Sales channel in FMCG

         

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Sales channel means the chain link from Manufacturer’s warehouse to  CFA, Super stockiest or distributor, wholesaler and retailer . By this channel products of a company moves to the end user and money from the end user moves to the company. The means to sell a customer is called a sales channel.. The sales channel is nothing but it is about closing a sale. Basically all the entities that do not work directly for the organization. Sales channel plays a vital role for a company to reach the products to the ultimate consumer. In my previous topic I have explained the features of FMCG and we know it is vast industry, manufacturer cannot bill to the consumer directly.

             Some features of Sales channel                                                                                                                                                                                           

1. Sales channel is nothing but the process , in which goods of a company moves from factory to the end user.       

Company need the sales channel to move physical goods from factory to the ultimate consumer. As , the FMCG company cannot reach to end user directly, hence sales channel plays active role in FMCG sector.                                                                           

2. It is one directional.                                                                                           

 Products moves from factory to the ultimate consumer only, not the reverse. Obviously this is one directional process, because product moves for ultimate consumption and nothing left for reverse movement.

                                                                                                                                         

3. Multiple channel partner.   

 Multiple numbers of channel partner plays their respective role. Like retailer need to  serve consumer, distributor does distribution etc.                                                                                                                              

4. Channel partners try to fulfill company objective.   

                      

All the channel partners try to maximize sales & distribution so that company objective can be achieved.   

                                                                                          

5.Predefined standard operating system  . 

All the channel partners need to work as per  predefined company objective and policy                                                                                                                                              

6. Ownership of goods transfers stage by stage.     

                       

Ownership of company products keep changing as the channel partner changes. Stock at retail point is exclusively owned by that retailer, distributor is also the owner of his godown stock.                                                                                                 

7 . Channel partners are motivated by earning profit 

Channel partners earn profit, without profit they cannot survive in the channel. So, profit is the main motivating key for the partner.                                                                                                                         

8. Channel partners invest money on company product.  Channel partners invest on company product according to their business volume and earns profit. Process of investment may be different  depending on the partner and the company.                                                                                                    

 9.Channel partner provides infrastructure for company product.   

As the company product moves from factory to the ultimate consumer, it needs warehousing and transportation. Different partner use their own infrastructure according to types of partner. Whether it is retailer or distributor, it decides which infrastructure to be used.

Pls read this e book