Published on January 24, 2014
Coping With The Challenges Of Indirect Sales And Distribution Controlling In SMEs Case of an Asian SME Asian Herbal Presented by: Abhinav Mathur
Asian Herbal What Is Happening with them? Go Global SME Intermediaries Outsource Services F O R Infrastructure / Transportation / Expertise WHY Establishing Global S&D Network
Understanding the “B2B2B2C” Model Four-tiered Indirect S&D Model 1st B2B – Manufacturer to Wholesaler B2C – Retailer to Customer 2nd B2B – Wholesaler to Retailer
WhatProblems Faced With The Four-tiered are the problems faced? S&D Model: Planning Prices / Sales Revenue / Controlling Inventory. Manufacturer Does Not Meet The End User High cost of advertising Loss due to price reductions Production scheduling Price formation Gaining an overview of intermediaries S&D activities
S&D KPIs Asian Herbal (M), wholesaler’s (W), and retailer’s (R) sales (S) with finished goods inventory (I) – when turnover is slow • Right KPIs help attaining a better price, sales revenue & contribution margin • Help determine inventory levels & days of stock in hand • Need for Data includes – sell in – sell through – sell out – Sell in: Asian Herbal sells goods to the wholesaler. – Sell through: the wholesaler then sells some goods to the retailer – Sell out: the retailer sells goods to customers Setting up right price for further managing inventory at the intermediary level requires setting up right MIS
Price formation for Asian Herbal’s digestive tonic S&D KPIs • As Need for checking selling price from manufacturer to wholesaler , wholesaler countermeasureto retailer & retailer to for quick turnover, customer Advertising & Price Reductions may help… • Essential question ALBRIM who will bear 140.00 cost? 0J935200 of – 5 ml 96.67 107.42 the Material Brands 0J925200 ALBRIM- LS 0K555000 AZITHRAL PACK 5 ml 3 ml WBR PTR 89.77 46.96 MRP VAT 99.74 130.00 52.17 68.00 • Manufacturer / Wholesaler / Retailer all have vested interests to boost turnover • Wholesaler & Retailer with big buying power pass on the Price burden to the little guy – the SME Reduction Seen As The Best Choice By The SME Along With Checking Intermediary Margins
IVA for Asian Herbal’s digestive tonic What could possibly be done? • Much needed Inventory Value Adjustment (IVA) • For every “old” product unit wholesalers and retailers have on hand, the manufacturer gives a credit amounting to the difference between the product’s old and new price • Ideal for short life span goods • A credit note can be given at the time of next billing Future Estimation Of Inventory & Appropriate Reserves Still Required
IVAs Impact On Price • Reserves cause major loss of price transparency with discounts for intermediaries at the time of original purchases • Problems occur in accounting for customer & individual product contribution unit contribution margin = price per product unit (minus) variable cost per product unit • Varying PU price due to quantity discounts & differing payment terms for wholesalers • Highly elastic demand & supply
Impact On S&D Planning • Right supply chain management to ensure right product is in the right place (at the retailer’s place of business), at the right time, and in the right quantity. • Helps avoid additional costs (advertising campaign/price reductions) • “Just in time” & “pull-principle”; manufacturing as per market demand • Controller at Asian Herbal must have updated information from intermediaries to regulate production & optimize pricing decisions Hence MIS Is Of Key Importance
Resolution… • A multidimensional KPI system helps in understanding intermediaries better and felicitates a trustworthy relationship • Indirect S&D model demanding but can be leveraged to expand & drive sales effectively, reaping benefits for an SME • Sharing of timely data through an effective MIS is a key challenge which the SME has to undertake
... indirect sales‐and‐distribution ... of an Asian SME selling its homeopathic ... data into the SME's own management information ...
View 50622 Indirect Sales posts, presentations, experts, and more. Get the professional knowledge you need on LinkedIn.
View Reg Goslin’s professional profile on LinkedIn. ... Field sales role as Account Manager selling to SME ... Sales Management, Leadership, People ...
Direct Selling: Andhra Pradesh and Telangana ... transferable skills in sales and management, ... c. Development of the SME sector: Most direct selling
Read "Coping with the challenges of indirect sales and distribution controlling in ... indirect sales ‐and ... an Asian SME selling its homeopathic ...
Sales Management; Sell Sales can provide your company with ... Direct Sales or Indirect Sales; ... when selling to consumers and the SME market results ...
... indirect sales‐and ... study of an Asian SME selling its homeopathic remedies through ... Journal of Retail & Distribution Management, ...
Sales Management Selling Smarter Presentations Phone Sales Managing Leads Sales Plan of Action Closing Skills View More Personal Finance
A global industry empowering millions in India kpmg.com/in ... direct selling as a sales and distribution ... sales and management, ...