprises.

In a series of articles, we shall discuss preparations and planning required before venturing out to overseas markets, various routes for overseas entry with comparative advantages/disadvantages and sources of information. In preparation and planning stage - a business must objectively assess whether its ready for overseas market. To help a business evaluate its position - here's few pointers.

1. Domestic Distribution First - Overseas Comes Later A business must establish its…