Shashank Verma | VP – Supply Chain Management (Operations)

What’s the best way to sell to Indian customers?

There are a lot of terms in India for people to help you get your products to your Indian customers.  This table summarises them as simply as we could who does what.

Distribution Channel (India)Pricing Control with Foreign Parent FirmBrand LoyaltyTransparent Reporting
Dealer

C&F* Agent

Distributor
Own set-up

M+V

Distribution Channel (India)International TransportImportCustoms CompliancesWarehousing
Dealer

C&F* Agent

Distributor

Own set-up

M+V

Distribution Channel (India)Sales InvoicingTransport in IndiaMoney CollectionPan India Distribution
Dealer

C&F* Agent

Distributor

Mostly Regional
Own set-up

M+V

You

Who is a Dealer?

A dealer is someone who buys a product for their business, stocks it up and then sells them off the rack. They act as a middleman between the distributor and the customer and act as authorised sellers of those commodities in a particular area. A dealer attracts customers from other dealers and competition is formed in the market. They can sell goods from different brands at an increased price than what had paid, making a huge profit margin. In simple words, a dealer is someone who is engaged in dealing with a particular product, buys it and then sells it off.

Want to find the right customers?

Who is a C&F Agent?

An agent who is involved in the clearing and forwarding activity on behalf of the company (mostly such companies are already registered in India). C&F Agents install everything in the warehouse or its office and charges back to the company. The only expertise of C&F Agent is that they know the product of the client, as they (C&F Agent) already operate with the competition. The fee of a C&F Agent is its management fee and all other expenses related to the operations are directly charged by the agent to the company. C&F Agent only looks after logistics, where storage and invoicing are its main functions. Functions like import management, insurance claim settlement, international logistics, transfer pricing, registrations, compliances, etc need to be completed (looked after) by the client.

Need to register your products?

Who is a Distributor?

A person or a firm engaged in sales and distribution of products, for which product prices and margins are decided by them (distributor).
A distributor is the only person who distributes your goods in a specific area. All product prices and margins are decided by them. The distributor is the only source for the retailers and dealers to purchase that product in the area. Usually, a distributor is appointed by a company to sell their product on their behalf. They are the mediator between the manufacturers or producers and retailers, promote and sells the product on behalf of the manufacturers to the concerned entities.
A distributor buys commodities from the company in bulk and sells in small units to other business and outlets. They also offer few services like replacement service, after-sale service, technical support, etc. to the customers.

Want to sell online in India?

What does your own set-up mean?

Your own set-up means forming a company and managing the whole process yourself. To make this work you normally need your own sales team in India, plus all the back-office support to ensure your products get from your factory to your end customer in India.
Depending on your industry there are different company formation options.

What does M+V offer?

M+V offers a complete set of plug and play modules to allow you to control how you sell in India without having to employ a complete set-up.

Get a super distributor to manage your distribution network across India

All very well, but what’s the best option for me?

The rest of this article summarises the differences between engaging a distributor, setting up your own company and employing M+V.

Distributor Your Own set-upM+V
Distribute goods and services to other dealers and businessOwn team to sell and manage ordersSupport your sales and marketing team and handle everything else
Distributor Your Own set-upM+V
1. Can be very good for entering a new market
2. Good Knowledge of similar products
3. The distributor knows Indian logistics
4. Operates on margins and these can be decided by the client (this is not always the case)
1. End-to-end management and control
2. Team dedicated to selling your products.
1. Client’s shadow in India
2. A professional setup Transparency at each stage of the transaction is provided
3. Single integrated system for entire processing – SOM & Finance
4. All expertise related to Supply Chain, Finance, Legal compliances and secretarial available – Tricky tasks like SVB, product based compliances, registrations, etc are carried out easily by the M+V team
5. Devise and communicate the supply chain and logistics in advance, pre-empt the hindrances and overcome the same in order to have a seamless flow of goods
6. Always work as an advisor – Routing goods through various channels – FTWZ, SEZ, M+V (so easy to de-couple from)
Distributor Your Own set-upM+V
1. It is not always clear how they manage affairs with the statutory authorities
2. Product Pricing – Work on margins that are not known to the client
3. Always in a negotiation mode – Keep negotiating on the price of the product
4. Trade is limited to a particular geography – (in most cases)
5. Provide little transparency or visibility to the client
6. Difficult for the client to take over
7. Unstructured system and processes
Complex, and expensive and requires as much micro-managing as any team or distributor.😊

Contact Maier+Vidorno  to help you decide which option is best for you!