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Distributorship and Dealership Business Consulting

Distributors & Dealers Industry

Who are distributors and dealers? Defining by a standard approach

Distributors are intermediary business entities through which product-based companies move their goods closer to regional or retail markets. Distributors act like extended arms of companies in the supply chain with defined business relationships. But distributors do not engage in retailing. They are only the next step after manufacturing. Distributors purchase, hold and sell inventory to wholesalers, dealers, and retailers. They have to maintain warehousing and logistics capabilities to store bulk inventory for further distribution down the supply chain. Because of the crucial role played by distributors, companies work closely with their distributors and have business priorities attached to them.

Dealers are the intermediaries or retailers who source goods from distributors or even companies. Thus, they could be selling directly to retail customers or act as a supplier for wholesalers and retailers. But unlike distributors, dealers need not have a close and exclusive working relationship with companies. Neither are they bound to deal with products of only one company.

The number of intermediaries present in a supply chain depends on the complexities in accessing the retail market. That also affects the kind of business relationship a company will seek to have with their distributors or other intermediaries. A small company operating within a small geography need not appoint exclusive distributors and dealers. They can directly send their goods to retailers with their in-house distribution and logistical capabilities. But for a giant FMCG company, the supply chain is much more complex and involves many intermediaries.

I) Challenges faced by Distributors & Dealers

#1. Inventory Management

Inventory management is the heart and soul of the distributorship and dealership business. Here, volumes are high and the margins are thin. An important part of inventory management is keeping and maintaining accurate records of inventory based on necessary classification standards. Most dealers and distributors still work in unorganized manners. The records are still being manually maintained. In many cases, physical stock verification has not been done for years. And in the absence of any defined processes combined with a lack of automation, it is common to see dealers and distributors accumulating excess inventory, storing damaged stocks, and harbouring unaccounted inventory.

#2. Cash Flow Management

Despite doing good business on paper, many distributors and dealers are not efficient with their cash flow management. Liquidity crisis is an indicator of this. Cash shortage due to lack of sales is a different thing. But when it happens due to lack of proper planning and policies pertaining to cash flow management, it calls for introspection. Experts often attribute this to the pursuit of achieving more sales, thin margins, and unorganized ways of working. An imbalance between credit and debt cycles can also cause liquidity problems.

#3. Warehouse Management

Layout planning is a critical component of managing warehouses and distribution centres. But what is often observed is that most small distributors and dealers pay little attention to layout planning. Such warehouses are being maintained in unorganized ways. Areas within the warehouse are not strictly defined. There are no rules pertaining to the movement of people and inventory within the warehouse. Safety goes for a toss. Available spaces are not being properly utilized. Warehouses run below their holding capacities. This also affects purchase planning and logistical operations. Eventually, it shows up in slow order processing and fulfilment.

#4. Upstream Competition

With innovative business models and the aid of superlative logistical and technological developments, more manufacturers now seek to reach out directly to retail customers. It lets them build a direct relationship with its customer base. With a lesser role of middlemen, companies can keep their prices competitive. This is beginning to put tremendous pressure on traditional distributors and dealers to bring reforms in their business and operations. Any major overhaul in business requires sound strategies and planning. Running a business successfully is one thing, reforming it quite another. And reforms have become necessary for distributors and dealers to remain sustainable.

#5. Changing expectations from customers

With the power of internet-driven proliferation of information and higher emphasis on consumer rights, businesses cannot afford to remain gullible in the face of customers’ expectations. Customers are now more examining when buying products from retailers. They will rather not buy a product that does not meet their expectations and priorities. Or will get it from another retailer. This burden of fulfilment has shifted to distributors and dealers through retailers and eventually, to the manufacturers.

#6. Meeting the inventory, distribution, and delivery standards of eCommerce

ECommerce has affected the standards of distribution and delivery for traditional manufacturers and other intermediary entities in the supply chain. To compete effectively with eCommerce-based business models, distributors and dealers now have to maintain adequate inventory levels to meet a wide-ranging demand of goods from retailers and retail customers. If they cannot, customers will go to another retailer or check their online buying options. To ensure that goods are available to customers in the physical retail stores, manufacturers and distributors have to also ensure accuracy of performance in many areas. These areas include demand forecasting, purchase planning, logistics and transportation planning, warehouse management, order fulfilment processes, payment clearances, etc.

#7. Having the right software platform

Business processes that run on the right software platform perform better in terms of speed and accuracy. But having the right software platform is important. Every distributor has to maintain unique operational standards in various functions of the business. These requirements emerge from companies/manufacturers as well as the business requirements of the distributors. To identify the right software solution for the business, the software specifications have to be identified and defined. Having a software that does not serve the business requirements is futile. But before that, the business processes and operations have to be well-defined. The software will do what it is being asked to do. So, the software must be told in technical language the flow of work or how the processes and operations are intended to be executed. This can be achieved by using Standard Operating Procedures (SOPs).

#8. Going down with the ship

Distributors and dealers are reliant on the demand and performance of the manufacturing brands they represent. If a brand takes a beating, the distributors and dealers also get to face the same backlash. It is not rare to see these businesses giving up distributorships and dealerships of brands that no longer enjoy a healthy market share. Businesses should consider all the possible scenarios when they are developing their business models. Getting a distributorship and dealership of any reputed brand often involves significant investments and long-term commitments.

Why YRC

Established in 2012, we are a boutique retail and eCommerce consulting firm with a developing international presence. We have consulted 500+ clients in 20+ verticals. For distributorship and dealership businesses, we provide a wide range of business consulting services keeping in mind the unique and evolving requirements and challenges of each industry and each client. We engage professional and expert distributorship and dealership business consultants in our projects.

From market research to SOP manuals, we help distributors and dealers establish a robust foundation of business from the word go. In market research, we help clients gain meaningful insights and understanding of the target market. We also present recommendations and CTAs for better business planning and formulation of marketing strategies.

We provide expert assistance in developing competitive business models. Considering the changing dynamics of the distributorship and dealership business, we aim to develop business models that stand on strong UVPs (Unique Value Proposition). We also define the roadmap of value creation and the network of internal capabilities.

Whether it is a new business or an existing one going for expansion, YRC helps them develop the required financial and commercial projections and assessments. These assessments are useful at revealing both the short term and long term financial implications of the intended business projects and decisions.

Our omnichannel consulting services help clients embrace eCommerce and digital transformation. We help traditional enterprises identify how they can meaningfully and strategically adopt eCommerce to modernize their business. Our services cover digital marketing, CX consulting, omnichannel retailing, digital analytics, and more.

Given the importance of efficiently managing the physical space in warehouses, our layout planning experts assist clients in designing an efficient layout plan for their warehouses. Achieving space optimization and smooth warehouse operations remains our default objectives. Other important aspects like safety and mobility are also addressed.

Last but not the least, a crucial part of our services is SOP design and development. Here, we define the business processes to serve as an operational roadmap and benchmark for performance and output. The eventual goals are to help businesses become process-oriented from the inside out and remain scalable and growth-oriented.

To know more about our distributorship and dealership business consulting services or if you have any specific queries for our team of distributorship business consultants or dealership business consultants, drop us a message and we will be happy to get back to you.

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We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.