written by Khatabook | February 14, 2022

10 Best Distributorship Opportunities in FMCG You Should Know

Fast Moving Consumer Goods, or FMCG, are items with low prices yet high consumption. The finest examples are household items, clothes, and food, and the items are purchased from a retail outlet by a customer. FMCG brands include popular and profitable supermarkets like Big Bazaar, D-mart, Reliance Fresh and small grocery stores and kirana shops as well.

The Indian economy comprises many industries, all contributing to wealth generation. An FMCG distributor is a person who serves as a link between the producer and the retailer. An individual’s job is to promote the products of a certain FMCG firm that has chosen to distribute their products in specific areas. The distributorship chances in FMCG differ depending on the type of retailer a company picks. Let's now look at the definition of FMCG and some of the other FMCG companies in India. 

Did you know?

According to Forrester Research, distributorship prospects in FMCG are predicted to rise at a rate of 10-12 % per year over the next ten years.

What is FMCG and India’s FMCG sector?

  • Simply said, a consumer good or FMCG is a finished product that the customer purchases. 
  • 94% of people worldwide recognise Coca-distinctive Cola's red can. This tells us about the significant popularity of the brand and its impact on consumers. 
  • Along with the can, the white logo of Coca Cola is a trademark signature of the brand as well.
  • Consider this - DMart hypermarkets throughout India produced total sales of ₹19,916 crores in 2019, with an astounding market value of ₹39,988 crores.
  • Fast-moving consumer goods, or FMCG, are used daily and have a wide supply and demand chain. 
  • This sector is in charge of creating, distributing, and marketing items to be sold in the market.
  • FMCG revenue in India has grown at an astounding pace of 21.4% over the previous ten years.
  • In 2018, India's FMCG market grew at 14.8%, the fastest in the Asia Pacific region.
  • India was ranked first in the Asia-Pacific FMCG market average growth chart, followed by:
    • Vietnam
    • Malaysia
    • China
    • New Zealand
    • Thailand
    • Japan
    • The Philippines, etc.

Different Types of FCMG

FMCG items are industrial or non-industrial goods widely consumed and frequently offered at a reduced retail price. These are commonly divided into durable products, non-durable commodities, and services.

As the name implies, durable products are those with a shelf life of more than three years, such as electronic goods, recreational equipment, and so on.

Non-durable items, such as food and drinks, over-the-counter pharmaceuticals, and so on, have a shelf life of less than one year from the date of manufacturing.

Detergents, toiletries, cosmetics, personal and overall hygiene goods are just a few FMCGs that dominate Indian consumer markets.

Also Read: How To Start A Perfect Milk Distribution Business

Top FMCG Distributor Companies in India

Company Names

Revenue

Hindustan Unilever Limited

₹40,511 Cr

Nestle

₹12,117 Cr

Marico Limited

₹7465 Cr

Dabur

₹8813 Cr

Britannia Industry

₹11, 211 Cr

Procter & Gamble (P&G),

₹6,313.71 Cr

Godrej Consumer Products Limited

₹10,156 Cr

Pepsico

₹70,000 Cr

ITC Limited

₹51, 321 Cr

Coca-Cola

₹2,297.51 Cr

Types of FMCG Products

  • Food products
  • Naturally Concocted*
  • Stationery
  • Ayurvedic Consumer Products 
  • Personal Care Products
  • Beauty Products
  • Baked food like- biscuits, bread, rusk, cakes, etc.
  • Mineral and Herbal Products
  • Dairy Products
  • Security Products
  • Home Appliances
  • Toiletries
  • Hair Care Products
  • Electrical Products

(*items prepared by combining raw materials)

Household and personal care items accounted for 50% of FMCG sales in India, followed by healthcare (31-32%) and food and beverage (18-19%).

Categories of FMCG

Even though fast-moving consumer products are divided into four categories depending on their shelf life, they are divided into four categories from a marketing standpoint: 

1. Convenience Products: These are purchased more frequently because they are readily available at all retail locations and do not require the consumer to make an informed decision. These products are sold by retailers on a regular basis such as daily food items items. 

2. Shopping Products: These products require some planning as compared to convenience products. Examples are furniture and electronics that have longer shelf life and durability. 

3. Speciality Products: They are not consumed daily. Instead, they are of notable brand and high quality. Automobiles and other motor vehicles, designer clothing, high-end jewellery, and other items fall into this category.

4. Unsought Products: These products are readily available in the market, however, they have low consumer demand. Examples include fire extinguishers and even encyclopedias.

Types of FMCG Distributorships

There are different types of FMCG distributorship opportunities that you can choose from:

1. Traditional FCMG Distributorship

This is one of the most typical ways to get started with a distributorship in the FMCG industry. Your outlets are general shops, local grocery stores, and smaller businesses. The FMCG distributor buys products directly from producers and distributes them to these retailers according to inventory needs. You'll need a solid transportation network to make sure your deliveries arrive on schedule as well as you have a proper godown for storage.

2. Modern Trade Distributorship

Large retail establishments that provide the most profitable FMCG distributorship prospects are known as modern trade outlets. D-Mart, Reliance Fresh, and Big Bazaar are the greatest examples. Because huge firms like these already have vendors and distributors in place, breaking into this market is challenging. 

You do, however, have some possibilities for entering the market. Make contact with current modern trade distributors. If you can buy any unique items, you might look for new distributorship chances in FMCG to distribute them. Maintain proper stocks, smart transportation network and invest in high quality products. 

3. Wholesale Distributorship

These distributors mainly deal with perishable goods like wheat flour, pulses, rice, etc. A wholesale distributor procures these products from the source and delivers them to the wholesaler. With this FMCG distributorship opportunity, you will not directly work with retail outlets. 

4. Institutional Distributorship

You might choose to work directly with institutions as an Institutional Distributor. This category includes multinational enterprises, railways, and other government agencies. Personal monitoring is the most important benefit to explore potential FMCG distributorship chances. Your payment will be completed when the merchandise is delivered.

Any FMCG firm that supplies these organisations prefers to work with a distributor rather than a retailer or wholesaler. If you have solid relationships with government entities, this is the greatest alternative for you. 

5. Super Stockist Distributorship

There are numerous distributorship prospects in FMCG, not just in the city but also in rural regions. Super stockist distributors are in charge of delivering FMCG company goods to minor distributors in the rural areas. They then transport it to retail locations.

Super Stockist distributorship prospects make you the principal source of commodities for these sub-stockists in the FMCG industry. Having your godown at the district headquarters is ideal for providing FMCG distribution to remote regions.

Distributorship Opportunities in different industries

A country's economic status is determined by its income, and since we're talking about the encompassing economy, all sub-sectors operate to generate capital. One such sub-sector is FMCG Products. There are several additional industries in this category which include:

  • Gems and Jewellery 
  • Manufacturing 
  • Oil and Gas 
  • Power 
  • Pharmaceuticals 
  • Steel 
  • Textiles 
  • Retail, etc.

The FMCG is the fourth largest sector, behind agriculture, service, and manufacturing.

How to become an FMCG Distributor in India?

In most circumstances, a corporation will appoint only one distributor in a given city. Anyone interested in becoming a distributor should keep an eye on whether areas of a corporation are empty. One can share their profile with firm employees so that if an opportunity comes, it can be presented to the right individual. 

In most circumstances, corporations would look for a firm's or individual's past expertise in FMCG distribution. It will be easier to create a case if you have past expertise. If someone does not have past expertise in that matter, it is preferable to have a partner since this will bring value to the firm and strengthen the argument. If someone is beginning an FMCG distribution firm for the first time, this is a good idea. If you don't have any experience, acquiring a bigger business or a distributorship with a well-known firm may be challenging. One may settle for a distributorship with a smaller company/brand.

Requirements to Become a FMCG Distributor

It takes many discussion sessions before a company decides to appoint a person as a distributor.

  1.  Th e capacity to invest in the company is the most important condition. If a person wants to become a distributor, they should be able to spend the same amount in the firm as the monthly turnover. 
  2.  The second prerequisite, after finances, is FMCG experience. Prior experience can aid in maintaining successful business functioning. Relationships with market retailers are crucial for expanding your business.
  3. All orders are collected, whether delivered or not the next day, as part of the service to shops. If a distributor fails to fulfil orders, the company's image will deteriorate, and retailers will stock items from competitors, resulting in a loss of market share.
  4. A distributor should be willing to extend credit in the marketplace; this will benefit the distributor as well as enhance turnover.
  5. A distributor must set up a warehouse, hire salespeople to recei   ve orders from the market, rent a truck to deliver items to the market, and utilise a computer system to charge and distribute invoices to merchants. 

Also Read: A Guide To Help You Start Your Own Wholesale Business

Conclusion

If you have a competent business strategy, you may use any distribution method. You may find several attractive distributorship possibilities in FMCG, with options for all sizes of organisations. It is, nonetheless, one of India's most competitive industries today. You may reap the rewards for the rest of your life if you plan carefully and get started as soon as possible.

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FAQs

Q: What is wholesale distributorship?

Ans:

These distributors mostly deal with perishable goods like wheat flour, pulses, rice, etc. Retail outlets normally purchase them from a wholesaler. So, a wholesale distributor is responsible for procuring these products from the source and delivering them to the wholesaler.

Q: Are licenses required to become an FMCG Distributor?

Ans:

Yes, a license is required before one can begin monetising their FMCG distributorship potential. They must first register their firm following state legislation. Then, to distribute their products, they must get a license from the FMCG producer. This implies that the FMCG manufacturers they chose will be under contract with them. The manufacturers then recognise them as authorised distributors who may sell their items to various retail stores.

Q: What are the types of FMCG?

Ans:

FMCG items are industrial or non-industrial goods that are widely consumed and frequently offered at a reduced retail price. These are frequently divided into durable products, non-durable commodities, and services.

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