FMCG means fast-moving consumer goods, with prices, smaller margins and higher amounts than long-lasting consumer goods. FMCG, such as soft drinks, food and drinks, soap, household cleaners and beauty care products are also available in a wider range of department stores including convenience shops. In both urban and rural areas, numerous brands have established distribution networks and sales channels to transfer products to retailers and ultimately end consumers.

Competition on those shelves for space is fierce, however. FMCG distributors need to develop a well-designed and well-honed distribution strategy so that their products can successfully compete for retail and sales. We share three tips here to help you get started: know how to compete, prevent shipments and build strong relations with decision-makers. Let's look at each of them closely:

1. Know Your Competition

Frequently, knowing your competition is one of the best ways to prevent your mixture from being lost. Suppose, for example, you are a distributor of a new root beer brand and you try to enter shops. If you are finding a shop that already contains five competing root beer varieties, you can skip it for another shop without or only one root beer. It is important to ensure that your competitors are not found in a specific store or region before going through this strategy, because (such as a strong regional preference for orange soda over root beer).

Knowing your competition is seldom as easy as counting the number of root beers in each store. To understand and at least estimate how much your competitors sell, whether they ramp up or progressively eliminate competition products; what prices and promotions they have successfully used; and what volumes and margins they generate you probably need to do more in-depth research. Once the competitive landscape has been reasonably completed, you can begin not only to identify the best areas and stores that you want but also to develop the strongest sales, promotional and pricing strategies to outline your competition.

2. Avoid Consignment Selling

The owners of stores and managers refuse to buy FMCGs that they are not sure they can sell. The decision-maker may offer you the compromise that you are in, as happens most often with new distributors or new products: They will not shop upfront but will put it on their shelves. You will be given an agreed cut if it sells. However, it's your loss, not theirs, if it doesn't sell. The so-called selling of cargo is a serious disadvantage for the distributor. Why is it not hard to see? Suppose the owner of the store has on its shelves two root beers: A and B. They paid for an already, but B's on the shipment. If they are not selling root beer A, they will lose money and take care that they sell that beer. However, if they don't sell root beer B, they have nothing to lose so they can wait and see if it is self-selling. Therefore, unless you trust that all or most of your product will be sold at a specific shop in a certain time frame, then consignment selling is a high-risk proposal that is overwhelmingly beneficial to the shop and can leave you dry.

3. Build Relationships

The stronger your relationships with store owners and managers, the more confident and desirable they will become. But it's too easy to forget this simple truth, amid the great enthusiasm of sales. In small, family-owned corner shops, where there is no corporate governance or policy the shop must answer, relationship building becomes more important. If they know you, like you and have confidence in you, they will take a much better opportunity, offer you a good contract and propose your products to their clients.

It is therefore important not to jump to a countless pitch, but to take the time to cultivate genuine relationships with shop owners and managers. Starting with a simple conversation may be best. The majority of shop owners is proud of their business and likes to tell the storey of how it happened and how the community is helping. Take the time to listen to every storey. And remember that the more interest you have in the store owner and respect the role your business plays in your community, the more interest you are and the more welcome you will show as a new business partner.

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