What is primary scheme in FMCG?

Primary Schemes: These are those that are deducted while the invoicing is done to the distributor from the company’s end. This may be done to give the distributor an additional margin.

What is the role of distributor in FMCG?

Distributor is the keystone to FMCG business sector. FMCG distributor generally has exclusive rights of distributing a set of products in a defined geographical location. He will be responsible for the redistribution of the products, market coverage and retail penetration.

What is distributor margin in FMCG?

FMCG companies typically give distributors a margin of four to six per cent of secondary sales, and reducing the number of distributors helps cut costs.

How is FMCG scheme calculated?

For example, a FMCG company sells a bar of soap to the retailer at Rs 10. This is the cost price. The retailer adds Rs 2 as his value and sells the soap to the final consumer at Rs 10. In this case, the mark up on the cost price is (2/8= 25\%) and on the MRP is 2/10 = 20\%.

What do distributors do?

A distributor is an entity that buys noncompeting products or product lines and sells them direct to end users or customers. Most distributors also provide a range of services such as technical support, warranty or service. Distributors are essential in helping reach markets manufacturers could not otherwise target.

What roles do distributors play in the supply chain?

Distributors buffer the producers from fluctuations in product demand by stocking inventory purchased from producers, and doing much of the sales work to find and service customer needs.

How do distributors work?

In the distributorship process, a distributor buys goods from a manufacturer and sells the goods to consumers, sometimes through stores in the distribution channel. Depending on the product or service, distributors can sell goods straight to consumers or to other businesses.

What are the most powerful companies in the FMCG sector?

While some of the companies are very strong in the rural areas compared to the urban areas. Some of the most powerful companies in the FMCG sector are: Hindustan Unilever Ltd., ITC (Indian Tobacco Company), Nestlé India, GCMMF (AMUL), Dabur India, Asian Paints (India), Cadbury India, Britannia Industries,…

What is the profit margin of a FMCG company?

In FMCG, what happens is the company produces and sells Rs 500 Cr of products with a 5-10\% operating profit margin but it does so 40 times. FMCG is all about the churn!

Why FMCG distribution network is important for your business?

In modern business distribution network has a great impact on the success of any business. In the FMCG segment the role of a excellent distribution channel becomes even more crucial because the delivery of FMCG Product is confined to day to day basic.

What is the history of FMCG industry in India?

After 1991, the FMCG industry was inspired by international companies which also allowed government intervention to incentivize foreign FMCG companies to operate in India. The economic reforms of 1991 not only brought a higher number of domestic choices but also imported products.