FMCG Distributorship Ventures: Unlocking Profit Potential

Over the last few decades, the Fast Moving Consumer Goods industry has experienced a tremendous transformation. Presently, it is the 4th largest sector in the country. Some of the driving factors responsible for the growth of the FMCG Sector are Digitisation, increased initiatives and investments by the Government of India, growing rural market, increase in disposable income in rural India, emerging online marketplaces, and growing youth population.

The Indian FMCG market is expected to grow at a CAGR of 14.9% to reach US$ 220 billion by the year 2025, from US$ 110 billion in FY 2020. The E-commerce segment is predicted to contribute 11% to the overall FMCG sales by the year 2030.

Fast Moving Consumer Goods are known to be sold quickly and at affordable rates. There are different types of FMCGs:

The government of our country has taken some great initiatives to encourage further investment in the FMCG sector and open up new avenues for foreign companies. The FMCG sector in India saw a robust foreign direct investment (FDI) inflow of $18.19 billion in 2020. This has helped the FMCG sector to form a strong supply chain, create employment opportunities, and grab high visibility for FMCG brands. In addition to this, the PLI scheme has been extremely beneficial for the sector. It helped in strengthening the production capacity and exports.

As the FMCG sector is expected to grow from strength to strength in the future, it will surely open new avenues for various businesses.

At present, some of the biggest companies in this segment are

It is a huge and variegated market, ideal for the distribution business. Let us look into various types of distributorship options in this sector:

Conventional FCMG distributorship business

This type of distributorship business is an ideal way to get started in this FMGC domain. In this, the place of distribution is usually general shops, grocery stores, retail outlets, etc. The distributors acquire items directly from the parent company and supply these to retailers and sometimes directly to consumers. To do this business, you just need a well-furnished storage unit and an efficient transportation system.

Modern trade distributorship

Modern trade distributorship involves a much more planned and systematized approach to the distribution of goods and logistics management. It comprises supermarket chains, mini-markets, hypermarkets, and other big players.

Wholesale distributorship business

These distributors deal with wheat flour, pulses, rice, and other perishable goods. A wholesale distributor acquires these products from the source and delivers them to the wholesaler. In this FMCG distributorship opportunity, the distributor will not be directly working with retail outlets.

Institutional distributorship business

If you choose to work as an Institutional distributor, you will be delivering merchandise to multinational enterprises, railways, and other government agencies. Payment is done when the consignment is delivered. Renowned FMCG firms that supply these organizations generally choose to work with a distributor and not a retailer or wholesaler. If you have strong connections and relationships with government entities, this is the best and most profitable distributorship opportunity for you.

Super stockist distributorship business

Unlike other distributorship businesses, this usually covers rural areas. Owning a storage unit in a remote location and the best transportation will help you flourish in this business.

How to become the super stockists of FMCG companies?

Distribution is the spine of the Indian market that feeds the enormous retail system spread across the country. The retail market of the country is expected to grow at 10% CAGR to reach US$ 1.2 trillion by the year 2025.

Unlike markets of developed countries, more than 70% of the Indian b2b distribution market is unorganized and has its dynamics. Business houses need to understand this market, its dynamics, its players & their roles, for being successful.

Who are super stockists?

They are distributors who stock products for companies and sell them to sub-stockists. These sub-stockists sell these products to retailers who eventually sell these products to targeted customers of that company. Both super stockists and sub-stockists act as nodal points between companies and retailers. These types of entities are quite useful in rural areas. There are numerous prospects for super stockists in the FMCG sector.

Fast-moving consumer goods (FMCG) are those kinds of products that satisfy the necessities of people. Also called consumer packaged goods (CPG), these items are usually food products, health & beauty products, pharmaceuticals, beverages, cleaning chemicals, and other kinds of non-durable items. The demand for these kinds of products will never waver. Due to this, the FMCG market is quite flourishing in India and worldwide. It will be profitable to become a super stockist of any FMCG company.

Many FMCG companies utilize the super stockist model of business. Here are some of them:

Other benefits of being a super stockist:

Now let’s discuss how to become a super stockiest of FMCG companies:

Business planning

There is no denying the fact that a proper business plan is a strong base for any successful business. So, it is important to formulate a plan which is equipped with a clear vision. This will help in making good decisions and properly managing your business. Kindly ensure that your plans consist of marketing strategies, target customers, logistics chains, etc.

Choose your company

The FMCG market comprises various companies of different sizes. Before choosing associates, it is important to know about their track records and achievements and the type of products they sell. Some companies’ portfolios have numerous FMCG products, and some sell only one or two products. Also, make sure to know about their business policies.

Licensing

Just like any other business, acquiring licenses is essential. Acquire the appropriate licenses to stay away from any legal problems.

Location

Location is another integral factor that will decide the success of your super-stockiest business. The size of the space in your chosen location will decide how much quantity of FMCG products you can store. Make sure your location has a proper electricity connection, internet connectivity, water supply, and other important amenities.

Transportation

Being the stockiest means, you do not have to store the stocks but also provide them to the sub-stockists. So, you need to make sure that you have an efficient transportation system and a fleet of vehicles.

Workforce

Every business needs a workforce that is not only reliable and hardworking but trustworthy. If you want to be a successful super stockist, you must have the best team.

For profitable business ideas, distributorship opportunities, and other prospects, visit www.getdistributors.com!