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Why Distribution Negotiation Fail And How To Safeguard Success

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Manufacturers and channel partners are two sides of same coin - one produces and the other sells. Together, they make a successful business entity. Though the relationship is mutually beneficial and one should court the other like a perfect marriage - in reality, it does not happen always.

As part of vanik.com online platform - everyday we come across large number of manufacturers looking for channel partners - as also eager channel partners seeking suitable manufacturers. We connect the two and many of them manage to build successful distribution channels - benefiting both partners. However, in several cases, in spite of best intentions on both sides - deals do not materialize.  Why does it happen ? What are the deal breakers in manufacturer - distributor negotiation ?  Based on my research - here's a short list that both manufacturers and channel partners should be aware of to avoid future disappointment.

This Is Not A General 'Why Deals Break' Type Article
A deal may break…

How Not To Fail - Lessons For Start-Up Entrepreneurs

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Entrepreneur has a dream - to create next Airbnb or Uber. Founders have bright 'ideas' -  firmly believe their tech start-up can change the market - bringing in millions of dollars. However, in reality,  most start-ups fail. Why such bright and talented group of people fail so often and so miserably ?

To be fair to start-ups - any business can fail. For any new business, the growth path is littered with obstacles, uncertainties and insecurities. A wrong decision at wrong time can kill it, especially during early days. However, even with so much uncertainty and insecurities - most small business survive and manage to grow while most start-up, even with considerable funding, fail.

Many analysts have written volumes on start-up failure. But irony is, start-ups continue to fail even with so much accumulated knowledge on start-up failure. There's a section of society - specially VCs – who believe such failures are OK. They continue to rationalize failure with colourful theories.…

Introducing BazarA2Z.Com - Wholesale E-Commerce Platform

Wholesale and Distribution are two key components of any B2B sales channel. While distribution is more organized and account for lion's share of b2b sales in urban areas - wholesale remains a prime source of retail supply in rural areas. In a country like India where 90% of retail market is unorganized, spanning across millions of small stores - its impossible to reach significant number of stores directly through distributors.

Usually, companies develop strong distribution channel in Tier-1 Tier-2 cities - but as one goes deep in the countryside, dependence on wholesale channel increases. Majority B2B supply to retailers in rural India happens through wholesalers. Typically, a brand selling Pan-India - may have a wholesale component ranging from 20% to as high as 50-70% depending upon category and concerned brand's dependence on rural market.Wholesale Vs. Distribution
Both wholesaler and distributor buys from manufacturer in bulk and sell to retailers. However, the similarity …

Channel Sales In Post Covid Days - How to Prepare

Are You A Brand - Building Sales Channels Across India ? Are You Channel Partner Looking For Distribution Opportunity ? Whether you are a manufacturer, looking for distributors, dealers, wholesalers, agents, franchise or an aspiring business looking for distributorship, agency, franchise - there's huge disruption awaiting you !
The Corona pandemic has disrupted everyday life - from consumer to brands to channel partners - everyone is severely affected. Its no longer business as usual - every business has to change itself to survive and grow in post-Covid days. B2B sales channels are lifelines for any brand. How does one secure existing channels and grow new ones in this changed world ?

Frequent lock-downs and social distancing norms have forced organizations to shift towards digital. As per Accenture research, 46% of SMBs have invested in digital infrastructure for a clear shift towards online and contact-less sales process. In fact, importance of digital channels for B2B sales has…

Are You Ready To Sell Through Distributors ?

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Distribution Channel has the potential to grow sales far beyond local market - propelling your company to new heights. You may just be a decision away from breakthrough in sales - a decision on right distribution channel. In an earlier blog article - I explained what all channels are available for your business and how to select the right combination. ( Please read Your Product Is Doomed To Fail Without Distribution ) You may select right channel combination and Vanik.com can help you find right channel partners. However, is that enough to make you successful ? Regretfully - No. You have to prepare yourself - do necessary homework to ensure success.  So, what homework needs to be done before starting any discussion with potential channel partners ?

1. Commercials - Distributor / Wholesaler Margin The first and foremost task is to decide on margins for channel partners. Low margin for channel partners will help your bottom line but may fail to attract channel partners. Similarly, high…

Your Product Is Doomed To Fail - Without Distribution

Distribution is the backbone of Indian market. It ensures smooth passage of a product from factory gate to retailers across India. No matter how good a product or how competitive the pricing - it’s unlikely to grow big and reach sizeable market without distribution support. Its comparatively easy to drive marketing campaign and create awareness/demand through large spending in Electronic And Print Media - but sales is unlikely to grow if consumers do not find the product in nearby retail store. Online is surely an alternative - but is still in its infancy - accounting for only 2% of total Indian retail market.
So, how does one plan for distribution ? Ensuring a product reaches large number of consumers across a vast country like India using poor infrastructure (transportation, warehouse, cold chain etc.) is a challenge. The challenge gets even more difficult given huge diversity of language, custom and local regulations. Indian distribution industry is highly fragmented - to get prod…