Distribution Opportunities in India

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...

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 fo...

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...

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 bindin...

Indian companies, specially FMCG companies today are staring at a major disruption in their distribution model. Other than some basic technology interventions to track primary (sales from the FMCG company to their Distributors), and in some cases, secondary sales (sales from the Distributor to the Retailers), very little changed over the decades. Products go from brands’ manufacturing facilities to their Distribution Center (DC), on to C&F agents in each state, on to the hundreds of Distributors (DB) in that state, and finally on to the retailers, where consumers/shoppers purchase them. The primary reason for the lack of change is the more or less static retail environment we have seen –close to 90% of retail even today is dominated by mom & pop outlets, or what we call GENERAL TRADE (GT) in India, this was as high as 98% till a decade or so ago. Looking at the evolution of FMCG Distribution in India since 1950, we can categorize it in the following categories: Distri...