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Distributors & Dealers Industry

Distributors & Dealers Industry

I) Challenges faced by Distributors & Dealers

#1. Cash Flow Management

Have you ever felt that we are doing good business, but still our vendor payments are delayed??? Stop immediately… Sit back and analyse… What are your capital investments, your operating costs including rent, salaries, interests etc.? Dealers and distributors do fall prey to this trap because of the thin margins and unorganized way of working. YRC can help them to organize and streamline operations for better ROI.

#2. Inventory Management

Inventory Management is the key for dealer & distributor industry as the margins are thin and volumes are high. Inventory Management involves record keeping of inventories in hand, product-wise, category-wise, location-wise and price-wise. Dealers & Distributors still work in an unorganized way where most of the records are manually maintained. In some cases, they haven’t counted and verified stock for years together. Since they do not have an organized way of maintaining stock, most dealers and distributors get stuck up with excess inventories, unwanted & damaged stocks & unaccounted inventory. Obtaining Inventory Control Consulting is of key importance, who can assess the right fit software solutions and define standard operating procedures for Inventory Management and Distribution Centre.

#3. Distribution Center Management

The distribution centre or warehouse layout is made & maintained in an unorganized way. There are no specific areas defined for new stock, damaged stock, defective stock, scrap or stock inward. As the warehouse or distribution center is ill-managed, the operating cost in terms of space and people go high. And since the products are not easily accessible, excess goods are ordered and that affects the investment and cashflows as well. Well organized distribution centre by developing SOPs aligned to efficient layout for flow of goods, is the only way to go forward in this industry.

#4. Choosing the Right Product

Products suitable for distributors and dealers must have a large potential customer base. A distributor is unlikely to do a good job selling a product with only a handful of customers demanding it. Custom tailored products can be harder to sell via distributors. The broader the customer base with standard needs, the greater the value of the distributor network. Additionally, rapid delivery and service should be assured. Downtime needs to be averted and this makes prompt delivery essential. To evaluate whether your product is ideal for a distributor model, rely on a top supply chain consulting company.

#5. Choosing the Right Dealer/Distributor

Digital dealership is gaining credence rapidly. Most industrial producers think of geographical coverage, instead of assessing the suitability of the dealer/distributor for their business model. In restricting themselves to traditional distribution models, the producers neglect to take on an omni-channel approach. Choosing distribution networks is all about understanding what relates to the customer best. For example, companies like Deere and Caterpillar use different distributors to serve different market segments and product categories in the same geographic territories. Producers need to focus on distributors who can serve specialized market segments. Producers should also be aware of market segment potential and geographic territory. Comparing the potentials with actual sales for distributors is the key here.

#6. Life Cycle Changes

Most manufacturers and producers do not understand that selling needs for products change across the lifecycle. The industrial producer has wrong distributors for the stage the product is in, many times. Often, a product unknown to the market requires specialized distributors that provide technical assistance. As more applications for the product develop, however, the know-how becomes widely available in manuals and handbooks, reflecting common knowledge. For any given product, the journey from innovation to obsolete status ranges across 05 to 15 years, and even less in today’s rapidly changing dynamics. One type of industrial distributor could succeed with a product for a long period. As the product becomes standardized and matures, less specialized knowledge is needed to sell it. At different points in time, off-the-shelf delivery times and price may become more critical. Expanding distributors in non-exclusive territories is the key here.

#7. Getting Products Specified

Distributors may not get products specified. In unusual cases, this may not be so. But bear in mind that if specification processes are not carried out, industrial distributors will not receive orders. As industrial distribution channels remain outside the company, management policies governing these cannot be administered and developed routinely. Distributors are independent and own 100% of their business, generally. Industrial producers must develop policies that are in line with this. For formulating the right distribution strategy, industrial producers must know who their ultimate customers eventually translate into. Some producers require dealers to report sales by part number, location of billing and customer, as well as the destination. This helps in providing an effective market analysis for distributors. This information is available from warranties for equipment customers fill in and return to the producer. In the event of distributors accepting large end user accounts, a clear policy is needed regarding account management. For all of this, streamlining policies and procedures through the services of a premier B2B consulting firm is an advisable methodology.

#8. Sales Training

The distributor’s sales reps need training and support. The “franchise them and forget them” approach simply cannot work here. Training distributor sales teams takes time and effort. Producers need to showcase product features and advantages for different situations or applications. The more technical the product, the more time is needed for sales training. Producers must train distributors and customers both. Manufacturers need to provide distributors with field assistance for key accounts. Regional sales teams should accompany distributors on calls, offering technical backup. Manufacturers can support their distributors by supplementing product literature and “Business Playbook” to manage sales leads and inquiries. Technical problems must be solved to clinch sales, and for this, process manuals and handbooks are extremely beneficial.

#9. Tracking the team on-field & training them

The biggest challenge faced by most of these dealers or distributors is tracking the on-field team, giving them targets, monitoring their achievements, training them, building their capabilities and reviewing their performance. This process since not done accurately, the attrition rate is very high and the skill sets are extremely low. Though it looks difficult to get all of this in place, it is actually more methodical. At YRC, we develop SOPs to track your team’s targets, achievements, training, performance and reviewing.

II) Why Opt for Your Retail Coach?

At YRC, we develop SOPs i.e. “Standard Operating Procedures” for ensuring the smooth functioning of distribution center or warehouse in terms of logistics, supply chain, inventory management, HR , Accounts & Finance. YRC helps in developing “Cash Flow Management” strategies to ensure optimum use of your funds. To benefit from the expertise of these specialists and consultants, contact the YRC team today.

III) About Distributors & Dealers Industry

The Distribution & Dealer industry is trying to find a balance between manufacturers that are selling products online, while on the other hand, they are coming up with their own brick-and-mortar stores. In direct contradiction, a rapidly growing e-commerce industry is still in need of space for storage, logistics and distribution. The dealer and distributor industry needs to get organized to cope with the demands. With the average cost of direct sales calls exceeding USD 100, more producers rely on industrial distributors for serving key markets. Through a large network of distributors blue chip companies like Pfizer, Norton, Mead Paper, 3M, etc meet their sales targets.

Even Xerox and IBM deploy independent distributors to market low-priced products. Marketing products through distributors is complex. Placing products with independent distributors, building up considerable inventory, and filling the distributor pipeline are hard, without a warehouse management consulting firm at the helm. While overseeing the process of selling through distributors appears simple, it is fragmented and complicated. Most mistakes manufacturers and producers make in selecting and using distributors, can be corrected through effective evaluation of performance.

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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.