Seven Criteria to Select a Good Distributor

There are 80% sales come through by distribution sales in all over the world. All FMCG, Telecom, Device Company sales are based on distribution sales. You know very well that Unilever, BAT, Nestle, Airtel, Nokia, and Samsung etc all giant company sales come through distribution. So distribution sales are executing by distributor. So, local distributors are playing the vital role for distribution business. Maximum times we are facing challenges to get a good distribution. Good distribution will give you good and strong business whatever the company is. So that company will get a steady business growth in long run business by these good distributors. Without the absence of good distribution we have to suffer a lot. So the selection criteria of a good distributor are given below:

1     Financially Solvent: A distributor should be financially solvent. If he doesn’t be financially solvent then it would be difficult to run company business smoothly. Due to financial lacking he will lose company business, doesn’t give support for market coverage. As a result company brand image will be going down frequently. So we have to observe the distributor financial strength to select him as a distributor. We can check his bank solvency by through last one year bank transaction statement.

      Market coverage: When we select a new distributor we have to check his current market coverage. If he is old distributor (more company distributor) then we have to observe how much market he captured by his own distribution. We have to observe his market current coverage status like 40%, 50%, 60%, 80% or 90%. If this distributor current coverage is 80% then you can select this good distributor. The current market coverage is 40% or 50% then it would be risky to select him as a distributor. If he is new in distribution business it won’t be necessary. Then it is necessary to know his current market knowledge and financial strength.

      Multiple Distributors: Multiple distributors (doing distribution business with other companies) will get the preference to select him as a new distributor. So you have to focus on multiple distributor and what brand they are carrying. If their reputation is good then you will go forward. It is an added advantage that multiple distributors know his market very well and his face value is important for other reputed brand business. So that if you select him for your company distributor then you will get all business facility.

      Business length: Before selecting a new distributor you have to know that distributor total business length. How long he is doing distribution business in that specific territory. Suppose if any distributor doing distribution business for 20 years (long period of time) he has more control and reputation in market. So this distributor will be more viable for your business. On the contrary distributor business length is only for 2years (less period of time). So he has less control, maturity and reputation in market. So he will be risky for your selection criteria.

      Reputation in Business:  For the selection of a good distributor you have to know the distributor business reputation. What is the relation with the company employee, what is the relation with the retailer as well as business community? It should be note down, evaluate this and then you can make your own decision. Does he have any political link or any kind of corruption then you can avoid this distribution.

     Commitment: A good business man tries to protect his commitment. Without proper commitment every business man treated as a fraud. So when you find a new distributor you should follow distributor commitment and your further business stability depends on that. If his commitment maximum time is right then you can precede your deal. How can you check his commitment status before give him the distribution. You can check it by existing retailers, existing company employees and distributor employees. 

      Business Forecast Knowledge: When you select any distributor you have to check his strategic knowledge about distribution business. His short term and long term business strategies, future business growth plan, additional capital plan for further investment, cost & benefit analysis etc. When a distributor has sufficient knowledge about business forecast knowledge then you select the distribution without any hesitation. 

So as a sale professional if you follow above guideline then you will get a professional good distributor. Good distributor will give you good business and good revenue. In long term your company any you both will be benefited by a good distributor.