What should I consider while building a successful distribution channel?
Every business requires a successful distribution channel to expand and grow across India when engaged in selling or manufacturing. A distribution channel is nothing but how you deliver your products or services to your customers. Having a successful distribution channel with strategies means that you can get your products and services to your customers as efficiently as possible.
It is essential to maintain business health in the long term. Your business will have no future if there is no strong distribution channel. A strong distribution channel results in more customers; more customers means more sales and ultimately more revenue. Your existing market might look saturated; in such a case, you have to look for new markets for healthy sales growth.
If your distribution capacity is good in the local market, try to sell overseas and in other cities/states. If needed, take help from distributors and wholesalers who act as an intermediary and help you grow more sales at zero cost and risk. Now, the question is - how to find a reliable distributor and wholesaler across India?
Fortunately for you- CollabAct takes care of this problem. By joining CollabAct-you will find a huge number of distribution partners. CollabAct will support you to develop a network in whichever geographical location you want to expand. CollabAct will connect you to a Business Influencer in your required city.
These influencers are not becoming your distributor channel, but they become your business extension in that particular location. Being local, they have a better idea of the market and know who can buy your product or services. They become that local resource for you, whom you always wanted in your team. Here, you don't have to set up an entire channel, and it is also very cost-effective.
Any business person needs to understand how distribution channels work in India and how to build a distribution channel at a low cost and within a short time frame. You will need to have pre-planned strategies.
Here is a list of essential steps that you need to follow to build a successful distribution channel across India:
1. Make strategies: Put your best foot ahead and start with a market you know well. The most sensible starting point will be to initiate with your hometown. Even if you have a dedicated distributor appointed there, explore the hidden prospects in the market around you. Once you have covered distributors of your city or state, you can start with the adjoining one.
2. Analyze market first: Your first preference should be to look over the market then products or services. Every market is not the same because some have more potential than others, select target markets based on your market search. Then find distribution partners associated with that market.
With CollabAct, you get an advantage of location-based search for your distributors. Distributors often choose products based on demand, margin, and criteria. They check if the product is stable in the downstream retail market.
3. Start negotiation: Once you have selected the target market, start calling distributors matching your requirements and engage them in negotiation. Distributors might have various queries related to your products or services.
4. Do not treat distributors as your customer: Several manufacturers often make this cardinal mistake of treating distributors as customers. Treat them as a part of your extended family. You need to encourage distributors, provide support during the initial days, and build a relationship.
Remember, a successful distributor is a beneficiary situation. A distributor's success is your success and the company's success. With CollabAct, Business Influencers don't become the outside distributors with whom you deal; they become part of your team. They work as the extended hands of your family.
5. Equitable distribution agreement: Whack a balance between your interests and distributor in the legal agreement, do not make it lean on one side. It will impact your relationship if it is a long-term relationship. So, if the manufacturer is demanding a security deposit - make sure to do it.
Remember, if a successful distributor leaves your company and joins hands with competitors, it is the company that suffers the most. So focus on developing a win-win situation.
6. Strong market support: A product or service is sold based on market strength. Every distributor needs market support. Big companies often do promotions and advertisements of their products or services. Distributors take advantage of that to sell those products or services to retailers.
However, in such cases, small businesses suffer as they cannot afford expensive marketing campaigns and advertisements. So engaging with CollabAct can be your way.
Supply chain strategy: The cost of transportation increases when the distribution network extends. To cut down the additional supply chain and transportation expenses, you need to appoint several intermediaries. Once distributors start operation, find ways to create a strong backbone that assures a smooth supply of products without taxing your products or services.
Appoint super stockists; who are independent business agents and work between producer and distributor. Remember to appoint the distributors in incommunicable areas to make it easy to manage even in the future.
Developing a distribution channel is a long-term job for any business. It requires expert assistance along with logistic strategies and planning. But at the same time, it is essential to set up distribution channels to maintain the overall health of any business.
Building a successful distribution channel and expanding it ensures a growing customer base & results in sales growth and ultimately high revenue. With the support of CollabAct, you can have your people in entire India to make your business grow.
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