Consumers aren’t the only ones moving the sales engine but are merely a part of the downstream trade mix. From distributors to retailers, when a product reaches a consumer, it has been part of three sales cycles – primary, secondary and tertiary. But a lot happens in-between the product leaving the warehouse and reaching the store shelves at MRP.
The price of a product starts fluctuating from distributor to distributor when sold to retailers.
In some parts of Africa, supply chain sales take place in an open market where any distributor can sell to any retailer, making the market more competitive and the harmony in the supply chain volatile.
Even in India, an exterior view might show that there’s a better sync in the market as distributors sell to the respective retailers in their area of operation. But internally, distributors undercutting each other is also widely seen.
A retailer who survives on the partial revenue earned on unit product sales is maybe a lot more price-sensitive than the end buyers of the product. And with digital selling rising at an alarming rate, many technology startups such as Jumia and Omnibiz in Africa and Udaan and Jiomart in India are adding to the supply chain woos by jumping over distributors and selling directly to retailers at a better price.
This trade practice has already started raking havoc in India – one of the top retail markets in the world. To solve these similar problems across supply chains in different parts of the world, FMCG companies need a twofold solution.
Firstly, Democratize Data With Digitization.
Shutting off undercutting is not an easy practice. But giving such informal retail practices a formal platform makes it a lot easier for retailers to find the best price without haggling with different distributors for a good buy.
With Bizom, brands can build their own app where every distributor’s prices for every product are available in a single app. Even schemes and discounts can also be made visible to retailers.
So, all they need to do is – scroll, add to the cart, and place the order.
Bringing such transparency will help gain more control over the market and constitute harmony.
Second, Reclaim The Throne.
This part of the fix, not just brings back the power of the trade to the FMCG brand but also builds a stronger supply chain.
Leveraging the power of digital selling, FMCG brands can create their own WhatsApp Ordering Bot for every retailer. When retailers start to chat, the bot will be able to identify every store in the system and will show them all products available for ordering, along with all active trade promotion schemes.
Retailers can directly place their orders with the company, and distributors can fulfil respective orders, making it a win-win situation for the entire supply chain.
Sounds interesting? Talk to our team to explore these solutions through a free demo and find out how to best leverage them to build a stronger supply chain. Mail us at email@example.com to start the discussion.