How To Plan Distrbutor Search - A Short Guide

Manufacturers do not sell directly to consumers - they need distribution channels to reach markets. Wider the reach of distribution - larger is the customer base and resultant sales. No wonder, distribution is considered backbone of any market.
However, building distribution network in India has remained an uphill task for small businesses for far too long. Hassles of inter-state trade, compliance with multiple taxation - VAT, CST,  state-specific entry taxes, Octroi, road permit  etc has hobbled Indian SMEs for long. As a result - only large companies like HUL, Colgate Palmolive, Maruti etc could afford to build pan-India distribution channels so far. However, introduction of GST has opened new opportunities  as hassles of inter-state trade is now mostly gone -  creating a level playing field for SMEs. India is now truly a Pan-India market. 
To leverage the opportunity, SMEs need to have a plan of action to locate and appoint dynamic and resourceful distribution partners across India. Let's explore various ways of locating distribution partners and corresponding cost-benefit analysis. 
There are broadly 3 options for locating distribution partners - newspaper advertisement, hiring consultant or search online. Apart from that, a company may decide to hire Area Sales Managers (ASM) at target markets. However, we are not considering hiring employee option because of its capital intensive nature. Here's a comparison of relative merits and demerits of various options:
Comparison
Parameter		 Newspaper
Advertisement		 Consultants Online Portal
(Vanik.Com)
Reach Limited Geographic Reach - usually a city (or particular edition of a newspaper) Even more limited, confined to contacts available with the consultant - may well have used these for others Pan-India Reach, fresh leads added everyday
Targeting Poor Targeting (Large but diffused audience - from students to housewives) Well Targeted depending upon depth of consultant's own database Precise Targeting - pan-India, state, district level, by role such as distributor, c&f agent, superstockist
Response No Guarantee Whatsoever Localized Response From Consultant's Area of Operation Pan India Response with 100% Money Back Guarantee
Speed of Execution Slow - Reactive Process. Not much to do other than waiting for response Proactive, Faster than Advertisement. However, speed may cost more Fastest - Proactive + Reactive, Immediate start with database search
Interactivity Direct but Limited - for a day or two Indirect - Through Consultant Open direct communication through email, phone, whatsapp chat etc.
Discovery Process Transparent No transparency Transparent
Validity 1 Day (nobody reads Yesterday's newspaper) Specific period - may prove very costly for longer periods 3 - 6 months
Cost Rs. 15,000 - 60,000 or more per advertisement Much more than newspaper advertisement depending on period of consultancy Fixed, One Time Cost. No hidden, recurring expense. Starts as low as Rs. 10,000/-
As you can see, online services like Vanik is miles ahead in delivering best solution customized to your needs at lowest cost. You receive best Return-On-Investment (ROI) from online services with assured guaranteed response. What's more - you start locating distributors from day 1 as online portals like Vanik has thousands of leads posted by distributors, dealers, c&f agents, super stockists, PCD, traders etc. from all over India. Dozens of fresh offers are posted everyday. Vanik offers a comprehensive search engine to zero-in on states, districts; select precise roles like distributor, c&f agent, super stockist etc.

  • How Reliable Is The Data 
    • The feedback that we receive from companies advertising in newspapers is mixed. 25-50% responses are irrelevant or of no use (e.g. no experience of distribution, lacks financial muscle etc.). Consultants usually have well researched data from local market. Vanik receives large number of distribution related inquiries everyday, but only those inquiries are accepted where its research team has verified the lead by calling concerned person and collecting useful information like background, experience, kind of sales team, infrastructure available etc.
    • Vanik.com - is India's largest portal on agency / distribution / dealership opportunities. Thousands of agents/ dealers/ distributors visit Vanik.com everyday, searching for suitable products to represent. Since 2004, it has helped thousands of manufacturers/ importers to build agent/distributor network across India.
    • Try Vanik At No Cost - Get FREE Trial Membership  Join Vanik as manufacturer (its free,  takes less than couple of minutes)  and request Free Trial for 15 days. Get help from customer service team on how to make best use of Trial Membership. Online chat line remains open from 10 am to 6 pm. Try this free trial option before investing money on any other avenue. Compare various options for best ROI and chose the one that matches your requirement best. 

Comments

Post a Comment

Popular posts from this blog

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 - ...
Read more

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...
Read more

Are You Ready To Sell Through Distributors ?

Image
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. Simila...
Read more