10 Distributor problems in emerging markets how to avoid them

Working with distributors in emerging markets can sometimes be challenges, as they sometimes lack expertise, capital, and management to drive your business toward. Below are some factors to consider when working with distributors in emerging markets:

1. Not covering all the outlets– track and monitor outlet distribution on a regular basis. Ensure the customer list and maps are up to date.
2. Service levels drop– work with distributors and get an understanding of why service levels are going down.
3. Lack of experience– the distributor does not have the required category experience to do the job. Invest in training or evaluate alternative distribution options.
4. Financial problems– some distributors go out of business due to poor cash flow and working capital management. Identify problems and determine how you can overcome it. Sometimes it is better to walk away.
5. Price rises– get a clear understanding of distributor costs and why they need to increase prices.
6. Poor management– good people are hard to find. Make sure distributors have the right people and the right organisation structure.
7. Category conflict– select distributors that are serious about your business and avoid operators selling competitor products.
8. Corporate deafness– your distributor is unwilling to follow your company requirements as requested. It’s time to find a new distributor.
9. Poor truck utilisation– identify the right distribution vehicles and evaluate drop sizes.
10. Legislation– the rules concerning distributors can change in any country. Watch the horizon for new legislation and potential delivery restrictions.