‘Produce – Sell – Consume‘ – has stood for value creation in the distribution industry for more than a century. After all, to provide a value to the end customer, three things are of utmost importance, viz. a viz. creating that value, communicating that value, and selling that value. But what is forgotten in this scheme of things is that of delivering that value i.e. end-to-end ‘value delivery‘.
Value delivery is the act of delivering a value from its point of creation to the point of selling i.e. from manufacturer to retailer. In other words,
Produce – Deliver – Sell – Consume.
But this delivery does not happen in a linear way. The distribution network works like the tentacles of an Octopus, connecting the vast spread of retail network spread across the country with the ‘countable’ number of manufacturers, through its million arms.
Every Distributor is an Octopus
Well, most of them are! As you move downstream along this network, distributors tend to deal in multi-brands. Contrast this with a C&F or a Super-stockist, who deal mostly with a single brand. It thus becomes imperative for this distributor to become an octopus, for surviving stiff competition.
Think of this scenario:
An average multi-branded distributor deals with 5-6 brands, across 300-400 retailers, on a weekly basis. This would mean that he is handling anywhere between 200 SKUs at any time. He does this in the following octopussy way.
- multiple hands reaching out to different retailers, grouped together by geographies (or retail groups)
- each hand carrying similar brands, as well as similar no. of brands, to these different retail groups
- understanding which of these brands are moving fast and which are not
- running different schemes, as pushed by the manufacturers
and most importantly, doing these things on credit, while buying them on cash alone.
Surely, the octopus needs a huge brain to keep track of these transactions to find ‘oppurtunities of profit‘Â in-between.
Or at least a basic distribution management software that can do the following.
- purchase, sell
- purchase, sell, return
- purchase, sell, return, reorder
- purchase, sell more
and a million other features…
… for a price that the distributor can break even with easily.
In effect, the distribution software functions not just as a transactional tool, but an extension of the distributor’s mind.
At GoFrugal, we have designed our software that way – for the octopus in distributors. Try it out here