1.Risk taking.                                                                                                                            Distributor has to give credit in market without any   proper legal agreement, hence high risk is involved in this process. Also we have discussed that,   in FMCG there are large number of buyers and sellers, in this case doing agreement with the buyer is not possible. Also in FMCG distributor has to acquire some new customer every month and need to give them credit. He does not   know the person whom he is offering credit.                                                                                                                   2. Small transaction value .                                                                                                     In FMCG , distributor has to do a very small amount of transaction . Particularly in retail market, the sale value may be Rs300 . Even some times distributor has to give credit

1. Investment.                                                                                                                                               For more details Distributor need to invest in a particular brand as per agreement with that company. At the time of appointment, company asks for investment as per sales volume . Different company has different investment norms. For example 15days, 21 days or may be 25 days. In general 21 days investment is commonly seen in Indian FMCG market. 2. Purchase from company or super stockist.             His primary job is to place order and payment to the super stockist or company. As he is a channel partner , he need to get the stock from super stockist or the company. 3. Maintain godown stock.         He need to maintain a certain level of stock at his own godown for day to day market requirement . Different organization have different stock norms , like 7days,   10 days or 15 days. In FMCG, distributor need to

Definition of distributor.                                                          For more details Before we discuss about role of distributor , we must know the definition of distributor. Distributor means a businessman ,who purchase from company or super stockist   in bulk quantity and sells to retail or wholesale market in small quantity . In simple he is a channel partner,   acts as   middleman between company or super stockist   and the market. . The term distributor itself implies that,   he does distribution in a defined geography with some defined products.   He has exclusive distribution right of   a particular geography and some particular product. He plays a vital role in FMCG distribution channel. He is the key player to success in FMCG business. Either urban market or rural market , effective distribution depends a lot on him. He is the only source for wholesaler and   retailer for that particular product. He acts as independent business man,   deals with

1.Huge opportunity .                              Pls read this book As it is untapped market , opportunity is huge in this area . New village or Tehsil, even block level coverage can be given. Obviously giving coverage to new area will give additional business volume . 2.Last mile distribution. Rural is the last mile distribution point   for any FMCG company. Giving micro level coverage to rural market can create opportunity. This is the point where product can be given at consumer’s hand. As per census 2011 rural population in India is 68.84 %. It is big consumer base and no company can   ignore this big numbers of consumer. 3.Opportunity for value players. Rural market demands small pack and high profit margin for traders. So value players can play a vital role in rural market. Getting maximum quantity with minimum price is key character in rural market. Hence all the value players can gain from this market segment. Again we should not forget about quality pla

                                                                         Pls read this book 1.Number of outlets are low .   You will not find so   many outlet like   urban area, due to low population ,the number of retail or wholesale   outlet are also low . In some places you will find even 2 or 3 outlet.   2.Stock supply problem   . In rural area stock supply creates a problem. Due to low business volume ,stock supply from nearest town becomes difficult . Distributor or super stockist from nearest town face   difficulties while sending small quantity.   3.High margin product.    FMCG rural visibility Asking for high margin is common in rural area.   It may be retailer , wholesaler or rural distributor always they thinks for their own profit volume.   As quality product cannot give high margin , traders become reluctant to sell these product. 4.Difficult Communication.                                     

Pls read this e book Definition of rural area. As per census govt. of India 2011,rural area means all the area or location except the following                 A.A place where minimum   population is 5000                                                                  B. At least 75% of male working population are engaged in non agricultural sector.              C. Density of population is at least   400 per square KM. Working in rural area. Rural market working is not like urban market . In rural market there are many challenges . First of all population for rural are low in   comparison to urban area. In rural area majority of   population   are not aware of quality product. In this area retailers play a vital role .   As the retailers are concerned about their own profit ,obviously they will sell high margin product. Quality products cannot give too much margin for retailers , here comes the challenge for low margin brands. Sale people working with low margi

1.Reduce overhead  cost .                                                                                                          Wholesaler purchase in bulk quantity and sell at their own effort. Hence manufacturer’s overhead   cost are saved.   Once a product is supplied to a wholesaler , it will be distributed in different location. Manufacturer need not to take any headache.   So   it is cost effective for manufacturer. 2.Supply to interior  place.  Manufacturer cannot reach to all the spread out and interior location, here wholesaler plays a vital role . Retailers from these interior location comes to whole sell market for their purchase. Wholesalers  are also gets business from these retailer. 3.Gives huge  volume .                                                                                                              Whole   seller purchase in huge quantity and sell in a small quantity to retailer. Since wholesaler sells to large numbers of retailer