Distributor vs Wholesaler vs Retailer | Distribution Channels | Tech Kichdy

Summary

This video script delves into the intricacies of the FMCG distribution network, explaining the roles of key channels like distributors, sub-distributors, wholesalers, and retailers. Distributors are the central players, buying directly from manufacturers and selling in bulk to smaller units. Sub-distributors handle specific territories, while wholesalers operate on a larger scale, especially in rural areas. Retailers, the smallest unit, are the only ones interacting directly with end consumers, providing the last-mile delivery. The script highlights how each channel contributes to efficiently getting products from manufacturers to consumers.

Takeaways

• 😀 Distributors are the major and central value chain in the FMCG distribution network, handling large volumes of goods.
• 😀 Distributors typically buy products directly from manufacturers like P&G, Unilever, or Nestlé and sell them to sub-distributors, wholesalers, or retailers.
• 😀 Distributors usually only work with one manufacturer, but some may handle multiple manufacturers depending on territory and product range.
• 😀 Distributors do not sell directly to end consumers; they sell products in bulk to other channels in the distribution network.
• 😀 Sub-distributors are smaller units that handle stock for specific territories and typically buy from distributors rather than manufacturers.
• 😀 A sub-distributor may work with multiple distributors in a region and does not have a direct relationship with manufacturers.
• 😀 Like distributors, sub-distributors do not sell to end consumers, focusing on bulk sales to other parts of the supply chain.
• 😀 Wholesalers are large retailers who manage retail units on a bigger scale, often serving multiple villages in a central town.
• 😀 Wholesalers buy stocks from distributors or sub-distributors and sell to smaller retail outlets, such as local kirana stores.
• 😀 Retailers are the smallest unit in the FMCG distribution network, directly interacting with end consumers and managing the final sale of goods.

Q & A

What is the role of distributors in the FMCG distribution network?

Distributors are the major players in the FMCG distribution network, handling large volumes of goods. They act as the central link in the supply chain, buying products directly from manufacturers like PNG, Unilever, or Nestlé and selling them to sub-distributors, wholesalers, or retailers.

How do distributors interact with manufacturers?

Distributors purchase products directly from manufacturers and do not typically sell directly to consumers. They are often exclusive distributors for certain manufacturers, though they may deal with multiple manufacturers depending on their territory and product range.

Can a distributor deal with multiple manufacturers?

Yes, while distributors generally work with a single manufacturer, they can sometimes deal with multiple manufacturers, especially if the distributor has a larger territory or handles a broad range of products.

Do distributors sell products directly to consumers?

No, distributors do not sell products directly to end consumers. They operate in bulk transactions, selling to sub-distributors, wholesalers, or retailers rather than individual buyers.

What distinguishes sub-distributors from main distributors?

Sub-distributors are smaller entities within the distribution network. They handle smaller quantities of stock and operate mainly within specific regions. They buy products from distributors and sell them to other channels, but like distributors, they do not sell directly to consumers.

How do sub-distributors buy their products?

Sub-distributors purchase their products from distributors, not directly from manufacturers. They may deal with multiple distributors, depending on the availability and product needs within their assigned regions.

What is the difference between a wholesaler and a retailer in the FMCG distribution chain?

Wholesalers are large-scale entities that buy products in bulk from distributors or sub-distributors and sell them to smaller retailers. Retailers, on the other hand, are the final units in the distribution network, dealing directly with consumers by selling products in smaller quantities.

Where are wholesalers commonly found in rural areas?

In rural areas, wholesalers typically operate in centralized towns that serve multiple nearby villages. Small kirana stores from these villages purchase their goods from the wholesalers in these central locations.

What is the primary function of retailers in the FMCG distribution chain?

Retailers are the smallest units in the distribution network and play a crucial role in reaching the end consumers. They are the only link in the distribution chain that directly interacts with consumers, selling products in small quantities.

Do retailers have exclusive relationships with distributors or manufacturers?

No, retailers generally do not have exclusive relationships with distributors or manufacturers. They deal with multiple distributors and brands, purchasing various products to sell to consumers.