Distributor Management System for Nigeria and Other African Markets

According to Boston Consulting Group:

• African consumers buy over 70% of their food, beverages, and personal care products from traditional retail shops.
• Traditional stores are expected to account for 65-75% of sales in Africa till at least 2030.

In many African nations like Nigeria, Kenya, Ghana, Tanzania, Zambia and South Africa, traditional trade dominates the retail landscape, largely driven by a significant reliance on small or local shops, especially in rural areas. This preference is partly due to infrastructure challenges, including poor road conditions and limited transportation, which limits the distribution process to remote areas and even in cities in less-developed nations.

To thrive in Africa, brands must invest in scalable, configurable, and up-to-date sales enablement software that cater to the unique demands of African markets. This strategy stands a good chance at bridging distribution gaps but also empowers brands to unlock sustainable growth and a stronger market foothold.

When it comes to distribution specifically, you need secondary sales visibility (between distributor-retailer) to understand the situation in retail stores and recalibrate your existing strategy. Equally important is primary sales enablement for distributors, such as to be able to place orders by themselves as soon as they learn about low stock. Not all DMS do both (few provide primary enablement for distributors) and that is a big problem in a continent as diverse as Africa. 

To that end, there arises a need for organisation; a distributor management system that can accommodate the aforementioned needs, especially in the rapidly developing markets of Africa. 

We have crafted this article to help you understand why successful retail distribution in Africa cannot exist without a DMS or distributor management system that addresses their unique requirements.

What is a DMS?

As markets grow more competitive with rising demand, legacy system-dependent companies are turning to better technology to support their distribution networks. 

An ideal DMS should cover a lot from primary enablement for distributors to clear visibility on secondary sales that is essential to optimise your route to market and maintaining a competitive edge in the market. 

Overcoming Distribution Challenges in African Markets

Lack of Secondary Sales Visibility – Secondary sales is the transaction that happens between distributor and retailer/customer. Due to the absence of a DMS system, brands lack visibility on activities between retailers and distributors, resulting in missed opportunities to identify retail problems and resolve them in time. 

Lack of a Dependable Claims Process – Distributors in Africa often come across damaged or expired products that they want to return or claim a charge back when a brand offers a special discount or promotion to a retailer. The absence of a clear channel to raise a claim and then monitor that claim is a major cause for distributor dissatisfaction. 

Without a streamlined process, filing these claims can become tedious or significantly delayed, potentially affecting the brand’s image resulting in lost sales opportunities for the  brand. 

Lack of Clarity on Payments – Without a DMS or one that doesn’t focus much on the payments aspect of sales, distributors tend to be in the dark about their credit status or payment fulfillments. This happens because brands may not keep the provision of a statement of account for their distributors or if they do, they might receive it as a piece of paper that can be misplaced or delayed. Instead a digital SOA and credit/debit notes can prevent or clear up any misgivings/confusions about past transactions.  

Rigid DMS with Limited Scalability – Business strategies are constantly evolving. So do the trends, with introduction of new concepts and goals. This kind of uncertainty means you must have a DMS that is easily scalable for the future as opposed to rigid software architectures where you can only add new features or aspects by re-developing the application from the ground up, wasting time, money, and resources. 

No Enablement for Distributors – Distributors often find themselves in a situation where their stock is running low and the next sales rep visit is not due for another few days. Being unable to do anything here means stockout risks and sales loss, and even a loss of reputation at the retail level. 

Instead, enabling your distributors with a DMS that allows for self ordering in addition to giving them full visibility on schemes and rewards enhances your primary sales and thereby also your secondary sales.

Fragmented Markets – Africa’s distribution networks are highly fragmented due to the predominance of small, independent retailers and wholesalers. There is a strong dependence on local distributors in these regions, and the sheer number of such instances fragments the supply chain, causing confusions, delays in issue resolution, and even understocking. 

Additionally, small stores in rural areas often rely on wholesalers who carry a limited range of products, which can hinder a brand’s growth and even market penetration. A DMS can streamline this process by providing current inventory data, sales, and distributor performance, and ensuring timely deliveries to distributors due to timely ordering.

Training gaps – As already mentioned, technology adoption in Africa is slow and one of the primary causes is a lack of training. Many systems come with complicated UI or workflow navigation that makes it difficult for non-technical users to get a grasp of how to use a DMS and even then there is a steep lurking curve. 

A DMS, when capably designed, is equipped to overcome all of the above challenges. Brands should therefore be looking to adopt a DMS that is user friendly while not sacrificing any important function and also featuring easy accessibility. 

The Benefits of Using A DMS in African Markets

A Distributor Management System (DMS) is ideally a powerful tool that brands deploy to manage promotions, inventory management, and invoicing. However, most DMS providers offer a DMS with secondary sales visibility, with no concern about primary sales. It leads to stockouts where distributors don’t learn about low stock in time or are unable to take action on it. 

There is also the lack of rewards and milestone visibility in such systems that depreciates loyalty. Any delay at this level severely affects brand-distributor collaboration, directly affecting secondary sales and the eventual offtake, paralysing your entire route to market. A similar case can be made against traditional distributor management systems that don’t provide analytics to distributors, keeping them limited to a logistical role, when they can be problem solvers.

To drive the point home, there are two aspects to a DMS – primary and secondary sales – one enabling and inspiring distributors to do more business with you and help your goals, and the other to monitor what’s happening at the retail level and plan for store-level investments, manage team performance, and measure the effectiveness of trade schemes. One without the other, as in most DMS, leaves a void in your RTM efforts. 

A DMS also stores key distributor and retailer information, enabling brands to monitor their supply chain, take informed decisions, and improve efficiency.

A DMS should bring multiple strategic advantages to a business:

• Primary enablement – It enables your distributors to take control of a situation such as low stock and place orders without depending on your sales team to do so. With convenient access to DMS via platforms like WhatsApp or Viber, distributors can easily view products and schemes, and place orders independently. This also extends to the capability of distributors to be able to raise and monitor claims on the DMS, such as chargeback claims.
• Secondary visibility – A DMS is also supposed to offer complete secondary visibility to brands without which they won’t be able to comprehend what is happening at the retail level, which SKUs have demand and when and where to recalibrate existing strategies. 
• Integration with SFA and Retailer App for seamless secondary sales – When a DMS integrates with an SFA and perhaps a customer/retailer app, it allows for constant collaboration between distributors, sales team, and retailers. Any order placed at the retail level seamlessly flows into the DMS for distributors to take action on without delay. This eliminates the need for such processes to solely depend on phone calls or physical visits.
• Payment transparency/SOA – A DMS allows total payment transparency by providing statements of accounts and credit/debit notes to ensure that all stakeholders are on the same page about all transactions. This allows for streamlined route-to-market operations and the adequate use of available credit. 
• Analytics/Reports for distributors – Data is useless unless you have the means to infer from it and distributors who can’t interpret data are limited to logistics. Simple accounting systems or a lack of system altogether means they can’t contribute to your sales goals and simply carry out account management, dispatch, and invoicing. 

For instance, with reports or analytics about sales data, distributors are able to assist you when it comes to low-performing retailers and SKUs – both in terms of identification and resolution.

• Effective claims management – A DMS that registers claims and updates distributors about their status ensures transparency and trust in your brand. Handling claims like product returns promptly is crucial to avoid sales loss, while claims such as charge backs from retailer promotions, need efficient management to avoid harming your brand. 

Why BeatRoute?

Deploying a digital solution like BeatRoute at distribution centres can significantly enhance the efficiency of your distribution network. With our DMS, you will witness improvements such as better stock keeping, timely ordering, product awareness, route optimisation, effective complaints management, and more. All of these contribute to faster product movement across the supply chain to the consumer, i.e. offtake. 

By putting distributors and other stakeholders on a single platform, BeatRoute streamlines the route-to-market process, reducing inefficiencies by driving collaboration. It provides valuable insights into sales, stock levels, and demand, enabling brands to adjust strategies promptly. 

As a result, you witness accelerated product movement throughout, improving distribution speed and ultimately enhancing the brand’s market presence and bottom line.

If this excites you, go ahead and try our free demo!