Sales channels to reach your customers
Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.
If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.
If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.
Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.
Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?
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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.
Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.
The key terms of the supply relationship should be covered in a written contract. Key issues might include:
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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship
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Marico eyes new markets
FMCG company Marico Ltd said on Sunday that it is looking at tapping newer markets including South East Asia and areas closer to their existing operations like Gulf states.”The focus of our current international business is the Gulf states and Bangladesh. We will look at tapping opportunities in countries near our current areas of operation in the Gulf, such as Lebanon, Syria and Egypt where consumer habits are similar to our Arab consumers,” Marico Chief Financial Officer Milind Sarwate said here.The company also said it plans to commence exploratory work in some of the South-East Asian markets where it saw a “potential demand” for some of its pre-wash and post-wash hair care products, he added.The aggregate international business of Marico, comprising the FMCG business, Kaya in UAE and Sundari in the US for the first quarter ended June 30, 2005 grew by 13 per cent and stood at Rs 26 crore.Asked whether the company was looking at entering newer segments in the FMCG sector, Sarwate said that it was considering the option. “Marico will largely operate in areas defined by beauty and wellness. We may enter some categories in which we are not present today but our decision as regards the exact timing of commencing the prototype cannot be shared at this point in time,” Sarwate said.The company may prototype more products in the areas of beauty and wellness during the course of this financial year, he said adding that this would involve expanding products which have been tested in a particular market, to other cities and states.