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Distributor Management System | Guide
by Bizom
August 08, 2023 | 08 min read
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A distributor management system has become an indispensable tool today for every manufacturer and distributor to manage the vast inventories of products and ensure the steady flow to stores. Today, every established and emerging company has set up a distributor management system to get real-time visibility on secondary sales and build higher route-to-market efficiency.
What is a Distributor Management System?
A distributor management system, abbreviated as DMS, is a set of applications that eases the interaction between manufacturers, distributors, and retailers regarding the sale or purchase of products, order & returns management, inventory management and trade promotion management.
Strategies built with keeping DMS in focus have elevated the level of modern business to higher degrees. The advent of DMS in the business world is beneficial for large business groups and smaller ones.
To understand the concept of DMS in a better and more straightforward manner, you can go through the following example.
Suppose a person named Pavan Sharma has set up a business of making notepads. Initially, he sells his notepads in his locality, having a small-scale business. Later, he decides to expand his business by increasing the sales range, thereby reaching other markets. What will he do now? Of course, he will contact distributors of different localities. These distributors will help Pavan expand his business by taking bulk orders of notebooks and selling them to their network of retailers and sub-distributors.
Meanwhile, Pavan’s workload increases. He has to keep records of every detail like the names and addresses of different distributors he approached, the number of notebooks ordered by each distributor, total profit made in different localities, distributors’ share in the profit, and many more details. All the data collection and calculations complicate the entire procedure of doing business, and selling a single notebook becomes time-consuming and laborious.
Here comes the need for an efficient distributor management system. With it, you can efficiently deliver your products or goods to their final destinations without any hassles. It also reduces the bulk of keeping data records, thus, saving time and ensuring a good business strategy.
Bizom’s distributor management system for example, oversees a company’s complete downstream supply chain from manufacturer to distributors at the point of sale, including inventory management, order fulfillment and sales returns, primary order and billing, secondary order booking, schemes and discounts, distributor claims, collections, reports and dashboards. This allows businesses to reduce the manual work load, and focus on increasing their capabilities to grow in the market.
What are the benefits of a Distributor Management System?
The benefits of a distributor management system are multifold. From helping distribution flow effortlessly everyday, to helping businesses monitor every movement in primary sales, the software has become a must have for every consumer goods company. The following highlights the critical role of distributor management systems and why they are indispensable tools for achieving unparalleled success in today’s competitive landscape.
1. Streamlining Supply Chain Operations
A well-implemented distributor management system serves as the backbone of supply chain operations. It streamlines the flow of goods from production to the end consumers, eliminating bottlenecks and reducing lead times. By optimizing supply chain processes, consumer products brands can ensure that their products reach the market swiftly and efficiently, enhancing customer satisfaction and loyalty.
2. Enhanced Inventory Management
For consumer products brands, maintaining the right level of inventory is a delicate balancing act. Overstocking leads to excessive carrying costs, while understocking results in lost sales opportunities. A robust distribution management system provides real-time visibility into inventory levels, demand forecasts, and sales trends, empowering brands to make data-driven decisions. This, in turn, minimizes inventory holding costs while ensuring products are readily available to meet consumer demand.
3. Expanding Market Reach
In the digital age, reaching consumers across multiple channels is vital for a brand’s success. Distributor management systems enable seamless integration with e-commerce platforms, brick-and-mortar retailers, and even direct-to-consumer channels. By tapping into these diverse avenues, consumer products brands can expand their market reach and capture new customer segments, amplifying their growth potential.
4. Efficient Order Fulfillment
Today’s consumers demand fast and accurate order fulfillment. With a distributor management system, consumer products brands can optimize order processing, track shipments in real-time, and offer multiple delivery options. Timely and efficient order fulfillment not only improves customer satisfaction but also fosters positive word-of-mouth marketing, creating a virtuous cycle of customer loyalty and brand advocacy.
5. Data-Driven Decision Making
Successful sales leaders know that data is the lifeblood of growth. Distributor management systems generate a wealth of data on sales, inventory, and customer behavior. Armed with this valuable information, consumer products brands can make informed decisions, such as identifying top-performing products, understanding customer preferences, and tailoring marketing strategies to resonate with target audiences.
6. Seamless Collaboration with Retail Partners
Collaboration with retail partners is a cornerstone of consumer products marketing. A robust distribution management system facilitates seamless communication and coordination between brands and retailers. By sharing vital information on sales performance, inventory levels, and promotional activities, brands can foster strong partnerships and mutually beneficial strategies for sustained growth.
In today’s fiercely competitive consumer products landscape, a well-implemented distributor management system is not just an advantage; it’s a necessity. Brands that embrace these systems unlock the power to streamline supply chain operations, enhance inventory management, expand their market reach, and foster efficient order fulfillment. Moreover, the ability to make data-driven decisions and seamlessly collaborate with retail partners cements their position as industry leaders.
But choosing a distributor management system rests completely on understanding your distribution channels objectives clearly.
What are the types of distribution channels?
- Wholesaler: Goods are distributed from manufacturers to wholesalers in this channel. For example, liquor distillers distribute their brands of liquors to wholesalers.
- Retailer: Goods are distributed from manufacturer or wholesaler to retailers. For example, big name designer clothing and accessories are distributed to higher end retailing chains such as Neiman Marcus, Nordstrom and Macy’s.
- Distributor: This channel moves goods from the source or manufacturer to an authorized distributor. For example, a Ford factory distributes various Ford makes and models to authorized Ford dealerships for sale to consumers or company fleets.
- Ecommerce: This is the newest and most disruptive distribution channel wherein goods and services are represented virtually online and then distributed directly to the consumer. Ecommerce as a fourth channel has led to rapid changes and makes distributors rethink their traditional strategies.
So, ideally the distributor management system that you choose should be able to connect all channels of distribution to some extent. It’s also imperative to find a distributor management system that comes with the best capabilities to match your business needs.
What are the features of Distributor Management System?
As a Distribution management system is an automated platform for managing the circulation of products from the point of production to the point of consumption, the software is designed with several features (listed below) to enhance the seller-buyer relationship.
1. Inventory Management
Manufacturers can upload a detailed list of their stocks, whether raw or finished products. It offers a real-time business picture as it can be easily viewed and managed. Stocks are added or reduced based on GRN (Goods Received Note) generated and on the completion of secondary orders, respectively. Even distributors can view and audit these inventories.
2. Order Management
Distributors can apply for new orders or cancel previous orders based on consumers’ demands and stock availability in the warehouse. Consumers can customize orders according to their needs.
3. Order Fulfilment and Route Management
DMS can easily track Orders. You can access the product’s real-time location from the initial point of dispatch by the manufacturers to the endpoint via warehouse and distributors. This “Track Your Sales” feature of DMS has enabled users to cope and keep up with the time. When an order is completed, GRN (Goods Received Note) is generated with proper invoicing. This helps to keep a record of the circulation of each product and maintain the inventory. Distributors can even suggest better routes to a salesperson for quick delivery.
4. Secondary Order Booking
This feature enables you to book orders and buy from retailers. You can track your orders even if you buy from retailers. Retailers get an option to accept or reject orders. You can see the reduction in stock after the successful accomplishment of secondary orders.
5. Scheme Management
This feature allows firms to know about their customer’s preferences and accordingly set the deals and provide them with offers and discounts. Watch here>>
6. Sales Return and Management
Here, you can also return the purchased order if some mishap happens with the goods or dissatisfaction with delivery. You can also track the return on sales. Watch here>>
7. Payments and Transactions
This is one of the best features of DMS. It offers different ways of paying bills, like through credit or debit cards or using net banking. Thus, it minimizes the hassle of traditional cash handling, the conventional cash flow method in a business. Also, you can view your previous transaction records anytime and manage your capital.
8. Performance Tracker
This feature permits you to observe different manufacturers, distributors, and retailers’ performances to make wise decisions in business and help you manage future sales.
9. Distributor Claims
Distributors against manufacturers can register claims regarding price changes or discount vouchers.
10. Dashboard and UI
Distribution Management System applications are designed with a user-friendly and attractive interface. The dashboard has options to view detailed reports of a salesperson, distributors as well as retailers. You can even view reports while offline or with a low connectivity internet without getting your work halted.
In today’s scenario, the moment any retail business seeks growth, the first step comes to having a solid distributor management system, so that they not only survive but thrive in the ever-changing market, securing their position as market dominators and leaving a lasting impression on consumers worldwide.
How to choose a distributor management system?
1. Assess Your Business Needs
Before diving into the sea of options for a distributor management system, take a step back and assess your unique business needs. Ask yourself critical questions: What are your current pain points in the distribution process? What are your growth objectives? Do you require integration with e-commerce platforms or other sales channels? By gaining a clear understanding of your requirements, you lay the foundation for choosing a system that aligns seamlessly with your brand’s aspirations.
2. Opt for Scalability and Flexibility
In the dynamic world of consumer products, change is the only constant. Your chosen distributor management system should be scalable and flexible to accommodate your business’s evolving needs. As your brand expands, so should your distribution capabilities. Look for a system that can easily handle increased order volumes, new product lines, and growing distribution channels without compromising on performance or efficiency.
3. Embrace Cloud-Based Technology
In today’s digitally connected world, cloud-based distributor management systems offer unparalleled advantages. These systems provide real-time access to data, seamless collaboration among team members, and the ability to manage operations remotely. Cloud-based solutions also eliminate the burden of maintaining expensive hardware and infrastructure, allowing you to focus on your core business activities.
4. Ensure Seamless Integration
A distributor management system that can smoothly integrate with your existing enterprise resource planning (ERP) system, customer relationship management (CRM) software, and other essential tools is essential. Seamless integration ensures that data flows effortlessly between systems, avoiding data silos and enhancing overall efficiency. This synergy allows you to make data-driven decisions and have a holistic view of your distribution processes.
5. Prioritize User-Friendly Interface
The success of any technology depends on its ease of use and adoption by your team. A user-friendly distributor management system reduces the learning curve and encourages widespread acceptance among employees. Opt for a system with an intuitive interface that simplifies daily tasks, minimizes errors, and increases productivity.
6. Evaluate Reporting and Analytics Capabilities
Data is the lifeblood of effective marketing strategies. Your distributor management system should provide robust reporting and analytics capabilities, enabling you to gain insights into sales performance, inventory levels, customer behavior, and more. Armed with this information, you can make informed decisions, optimize your supply chain, and identify growth opportunities.
7. Verify Vendor Reputation and Support
Selecting the right distributor management system is not just about the technology; it’s also about the vendor behind it. Research the reputation of potential vendors, read customer reviews, and inquire about their customer support services. A responsive and reliable vendor will be a valuable partner in your brand’s growth journey.
Conclusion
Choosing the perfect distributor management system for your consumer products brand is a pivotal decision that can impact your business’s success in the long run. By carefully assessing your business needs, prioritizing scalability and flexibility, embracing cloud-based technology, ensuring seamless integration, and focusing on user-friendly interfaces, you can position your brand for streamlined distribution operations and accelerated growth.
Remember, data-driven decision-making and robust reporting capabilities are invaluable in today’s competitive landscape. With the right distributor management system in place, your marketing strategies will be empowered, and your brand will forge ahead as a trailblazer in the ever-evolving world of consumer products.
Bizom’s distributor management system runs the distribution engine of leading consumer product companies such as Parle Agro, Hershey’s, Mother Dairy, Orient, UNIBIC, Shell, Reckitt, Lactalis, Piramal, Philips, Orion, Polycab, and 600 more.
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Frequently Asked Questions (FAQs)
What is the role of a merchandiser?
A merchandiser is responsible for planning, executing, and monitoring merchandising activities. This includes selecting and arranging products, setting up displays, managing inventory levels, and analyzing sales data to optimize product placement and sales performance.
How does effective merchandising impact sales?
Effective merchandising can significantly impact sales by attracting customers' attention, increasing product visibility, and creating a compelling shopping experience. Well-designed displays and strategic placement can lead to impulse purchases and higher customer engagement.
What are some common merchandising strategies?
Common merchandising strategies include product bundling, cross-merchandising (placing complementary items together), seasonal displays, end-cap promotions (displays at the end of aisles), and interactive product demonstrations.
How do retailers decide which products to merchandise prominently?
Retailers often consider factors such as product popularity, seasonality, profitability, and consumer demand when deciding which products to merchandise prominently. They may also analyze sales data and conduct market research to make informed decisions.
What is the difference between visual merchandising and digital merchandising?
Visual merchandising involves creating appealing physical displays within brick-and-mortar stores to attract customers. Digital merchandising, on the other hand, focuses on optimizing the online shopping experience through strategies like personalized product recommendations and website layout improvements.
How can I create an effective merchandising plan for my store?
Creating an effective merchandising plan involves understanding your target audience, analyzing product performance data, planning product assortments, designing eye-catching displays, and regularly evaluating and adjusting your strategies based on customer feedback and sales results.
What is the role of data analytics in merchandising?
Data analytics plays a crucial role in merchandising by providing insights into customer behavior, purchasing patterns, and product performance. Retailers can use these insights to make informed decisions about product placement, pricing, and promotional strategies.
How can I measure the success of my merchandising efforts?
You can measure the success of your merchandising efforts by tracking key performance indicators (KPIs) such as sales revenue, conversion rates, average transaction value, and foot traffic. Regularly analyzing these metrics will help you assess the effectiveness of your strategies.
Are there any software tools available for merchandising?
Yes, there are various software tools and platforms designed to assist with merchandising tasks. Tools like Bizom Smart Merchandising helps with inventory management, in-store sales analytics, visual merchandising planning, and digital merchandising optimization.
