The Ultimate Guide to Distributor Management Systems for FMCG Companies

An effective distributor management system helps brands manage inventory, claims, schemes, and enables distributors in primary sales – factors crucial to efficient  distributor management.

Furthermore, all emerging markets are versatile and extensive, with thousands of distributors dealing with millions of retailers, having billions of potential transactions. As a result, FMCG companies need to continuously monitor  distribution networks on such a scale, while juggling between different channel partners to supervise.

The point that many DMS systems overlook is that it is not enough to simply provide secondary sales visibility to brands to ensure good sales but rather, distributor enablement on the primary level is of equal import.

While FMCG companies require complete visibility of secondary sales execution, with precise data about inventory and utilization of schemes and offers to prepare their go-to-market strategy, primary sales enablement for distributors means they can place orders, have visibility on schemes, can see their rewards and goals, and ultimately have a memorable trading experience with brands. How do they recalibrate existing retail strategies to continuously improve their bottom line? How do they give more power to distributors? And, most importantly, what is the solution to such large scale management and why isn’t everybody able to do it?

The answer is simple – while all the top companies around the globe are using Distributor Management Systems, not all are using the one most likely to give them great results! 

What is a Distributor Management System?

In technical terms, DMS (Distributor Management System) is a well-defined primary and secondary sales management solution that helps optimize and organize product distribution through distributors.

 A Distributor Management System (DMS) is a powerful tool that brands deploy to manage promotions, inventory management, and invoicing. There are two aspects to it – primary and secondary sales – one enabling and inspiring distributors to do more business with you 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. A DMS stores key distributor and retailer information, enabling brands to monitor their supply chain, take informed decisions, improve efficiency, and reduce costs.

Role of a Distributor Management System in Supply Chain Management

Distributor management plays a significant role in capturing the market, especially for FMCG and Consumer Good companies. The distributor management system helps in digitizing and automating the sales process that involve primary sales enablement, inventory management, secondary sales execution, assessment of the utilization of schemes and offers, and purchase and return management.

One of the important roles of a DMS is to help you outperform your competitors! 

For example, without a Distributor Management System or DMS, an FMCG company can experience problems with manual ordering, inaccurate stock levels, and delays in shipments leading to stockouts, overstocking, and missed opportunities. Distributors’ performance is hard to track, making it difficult to take corrective actions and/or target promotions effectively. With a modern DMS, however, the process is automated, affecting both primary and secondary sales. In the former, distributor enablement and visibility helps avoid stock issues and enhances sales, and in the latter, brands get important retail insights to gauge not only distributor performance but on where to focus on retail improvement.

In a nutshell, DMS comprises all the processes involved in delivering the product from the brand to the customers/retailers. 

Advantages of a Distributor Management System over Traditional Systems

• Primary Sales Enablement

A reliable and modern DMS allows your distributors the freedom to place orders when stock is low, raise and check claims, and have complete visibility on their goals, milestones and rewards. This eliminates stock issues, incentivises distributors, and enhances your primary sales volume and range. A legacy system or a traditional setup lacks this, leaving a huge gap in your route to market. 

• Complete Visibility on Secondary Sales Execution

FMCG brands earlier had to wait for the collection of secondary sales data from the distributor and were completely dependent on the distributor in this aspect. With a DMS, brands can have complete visibility of the secondary sales execution in real time to then create and change strategies where necessary.

• Better Inventory Management

With information about sales and stock provided to you in real-time, efficient inventory management becomes seamlessly easy. Further, it aids you in making  better business decisions with regards to demand and supply of the products in the market. Also, as mentioned before, enabling your distributors to self order greatly mitigates the chances of stock issues. 

• Increased Efficiency with Reduced Costs of Operations

Distributors can now avoid investment in workstations and human resources. Furthermore, it reduces the revenue loss to the company by cutting off the extra costs on pilferage and damage.

• Clarity on Payments and Transactions

A DMS like BeatRoute ensures that all monetary transactions, credit and debit notes, and chargeback claims are clearly accessible and visible to distributors. A statement of account eliminates any confusion regarding past payments so that distributors continue to do business with you and you get your payments on time without them going over their credit limits, for instance. 

Now that we know the benefits involved, let’s look at the different challenges faced by companies while they adapt to a Distributor Management System. 

• Enabling Distributors with Analytics

Brands can also create custom reports for distribution with something like, say, BeatRoute’s Report Builder, and give distributors visibility on these reports on DMS. For example, when distributors are not only privy to but can actually infer from sales data through analytics, they can determine which product/SKU isn’t selling optimally or which store is experiencing a slump and handle such issues, instead of simply dispatching orders or invoicing. As channel partners, distributors can help you take corrective measures when they have full visibility on reports to draw conclusions from; here, your DMS allows them to do more than just provide logistical support.

Challenges while Adopting a DMS

When you decide on a Distributor Management System for your primary and secondary sales operations, the biggest challenge could be that the distributors are reluctant to adopt the DMS software given by the brand resulting in incomplete visibility of the secondary sales data. A challenge could even be on the primary sales level where distributors cannot order by themselves or can’t see their rewards and goals for you to see increasing business with time. 

Reasons?

Distributors today believe in dealing with multiple brands and several products of the same category under their forte. But when a distributor uses a DMS software from one brand, they can not be using a different software for every other brand they’re distributing for, as he would require a separate resource every time he does so. Additionally, many DMS companies and even brands don’t think of putting much effort into primary sales enablement, alienating distributors who have no idea how they are performing, what rewards they have accumulated or most importantly, can’t act even when there are low stock issues.

Therefore, they choose to use a single management/accounting system for all the brands they deal with, be it DMS from a major brand or any other accounting software.

 It becomes difficult to receive and compile the data from distributors. Furthermore, if there is no cloud integration, there are high chances that the distributor needs to wait till the end of month to send the collected data.

Using a cloud integrated single management system makes it easier for the distributors as they can continue using Tally or other software for entering data while the data of the specific brand is integrated into their system. Moreover, it aids the FMCG brand with complete visibility of secondary sales and aids inventory management, store investment decisions, and measuring trade scheme efficacy.

The other challenging factor for integrating DMS is that most distributors prefer a single system for data entry. They have used Tally or any other similar system for recording secondary sales execution for years. Therefore, most distributors are reluctant to use any other software as DMS.

Solution to the Challenges

Controlling such a vast line of operations can be challenging. A compelling solution is to use our Hybrid Distributor Management System. Here’s why: 

Our hybrid DMS allows you to either deploy the software for those distributors who are willing to move to or adopt it or the Tally connector plugin for those who want to keep using their existing third-party accounting systems.

In primary sales, BeatRoute enables your distributors to check their goals and rewards with easy access via WhatsApp/Viber (leveraging social media’s widespread use) and to combat low stock promptly by self ordering. 

In secondary sales, visibility of actual secondary sales execution is fundamental to knowing the status of sales execution and it also provides inputs to various strategies such as store level investments, team performance, and also effectiveness of trade schemes.

BeatRoute provides multiple ways to have visibility of distributor’s inventory to support creation of right trade schemes to avoid over stocking or understocking of any product at the distributor end.

The Advantages of BeatRoute as your DMS

The use of our DMS has not one but many advantages to help you excel in your business’s supply chain management. Check them out: 

• Web-based Operations

Manufacturers can now perform their operations over both mobile devices and the desktop, adding to the flexibility of their operations. 

• Integration with the Existing System

If there are adoption issues for distributors, BeatRoute has made it easier for the distributor by integrating the DMS with their existing data entry system. For instance, distributors can continue using Tally for recording secondary sales, while BeatRoute’s Tally Plugin can help the FMCG/Consumer Good brand to pick up secondary sales data without the need for distributors using yourDMS software. 

• Seamlessly Integrated SFA for Dedicated Sales Management

BeatRoute integrates SFA with DMS  that works as a centralized system to provide real-time information around sales execution. This allows for easy flow of orders from SFA to the DMS.

• Easy Self-activation for Distributors at Every Scale

Distributors don’t need to wait for technical support or guidance of any form to adapt to the platform, it comes self-activated. 

• Reliable Link of Communication

The software helps facilitate digital communication amongst the managers, retailers, field sales reps, dealers, and distributors, etc. in real-time. 

• Automated Scheme Management and Claim Processing

With automated processing, managing different schemes and processing claims becomes easy for brands. This not only mitigates incorrect scheme application or delayed claim resolution but strengthens your relationship with distributors, thus, helping your primary sales. 

What It Boils Down To

To sum it all up, a distributor management system is a powerful tool that can empower FMCG & Consumer Goods companies to get better control over their primary and secondary sales executions. It can be a daunting task for a company to convince distributors to adopt its DMS, but our Hybrid-DMS Platform serves as an ideal solution for this. Furthermore, it integrates seamlessly with the SFA component for true sales transformation for an FMCG/Consumer Goods Company.

Want to learn more? Get a Free Demo of our Distributor Management System.