Challenges of ROI calculation in FMCG

1.Accurate Data collection

ROI calculation depends on accurate data . Accurate data gives perfect ROI but , if data is not perfect then ROI cannot be calculated perfectly. For example , in FMCG it is generally seen ,a distributor works for three different company and he uses common infrastructure , common investment.

In this case if is very difficult to separate individual company investment and infrastructure used by three different company. So the distributor use these trick, he counts the total infra cost to your company to confuse you.

Hence we figure out on lump sump basis.

2.Bank interest . For more details

While calculating ROI , bank interest will be included on expense side or not ? . It is big question for FMCG sales people. Simply it is the distributor’s expense and should include on expense side but , we need to go to deeper.

Different thinker has different view. In my opinion , if interest is included on expense side, then capital amount in that extent will not taken as investment. For example , if a distributor has a bank loan of Rs500000 , and he is giving interest on Rs500000, then Rs500000 will not be calculated as his investment. Again if Rs500000 is considered as his investment then interest will not be considered as expense.