Top reasons How fmcg salesmen change distributors all newbies must know why ?

Why International Companies in FMCG Change Distributors So Frequently.

FMCG companies today world over 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 their warehouses in each state, on to their few distributors 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, or neighborhood and open market outlets, this was as high as 98% till a decade or so ago.

How does an FMCG distributor model work in India?

Fmcg Distribution Pictorial of various process involved.

Role of Distributor in FMCG Channel

Distributor is the keystone to FMCG business sector. FMCG distributor generally has exclusive rights of distributing a set of products in a defined geographical location. He will be responsible for the redistribution of the products, market coverage and retail penetration. Few a times, distributor is appointed to serve a particular clientele base such as canteens, hotels, restaurants etc.

Below given are some of the functions which a distributor plays in FMCG channel:

  • He purchases/stocks products in bulk quantity from the manufacturer and distribute/sell them to retailers in small quantity.
  • He takes orders from the institutions & retailers and ensures quality and on-time delivery of products.
  • He maintains products stock and the requirement of outlets are managed through their own stock.
  • He provides needed finance for allowing credit to the retail market.
  • He expands the retail market (by opening new outlets) as well as the retail penetration of various products.
  • He does field level marketing activities like inshop and H2H (Human to Human promotion) etc.
  • He helps in minimizing consumer complaints and resolving them.


So basically it was the broad role of the distributor in FMCG Industry. Becoming distributor of FMCG products is a profitable option. Start your search now for the potential brands!

Looking at the evolution of FMCG Distribution  since 1970 we can categorize it in the following categories:

Fmcg goods and retailers

Distribution 1.0: (1970 to 1996) this entails traditional distribution model elucidated above, and very little changed in the model.


Distribution 2.0: (1996 – 2002) This was the period of small tweaks, where a) Company Sales reps were transferred to the Distributor for better supervision and management, called Distributor Sales Reps (DBSRs). Moreover, some leading companies starting to divide the sales teams into category teams, still primarily serving the General Trade, to focus on each category & SKU. b) We also saw leading FMCG companies adopt technology to track primary sales at both the distributor and branch level.

Fmcg goods-Merchandiser in a retail store

Distribution 3.0: (2002– 2020) This has been the period of major change, with Wider adoption of technology to track inventory & sales (primary and secondary) through the implementation of Dealer Management Systems (DMS) and Sales Force Automation (SFA) Launch and rapid growth of Modern Trade (MT) from 2005 onwards, followed by e-commerce in the last five years. FMCG companies outsourcing their Sales Reps to third parties to reduce complexity for General Trade coverage, while also deploying Sales promoters in-store to engage with end consumers/shoppers to improve the shopping experience.

Today, however, the time tested FMCG Distribution model may experience massive disruption, and this is likely to continue if we go by what has happened in other emerging markets like Central Eastern Europe, Russia, South East Asia & China, and India.


On the demand side, a lot of new retail channels are emerging that are disrupting “Where” and “How” shoppers are shopping. We have seen the growth of modern trade in the last decade, e-commerce/online retail in the last 5 years. As shoppers move to an “Omni” mode of shopping, expecting the products to be present “when” and “where” they shop, FMCG companies will need to adapt their distribution models to enable this.

On the supply side, factors like changing aspirations of distributors, changing role of modern trade as a distributor, increasing complexity of FMCG business due to increasing categories and skills, increasing competition for shelf space in General Trade, rise of private labels, and the rise of new distribution “aggregators” are impacting the traditional distribution model.


Thus, distributor churn is increasing rapidly, ranging from 15-30% annually. It is also becoming increasing difficult to replace exiting distributors as the distributor community continues to shrink. This is likely to have a major impact on brands’ ability to increase (or even maintain their direct distribution or coverage.)

In addition, Sales Force turnover (across all levels, and especially at the field sales level) is also increasing, it can be as high as 30-40%, annually. This is due to stiff competition from new age business like e-commerce delivery, food-tech companies, mobile phone retail, electronics and apparel retail (single and multi-brand outlets), jewelry chains, MT chains, etc. This is making it very challenging for FMCG companies to recruit and retain salespeople, putting further pressure on their model and margins.


Finally, increasing channel conflict on pricing, discounts, and range between General Trade, e-comm and MT is increasing pricing and margin pressure on FMCG companies as they juggle their volume growth ambitions with prices and margins, while trying to build their “Omni” channel presence. While the end consumer may be benefiting in this conflict through lower prices, the pressure on margins across the value chain continues to grow.

Historically, distribution has proven to be a lucrative business world over. Today,  distributors operate in all the region, many of those businesses owned and operated by the same families that first began trading decades ago. Such distributing companies have served as the primary source of wealth for their families. In recent years, however, it has become abundantly clear that the prevailing business model has begun to come undone, as international companies in FMCG are changing distributors on an increasingly and alarmingly frequent basis.

Even more concerning is the fact that as new generations of families begin to come of age and look toward their share of profit dividends, those profits have begun to shrink. The reasons for this are numerous and complex.

The Reasons behind the Trend

One of the most common reasons that distributors all over have found their share of business shrinking is the fact that they are typically forced to bid against third-party logistics companies. 

Such companies have developed outsourcing models in mature markets and have now begun to infiltrate those models all over.

Also contributing to the problem is the fact that the region has experienced a historically high rate of growth at the same time that saturation is occurring in more developed markets.

 Even a decade ago, big European and American companies might have viewed local markets in the Middle East as only a second- or third-market opportunity.

 Today, that is no longer the case. Large distributors from outside the Middle East are now paying far more attention to the activities in the region.


  With principals changing management frequently and new teams desiring to institute change in order to achieve targets and career advancement, business relationships that once lasted generations are no longer safe. 

Consequently, an increasing number of principal companies have elected to change distributors when they realize they are not receiving the service they believe they need in order to compete in local markets.


The results can be devastating to distributors. Even in a situation in which a principal company elects to withdraw a portion of its business that the distributor has handled in the past, the effect on that distributor’s revenue can be considerable. In the event that the principal should choose to withdraw all of its business and take it to another distributor, the consequences for the former distributor could completely decimate the business. Some distributors have even been driven to the point of bankruptcy following such incidences.


When situations like this occur, it affects not only the distributor’s owners but also their own principals, who may be caught completely unaware by the resulting crisis and find themselves in a situation where they must rush around to locate a new distributor in the region without much advance warning.

 Far too frequently, the crux of the problem is that many distributors remain stuck in the past and have failed to recognize a changing paradigm. The business model that once served distributors in the region so well is rapidly disintegrating as more competitors enter the market and regulations have begun changing to meet the needs of a global economy. 

Worsening the situation is the fact that many distributors have remained in a precarious position of being dependent on just a few principals. By not recognizing the position they currently inhabit, those distributors have failed to update the skills of their workforce. As a result, distributors have become increasingly vulnerable.

Despite challenges in the region that have driven principals to change distributors so frequently, the fact remains that doing so can result in irreparable harm to multiple parties. Perhaps now is the time to consider the repercussions of the mounting trend and make a positive change.





It all depends on the business and types of distribution, if we talk about the general model – I can say the first thing I would do, start tracking each unit of product sold to the end customer.
The biggest problem I face with my clients – they make decisions only if they feel or see some correlations, but the problem – they can be wrong! Those decisions about distributors were not made by data!


This is a very important move – to develop, change and control your business, make decisions based on data. You should have a person (department) in your company, who analyzes all data about the end customer: their demographic information, the depth of check, size of the check, recency, frequency of purchase.

You will understand why they made a purchase, what need did they close, in what cases, how you can control that.
If we are talking about FMCG – it is the only reasonable way to increase sales.

This will help you to develop and decline to manufacture some products, repackage, redevelop solutions, or packages. You will understand which ones are for your customers are most important. And then you can measure ROI on sets of goods and on concrete units (SKU).

As soon you have this data – you can share it with your distributors and educate them on how to sell, why customers buy it (even it is multi-level distribution).

Also, you will explain why they should do merchandising this exact way and build all their marketing based on this data. Also, you can control purchasing of the most profitable and liquid goods for your end to prove your point by data. Distributors and you – are the team, you should discuss and offer them to create such departments, or develop existed ones. This is your same interest.

As soon you have this data – you control all sales of each distributor especially!



Why is it very difficult to handle staff in the retail field? What is the best way to control them?

Why is there so much pressure in sales?


Why are salesmen so pushy? Is there high turnover in sales?

No Monthy Sale = No Incentive. No Target Achievement = No Job Stability

 No Market Development = No Sale. No Market Work = No Salary.


Most of the companies are still following traditional way of working. As they follow the manual pattern – there are lots of chances of skipping the areas or retail shops visits, they do not check the stock availability, do not concentrate on the competitors who have been prevailing and losing the orders from the regular loyal retailers order.

To streamline these field staff then CRM is required, where they can do the reporting in real time over an CRM mobile app. Through the Mobile App salespeople can do the daily basis reporting, prepare there MTP [monthly tour plans], all the retail transactional information can be recorded. CRM solution with mobile app been provided by the Salesforce, SalesBabu, Microsoft Dynamics.

Feature and advantages of the Field staff reporting FMCG software :

• Profiling for Distributors and Retailers.

• Multi-Channel case capture and response.

• Role Based visibility for customer data.

• Set Target.

• Real Time Interaction History.

• MTP : Monthly Tour Plan with approval system.

• DCR: Daily Call Report

• Per Day Order detail.

• Tracking of Primary & Secondary sales

A change will hesitate all the field staffs by using the CRM mobile app – as it is doing the real time tracking with the help of GPS-Geo location tracking. But they also have to understand the productivity will be seen by using the mobile app.

They need not spend too much time in daily reporting writing work. Moreover they will be able to work as per the route plan decided in the app and cannot skip the shops. Moreover very flexible and tracking the competitors details punching into the app. Stock availability can be checked and update into the CRM. In the mobile app field staffs or sales representatives can check the pending bills and do the collections and update in real time. Management is able to monitor sales processes, sales staff daily wise performance and products movement tracking, price details, manage areas, collection of the data by the salespeople review, and many more.

Large distribution companies and retailers receive vastly more requests to distribute products than they can possibly accommodate. Working capital (inventory) is the financial lifeblood of distributors and they have to manage it ferociously to protect profits and margins. That means most distributors are aggressive about eliminating non-performing SKU’s and establish very strict requirements for prospective new suppliers.

Here are two solutions.


1) Start small. Contact local and regional distributors who are looking for an advantage in the marketplace and are approached by many fewer suppliers vs. the big guys. If you can successfully introduce your product through a smaller player, learn how to work with distributors and gain some momentum, you will eventually catch the attention of the larger players if your product is sufficiently compelling.

2) Utilize manufacturers’ representatives. All large distributors maintain relationships with a network of manufacturers’ rep agencies and meet with them on a regular basis. A good mfr’s rep can bring your product to the attention of a larger distributor who will not return your call. Even more important, a good mfr’s rep can help you assess whether or not your product and company are suitable for distribution and will help you prepare and understand requirements around financial strength, insurance and production capacity (large distributors have stringent standards for their suppliers in these areas and others).


Go Work in the market to find who suits your needs and wants.

Reasons fmcg salesmen change distributor newbies must know?


Projected and expected Sales  from the distribution Serviced Area do not match the managements requirement.

Need for improved Physical and Financial Infrastructure of the distributor after frequent and repeated reminders.

Inability of the distributor to match to the requirements of the Company in  maintaining stocks and inventory.

Inability to maintain fiancial discipline with the company leading to  bouncing of cheques or exceeding credit limit.


Neither Distributor, Distributor salesman or Fmcg Company salesman taking steps to develop the head quarterd, Focus market in sales while competitor grows each day.

Distributors lack of initiative in improving sales, liquidation of stocks or implementing company approved retail schemes.

Distributor unable to maintain supply cycle and hampering sales of fast moving SKU’s.

Lack of initiative in prompt Submission of month related damages,expiry, credit note claims.

Distributor signsup and starts dealing with another Brand in similar product category leading to conflict of interest.

Many a times fmcg salesmen are bound to change existing distributors for financial favours or better understanding with distributor in adjusting or usurping retail schemes or branding/merchandising budgets.

Fmcg-Salesman-with an attitude

Why are some FMCG companies unreliable?


 Such Companies and their Sales team have changed so many times in the last 6 years. They promise to Settle claims and dues and kept dragging for the last 2 years already.

Another istance of Company  Appointing  Superstockist and Likewise many other> They just shut down the company in 6 months with our deposits.

 Be very cautious with the Small and Medium FMCG companies about their Sales Trick and Traps


What are important skills to have for sales?


Field sale as role exist in many industries. SO depending on whether you are selling through a distributor / dealer in telecom or fmcg or hardware, selling directly in insurance or a bank/nbfc or selling directly in an b2b environment in an IT industry, the skills required change a bit. Yet there are some very common skills required if you are aspiring to get into field sales here are a few:

1) Energy and Enthusiam- at the highest level and consistently. Making sales calls physically requires a lot of stamina .

2) Product knowledge- to make a good impression and the first one does count, ensure you are completely familar with the prodcut/schemes/service terms etc when you are meeting face to face you have the opportunity to close, so keep all information handy else you will look like a poor salesman.

3) Self Confidence – Your ability to convince and persuade a customer increases when you come across as self assured individual. Portray that even if you are lacking in confidence, build it with time. your Lack of confidence could rub off and the customer may lose confidence in what you are selling.


4)Persevarance- Many a victory has been won by simply trying again and again. So build that ability, at some point ofcourse you would know the customer is not going to buy, till then keep trying. Never however take him off your rolodex, keep in touch at periodic intervals so you can strike again.

5) handling rejection- a very key ingredient of a sales professionals’personality. Never take the rejection personally rather as a product of customers current need and what you are able to offer. This takes one back to the first point, you will need energy to bounce back after rejections.

6) Relationships- Selling is a relationship game. More sales happen because someone knows someone and all that is usually refrerence. So one happy customer will refer you more business. Build relationships with new and maintain relationship with past customers, this itself will help you get you on top of your quota.

Happy Fmcg customers Happy-Aajja-Ajji

Team DigitalGumma

A Professional Team Of Over 25 years of experience in Sales & Marketing operations, Channel (Direct & Indirect) Development and Distribution, and Key Account Management in the FMCG Sector. AREAS OF EXPERTISE Sales & Marketing: Conceptualizing and implementing sales promotional strategies as a part of brand building and market development effort. Business Development: Handling infrastructure development of sales & distribution systems and increasing coverage & penetration to have maximum market share. Channel Management: Identifying and networking with financially strong and reliable dealers/channel partners, Super Stockist, C&F resulting in deeper market penetration and reach. Ensuring cost-effective logistic operations & seamless materials movement to ascertain sufficient inventory levels at each sales outlet/ distribution channel. Evaluating performance & monitoring distributor sales and marketing activities. website has everything you need to create a fully personalized, high-quality free showcase website. Get the word out about all the amazing things you’re doing. Easily email your contacts or share on social media to tell everyone you know. Sell Anything Anywhere To Anyone. is a business development platform motivated to ideate connect propagate to millions of users worldwide. Create a beautiful, professional web presence. Our expert team members collaborate across digital marketing specialties to produce powerful results. Build your next digital marketing plan utilizing the latest internet technology, explode your online presence with a Fully Managed SEO program, and maximize your profits.

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