FMCG Distribution Tips

Two good articles I came across this weekend which will help FMCG Distribution professionals ...always nice to go back to the fundamentals 

3 Tips for FMCG Distributors to Drive Sales

FMCG stands for fast-moving consumer goods, which tend to have lower prices, slimmer margins and higher volumes than durable consumer goods. FMCGs, such as soft drinks, food and beverages, soap, household cleaners and personal care items cosmetics beauty care, are also found in a wider variety of outlets, including convenient stores and corner stores, where they can “fly off the shelves.”  Many brands have established distribution networks, sales channels, in both urban and rural areas to transfer products to retailers and eventually end consumers.

However, competition for space on those shelves is fierce. In order for FMCG distributors to ensure that their products can successfully compete for shelf space and sales in 2018, they need to develop a well-defined and well-honed distribution strategy. Here we share three tips to help get you started: know your competition, avoid consignment selling, and build strong relationships with decision makers. Let’s take a close look at each:

Know your competition

In many cases, knowing your competition is one of the best ways to avoid getting lost in the mix. For example, suppose you are a distributor for a new brand of root beer, and you’re trying to get into stores. When you find a store that already offers five competing varieties of root beer, then you may want to skip it in favor of another store with no root beers, or perhaps only one. Before going all the way with this strategy it’s important to ensure that there is not a good reason that your competitors aren’t found in a particular store or region (such as a strong regional preference for orange soda over root beer).

Of course, knowing your competition will rarely be as simple as counting the number of competing root beers in each store. You will probably need to do more in-depth research in order to learn, or at least estimate, just how much your competitors are selling; whether they are ramping up or phasing out competing products; what price points and promotions they’re using successfully; and what kind of volumes and margins they’re generating. Once you have a reasonably complete picture of the competitive landscape, you can begin not only to map out the best areas and stores to aim for, but the strongest selling, promotional and pricing strategies to use to outshine your competition.

Avoid consignment selling

Store owners and management are understandably reluctant to buy FMCGs that they’re not certain they can sell. If you find yourself in this situation, which most often happens with new distributors or new products, the decision maker may offer you a compromise: they won’t buy your product up-front, but they’ll put it on their shelves. If it sells, they’ll give you an agreed-upon cut. But if it doesn’t sell, it’s your loss, not theirs. This is called consignment selling, and it puts the distributor at a severe disadvantage. It’s not difficult to see why. Suppose the store owner has two root beers on their shelves: A and B. They’ve already paid for A, but B is there on consignment. Clearly, they will lose money if they don’t sell root beer A, so they’re going to take pains to ensure it sells. However, they have nothing to lose if they don’t sell root beer B, so they may just wait and see if it sells itself. Therefore, unless you have a high degree of confidence that all or most of your product is going to sell at a particular store in a particular time-frame, then consignment selling is a high-risk proposition that overwhelmingly favors the store and could leave you high-and-dry.

Build relationships

The stronger your relationships with store owners and managers, the more they will trust you and want to work with you. This may sound like common sense, but amidst all the excitement of sales it is far too easy to forget this simple truth. Relationship building is even more important in small, family-owned corner stores where there is no corporate management or policy that the store needs to answer to. If they know you, like you, and trust you, they will be that much more likely to take a chance on you, offer you a good contract, and suggest your product to their customers.

Therefore, it’s important to take the time to cultivate genuine relationships with store owners and managers, rather than leaping directly into a number-crunching sales pitch. It may be best to start with a simple conversation. Most store owners are proud of their business, and enjoy sharing the story of how it came to be and how it serves the community. Take the time to listen to each of their stories. And remember that the more you show interest in the store owner as a person, and respect the role their business plays in their community, the more likely they’ll show interest in you and welcome you as a new business partner.

Three ways to increase FMCG sales

FMCGs generally sell at lower prices and slimmer margins than durable consumer goods. However, they also sell at higher volumes, which has given FMCGs a reputation for “flying off the shelves” with consumers making frequent purchases. But before FMCG distributors can leverage those high volumes, they have to get their products onto those shelves, and that’s not always as easy as it sounds. In order to stand out among the dozens of other FMCG distributors vying for limited shelf space, distributors need to develop a well-defined and well-honed strategy. Here we’ve taken a close look at three tips to help you get started.

· First, be sure that you’ve researched your competition: their prices, their volumes, their favored outlets, so that you can compete accordingly.

· Second, avoid consignment selling, unless you are confident that your product will sell quickly and that the retailer will pay you reliably.

· Third, invest time in building relationships with store owners and managers, as this will lead to the trust that good agreements and partnerships are based on.

By following these three tips, you will give yourself a well-earned edge in the race to fill shelves and sell FMCGs in 2018.

Other ways new technology solutions can help include:

· Improve productivity of your distribution network

· Market development

· Provide you with the insight to build and reach a larger market more effectively

Should you want to discuss or find out more about how you can benefit from new technology, please feel free to contact Ivy Mobility.

5 successful strategies for strengthening your dealer relationships

June 8, 2016 
By Keesia Wirt

As a company, you have many options for getting products to your customers. You may sell them in an online store, brick-and-mortar shops, or through big-box retailers. Another option used by many manufacturers is a dealer or distributor network to do the selling for them.
Many of our clients at Two Rivers Marketing rely on dealer/distributor networks to sell their products and to be the local face and experts for their brand. Dealers and distributors provide that personal relationship that builds loyal customers and, ultimately, increases sales.

In short, dealers and distributors are incredibly important to your success. But they haven’t always been treated that way. Dealers and distributors have long cited a lack of communication and support from their manufacturing partners.

If you want your dealers and distributors to sell your products and become loyal advocates for your brand, you must help them be successful. You must provide them with mutually beneficial tools and resources that help them become stronger business people, more knowledgeable brand experts and better sellers.

We’ve identified five successful marketing strategies that help the brands we work with strengthen their dealer/distributor relationships:

1. Get to know your audiences
Companies spend countless hours and dollars researching, studying and surveying their customer audiences for insights about purchase behavior and habits. Are you investing enough research time in your dealer and distributor audiences?

Although many companies want to start with their customers, we often advise our clients to begin their audience research at the dealer/distributor level. In addition to the owners/c-suite who run the dealer/distributor businesses, who else on their teams do you need or want to communicate with? In many cases, manager-level audiences are the most eager to communicate with your company and will appreciate and use any information that makes their jobs easier and more efficient. And remember, they typically have the most interactions with your end users.

2. Provide regular communications
How often do you communicate with your dealer/distributor network? Do you provide both day-to-day operational information as well as high-level, strategic news? If you don’t have dedicated communication channels to reach your dealer network, it’s time to create some. Identify the best channels, topics and publishing schedule to reach their audiences… And this works just as well for dealers as it does for end users. They’re people, too!

We work with our clients to create many different types of content to communicate with their dealers and distributors, including weekly emails, webinars, articles and videos for intranet sites or dedicated dealer/distributor websites, private forums and enterprise social networks, electronic and print newsletters, annual meetings, regional events, podcasts, and more. How do your efforts stack up?

3. Offer training and education
Successful dealers and distributors need up-to-date product information and easy, accessible training opportunities to keep themselves and their staff educated about your company. Proactive manufacturers offer ongoing product, sales and service training; business management and skills training; new technology education; and industry insights to cover current topics. As you plan your training efforts, find ways to make them interactive and fun. Many manufacturers reward learners with prizes and incentives.

4. Create valuable tools
Depending on the size of your dealer or distributor network, you simply won’t be able to fulfill every request or support every need they have. But you can create the right tools to help them succeed.

Two Rivers Marketing works with one of our clients to create a valuable advertising and promotion center to support their dealers’ local and regional marketing efforts. Our team staffs the support center and offers assistance and counsel for websites, social media channels, advertising, direct mail, open houses, billboards, mailing list management, training, annual strategy plans, and much more.

5. Ask for input
How often are you asking your dealers and distributors for their opinions and top challenges? Do you regularly schedule input sessions or conduct online surveys to listen to them? Communication is a two-way street, and your dealers and distributors want to share feedback with you. Use these opportunities to learn more about their pain points, successes and what they need from you to be more successful. You’ll be amazed at what you learn and the new content ideas you’ll uncover.

Dealers and distributors are the face of your company and can be one of your strongest marketing tools. They will be most successful when they feel informed and valued by your company.

Your marketing team can improve and strengthen the relationship with your dealer/distributor network by better understanding their needs and challenges, regularly communicating with them on the channels they prefer, offering valuable training and educational opportunities, creating useful business tools and seeking out their input and opinions.

Investing in your dealer/distributor marketing is not just a smart decision, it’s the only decision if your company wants to remain competitive in today’s changing world. For more dealer/distributor marketing ideas check out Debbie’s blog on creating dealer personas, to serve as the ultimate substitute for networking.