Terms of Operation

Sales force of distributor is divided into 3 heads namely:

1. Milk Products
2. Chocolates
3. Other products

• All the 3 teams visit the retailers once in a week on different Days
• Sales force is complimented by a weekly visit to the district by the sales executive of the company
• Idea is to supplement the lags in the distribution by wholesaler and in certain specific cases to push extra stock in
the market
Credit Policy

• Distributors are termed as Cash Distributors because the company charges the distributors
before the stock is delivered

• Company has connected the distributor online and the transactions happen online
• The distributor sells goods on credit; the period of credit ranges from 1-2 week
• The wholesaler allows discount of 1% on cash payment (policy followed by the
wholesaler)
Stock Policy

• As per the company regulations the distributor is supposed to maintain a stock of 3 weeks which
in monetary terms equals to Rs. 30 lakhs for the distributor.

• Stock is formalized by the company; the dealer can negotiate on 3-4 end days, the stock policy is
formed for the month

• Distributor to push in slow moving SKU’s clubs them with fast moving SKU’s for the retailers

• Company DUMPS significantly on the distributors, the distributor has to mange the supply by the company
Lead period

• Lead periods in providing stocks to the dealers differs from the SKU and quantity ordered
• Some SKU’s like dairy products are delivered correspondingly with taking order but some are
sent from the warehouses
• A higher quantity ordered has to be replenished from the Warehouse

Return Policy

• Company follows a policy of return when the product has past its expiry date, damaged or has a
defect
• Replenishment is done with cash and happens at the end of
every six months

Return on Investment

• Company does not give any guarantee to the distributor

Terms of Operation(contd..)

Storage policy

• Distributor maintains Cold Storages and Deep

Freezers for thestorage of the products

• Distributor has to bear all expenses pertaining to

Infrastructurerequirements
Sales Force

• The remuneration and all other expenses for sales

force areborne by the distributor.
 Selection of Channel Partners

 Capital Investment

 Varies from region to region

 C & F Agent :3-5 Crores
 Super Stockist:60-80 Lakhs
 Distributor:25-30 Lakhs
 Relevant experience

 Prior experience in FMCG sector is preferred to save on training expenses

 Distributor should not be dealing in Competitor’s product
 Should handle entire range of Nestle products (Both fast and slow moving
SKU’s

 Infrastructure
 Godowns / Storage space with appropriate refrigeration as per product
needs
 Delivery vehicles
 Salesmen
 Order Delivery System

DBSRs take the order in morning and delivery takes place in evening or next day morning by delivery boy.
 Counter Analysis
Types of Counter
• Super Market
• Small Grocery Store
• Big Grocery Store
• Convenience Store
• Paan Plus
• Chemist
 Nestle’s Margins
C &F Super Stockist Distributor Re-Distributor Wholesaler Retailer

1.5% 2-2.8% 5.8% 3.8% 1.5-2% 7-8%

 Schemes
Secondary schemes:
Promotional schemes to
consumers & Trade Partners
Such as free packs for
Consumers,gifts,bundling,pric
e off etc.
For retailers:Coupon,Bulk
discount,Additional
Margin,Free packs