A Study on WITH REFERENCE

Distribution
TO FMCG, PAINTS
& HARDWARE
INDUSTRY

Practices.
Distribution practices:-
DISTRIBUTIO
N PRACTICES
IN FMCG
Photos…
FMCG Distribution Network:
Sri. Venkata ratna traders
Location:- Yendada
B2B
Distribution of the following FMCG companies:
Marico
Godrej consumer product ltd- HIT, Cinthol soaps etc
Britannia
The above company is responsible to distribute goods to the retailers of
Visakhapatnam.
Practices…
The retailers either buy from the distributor or they buy from the local wholesaler
Distributor provides you with better servicing, replacement of spoilt products, credit facility of 2
weeks, etc.
On the other hand, the wholesaler will give you more margins, but no credit facilities, and you
don’t have compulsion of storing a set of SKUs, etc.
The stockists are responsible to distribute to the retailers. Each stockist may serve around 500-
1000 retailers in a proximity
Profit margin in the FMCG distribution network
• Companies margin given to stockist- 3 -5%
 Learning outcomes & Obstacles
The firm adheres to certain procedures for collection and clearing of bills receivable.
Credit facility: According to the terms and conditions prescribed by the company is to be 10
days credit to the retailer.
Unfortunately, at many circumstances retailer fails to repay within the stipulated time period of
10 days.
Due to this distributor suffered with more carrying cost (interest) .
Damaged goods –It is loss to the distributor as settlement was not
properly taken care, but later discounted at a lesser price.
Payment for damage stock is much delayed for longer period
Modern traders like Walmart , More, Reliance earlier used to receive
goods from distributors but now they receive goods directly from the
company outlet
DISTRIBUTION
PRACTICES IN
PAINT
INDUSTRY
 Disribution management of Asian Paint Distributor

From the Asian paints dealership, you can expect a profit margin of around 3% to 8% on your sales.
If you compare it with other paint brands, Asian paints offer less profit margin. As you know Asian
paints has almost 40% market share in the Indian paint industry, and you will definitely get more
sales than any other paint brand.
Asian paints offer cash discounts and RPBT discounts for their dealers.
For payments made within 3 days, the company offers cash discounts of up to 5%, and the
payments made within 9 days will get RPBT discounts of up to 3.5%.
Since it is an highly competitive market Asian paint has given dealership for many dealers in city
with warehousing in depot done by the company.
Since there are more dealers area pouching is an issue.
 Disribution management of Asian
Paint Distributor
Technology is a large part of Asian Paints' distribution success. The company provided automated
machines that mixed paint colors at the distributors to allow customers and consumers more range in color
and more options. 
In Vizag there are around 15 dealers of Asian paint and our distributors operate in the Yendada and
madhurawada region.
They do two types of sales

supply to small retail shops(around 4or5).

direct selling to the customers.

If need arises they get an order on credit basis from Asian paint depot in Vishakapatnam. Then Territory sales
manager releases the order within a day based on priority of time.
Cost of investment by Distributor
Asian paints dealership costs around 6 lakh to 8 lakhs in India.
•Initial Stock Purchase & Fee 3.5 lakh to 4 lakhs (including GST)
•Colour mixing machine 1.5 lakh to 2 lakhs
•Shop Interior – 1 lakh to 1.5 lakh ( racks, interior, signage boards, furniture, etc. )
•Computer system & printer 50,000 rupees
•Other Expenses – 20,000 rupees
Asian paints will supply the colour-mixing machine and it comes with different options like
automatic and semi-automatic.
Distribution
Practices in
Hard-Ware
Industry
Conclusion.