CASE STUDIES
 
 SOLUTIONS OFFERED
 
 THINGS TO NOTE
 
 FREQUENTLY ASKED QUESTIONS


 
 MANAGING TRUSTEE PROFILE
 
 LETTER GALLERY
 
 SMALL TRADER PROBLEMS
 
 THINGS TO DO

 





 


 

BRAND OWNER’S DEFICIENCIES
( PLEASE CLICK ON THE SUBJECT HEAD FOR FURTHER DETAILS )

1. TRANSPATENCY AND STANDARDIZATION !!

2. NO GUIDANCE !!

3. FALSE COMMITMENTS !!

4. PROFIT MAXIMIZATION !!

5. RETURN ON INVESTMENT !!

6. HIGH BENCHMARKS !!

7. NON STABLIZATION !!

8. BUSINESS VALIDITY

9. LOW COST RESOURCE !!

10. NON COMPENSATION !!

11. UNREASONABLE EARNING PARAMETERS !!

1. TRANSPATENCY AND STANDARDIZATION !!

Example - If distributor is required to maintain (5) days stock, then the information should be available on brand owners, B2B web site, but instead the sales representatives are empowered to play on case to case basis.



2. NO GUIDANCE !!

New and existing distributors, are not given updates on methods to solves their grievances. Brand owners are, normally never proactive in identifying a problem area and devising ways to solve the same.
Example - it is a common knowledge that - problems regarding unsettled claims and other heads do exist, but never is an effort made to communicate by E-mail or group S.M.S. and create an authority to whom problems pending beyond a certain tenor can be addressed.

WE WONDER HOW MANY DISTRIBUTORS HAVE THE HEART TO WRITE TO THE C.E.O. OR TO MANAGING DIRECTOR ??
THERE IS NO CONSCIOUS EFFORT LIKE HAVING A B2B WEB SITE WHERE, POLICIES AND OTHER INFORMATION CONCERNING THE DISTRIBUTORS ARE REGULARLY UPDATED.




3. FALSE COMMITMENTS !!

It is common knowledge that resources are to be bought cheap.
However there is a difference between buying cheap through proper negotiations and buying cheap by arm twisting.
Brands normally enroll distributors with great commitments and when the investment has been made by the entity - polices are implemented which eat not only into profits but monetary capital of the distributors too.
Sometimes it is too late by the time the fact is realized or at times false commitments by the sales representatives, of the brand owner keeps the hopes of the non suspecting distributor alive till the time the end is arrived.



4. PROFIT MAXIMIZATION !!

Is sure the aim of every organization.
However the way and means have to be ethical and humane. With a brand sitting on thousands of crores of resources but it’s distributors being deprived of even minimum profits and additional penal policies being implemented upon, on parameters, which are beyond the supervision and control of distributors, there is a scenario which is very questionable.



5. RETURN ON INVESTMENT !!

BRAND OWNER WILL NEVER CALCULATE HEADS LIKE -

A. Interest on capital.
B. Rent.
C. Subscription like - FORCIBLE DONATIONS.
D. Bad debts. Normal Losses like - Fake currency collection.
They calculate returns for the distributor in a perfect scenario whereas themselves thrive on an imperfect scenario.
We wonder how can heads like RENT AND INTEREST ON CAPITAL BE IGNORED, WHILE CALCULATING, PROFIT AND LOSS ??
MOREOVER EVEN IF THE PROPERTY IS OWNED BY THE DISTRIBUTOR, HE WOULD HAVE EARNED EXTRA REVENUE BY RENTING IT OUT. THERE IS ALWAYS AN INDUSTRY AVERAGE FOR NORMAL AND ABNORMAL LOSSES, WHICH NEEDS TO BE CONSIDERED.



6. HIGH BENCHMARKS !!

VERY STIFF TARGETS ARE SET WHICH ARE NEVER VIABLE TO ACHIEVE, A FACT WHICH THE BRANDS KNOW BEFORE SETTING THEM AND REDUCTIONS ON THE TARGETS IS A POTENTIAL TOOL FOR BUYING BARGAINS.

FOR EXAMPLE IF ANY DISTRIBUTOR IS FIGHTING FOR A CLAIM WHICH IS NOT SETTLED FOR A LONG PERIOD OF TIME, THE BRAND OWNER’S REPRESENTATIVE, DEBATES WITH THE POINT THAT, THE DISTRIBUTOR HAS ALSO NOT COMPLIED WITH SET NORMS ( Example- stock level ) AND HENCE IS GENERATING LOSSES FOR THE BRAND OWNER.
THE TRUTH IS THAT, THE ENTIRE SYSTEM IS NON STANDARISED AND GAMES ARE PLAYED ON CASE TO CASE BASIS.



7. NON STABLIZATION !!

ALL BRANDS BELIEVE IN CREATING EXCLUSIVE DISTRIBUTORS. WHENEVER A NEW BRAND IS LAUNCHED, THE DISTRIBUTOR IS PROMISED LOT OF GOODIES AS A REWARD, IN EXCHANGE FOR HIS EFFORTS DURING THE INITIAL PHASE - [ WHEN THERE IS DEFICIT IN EARNINGS OF THE DISTRIBUTORS, INVOLMENT LEVEL IS VERY HIGH IN TERMS OF RESOURCE OF TIME AND EFFORTS.]

However as soon as the brand shows some consolidation, the distributor’s area is chopped of on pretex of non achievement of unreasonable targets.

IT IS FINE THAT NO BUSINESS IS IMMUNE TO COMPETITION BUT AGAIN IN CASE OF DISTRIBUTORS, IT IS THE BRAND OWNER WHO WILLINGLY AND STRATEGICALLY CREATES COMPETITION, WITHIN THE SAME BRAND RATHER THAN ANY OTHER BRAND BECOMING A COMPETITOR.

THIS IS LEADS TO WASTAGE OF INPUTS CONTRIBUTED ON PART OF THE DISTRIBUTOR, WHICH IS A BUSINESS GAIN FOR THE BRAND OWNER SINCE EVERY RESOURCES HAS COST BUT INSTEAD BY PAYING FOR THEM THE BRAND OWNER ACQUIRES THEM - FREE OF COST, THROUGH UNFAIR TRADE PRACTISES.



8. BUSINESS VIABILITY

SOME BRANDS CREATE- UNIVIABLE BUSINESS ENTITIES, BY CREATING SMALL SIZE DISTRIBUTORS, WHOSE REVENUES ARE NOT ENOUGH TO MEET THE COSTS OF DEPLOYING MINIMUM RESOURCES, REQUIRED TO DELIVER STANDARDISED BUSINESS PERFORMANCE. SUCH BRANDS ABSORB THE WORKING CAPITAL OF THEIR DISTRIBUTING ENTITIES, BY SHOWING THEM A LUCRATIVE FUTURE, WHICH IN REALITY WILL NEVER BE DELIVERED BY THE BRAND OWNER.



9. LOW COST RESOURCE !!

SOME BRANDS CHANGE POLICIES TO THEIR ADVANTAGE WITHOUT EVEN CONSIDERING THEIR IMPACT ON THEIR DISTRIBUTORS WHOM THEY ALSO CALL TRADE PARTNERS.

SINCE BRAND EXCLUSIVITY IS A MUST FOR DISTRIBUTING PARTNER AND FUTURE IS NOT ASSURED, THE OWNER OF DISTRIBUTING ENTITY, TO HEDGE HIS RISKS, INDULGES IN VARIABLE BUSINESS VENTURES AND HAS TO EMPLOY STAFF, TO EXECUTE, JOB FUNCTIONS !!

HOWEVER AT TIMES, THE BRANDS ARE SUCCESSFUL IN CONVINCING INDIVIDUALS WHO ARE EMPTY HANDED IN TERMS OF EXISITING BUSINESSES, TO WORK FOR THE BRAND.

SINCE THE INDIVIDUAL IS COMPLETLY FOCUSSED ON (1) BRAND & BUSINESS, HE MANAGES TO SAVE ON CERTAIN COSTS AND HENCE HE IS MADE A CASE STUDY, OF LOW COST MODEL FOR OTHER DISTRIBUTORS, ( WHO EMPLOY MANPOWER ) TO FOLLOW.

However only when the brand in future unreasonably chops the area of the single business distributor, it is a late realization since no back up business was created by him. Therefore both categories of distributors, stand strategically exploited.



10. NON COMPENSATION !!

IT IS TRUTH THAT, THE MARKET PLACE IS GETTING MORE AND MORE COMPETITIVE EVERY DAY AND HENCE MARGINS ARE UNDER PRESSURE.

HOWEVER IF DISTRIBUTOR MARGINS ARE BEING REDUCED, THEIR TURNOVER GROWTH SHOULD BE ASSURED.
BRANDS RESORT TO BOTH CURTAILING IN TURNOVER AND MARGINS ONCE THE BRAND SHOWS SOME CONSODILATION, HENCE FINANCIALLY, HITTING THE DISTRIBUTOR ADVERSELY.



11. UNREASONABLE EARNING PARAMETERS !!

SOME REVENUE GENERATING PARAMETERS ARE CREATED FOR THE DISTRIBUTORS, BUT EVEN (10%) OF DISTRIBUTORS FAIL TO EARN IT.
THEY ARE BUT AN EYEWASH, TO KEEP THE HOPE OF EARNING ALIVE IN THE DISRIBUTOR, WHILE THE BRAND CRUISES ALONG. MOEOVER EVEN (5%) ACHIVERS ARE NOT CONSTANT, SINCE THE ACHIEVERS CAN ONLY ACHIEVE, BY COMPROMISING ON SOME PARAMETER, CO-RELATED TO THE EARNING PARAMETER !!

Example -

There is a payout policy on submission of correct customer forms, towards mobile phone connections, within a stipulated time period and at the same time there is a target for new activation which is not in parity with reality. Therefore if any distributor focuses on activation targets he will never be able to comply with norms for customer form submission.
Further the brand owner will threaten to take away the business of the distributor if activation targets are not achieved.