Relations with Distributors:
Key Problems within the Channel
Let's talk about reducing investments in traditional retail and about tools that help the manufacturer maintain profitability in the channel. The turnover of non-chain stores and small retailers is reducing from year to year. Therefore, FMCG manufacturers are changing their approaches of working with traditional retail. When interacting with the largest market players, we are faced with three main strategies aimed at reducing costs.
- Strategy No.1 -
Staff reduction, using tools for ordering goods by the staff of retail outlets, marketplaces, replacement of field employees by telesellers.
- Strategy No.2 -
Switching from the exclusive trading teams to general price list ones.
- Strategy No.3 -
Complete rejection of proactive work in the channel, transition to passive mode.
Using these strategies, manufacturers transfer most of the levers of territory management to distributors.
And the loss of control over distributors can lead to a significant drop in sales in traditional retail.
How not to lose at non-chain retail?
The most successful players in the FMCG industry are switching the monitoring of distributors to automatic mode. This allows (with minimal resources) to maintain the manageability of the channel, quickly respond to acute situations and make adequate decisions.
The first stage of such a project is the formation of an indicators list to track problems with distributors. We want to share our version of such a list. When compiling it, we relied on the experience of the FMCG, DIY and telecom market.
CHEKLIST
«14 main indicators of distributor efficiency»
«14 main indicators of distributor efficiency»
How to digitize distributor control?
Let's see how it works with real examples.
One of the most important indicators for the manufacturer is the level of stocks in the distributor's warehouses. In manual mode, you get this data at best once a week. In automatic mode - daily or in real time. In the ecosystem from the Technopeak development team, your "window" to the distributors' warehouses will be the "Warehouse Balances" report, which will show the current balances of all goods for each of the distributors.
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