Posted by For most of the past decade, the distributor was cast as the problem. Start-ups across Africa raised hundreds of millions of dollars on the promise of cutting out the middleman: an app on the shopkeeper’s phone, goods bought direct from the manufacturer, and delivery the next day. The local distributor, with his warehouse, his trucks and his notebook of customer debts, was meant to become a relic.
It did not turn out that way. Many of those platforms have closed, merged or changed course, and some of the survivors now look a lot like distributors themselves. For any company that sells to spazas, dukas and kiosks, the lesson is clear: a good distributor remains one of the most valuable partners you can have. The question is how to choose the right ones and get the most out of them.
The bet against the distributor
Between 2020 and 2022, B2B ordering platforms such as Wasoko, MaxAB, Twiga, MarketForce, Sabi and Alerzo raised more than $400 million to digitise informal retail. Most planned to replace layers of wholesalers and distributors with their own warehouses, fleets and apps.
The results have been humbling. MarketForce shut down its ordering platform in 2024 after signing up 270,000 merchants, citing price wars and thin margins. Kenya’s Copia was liquidated. Twiga Foods, which raised more than $185 million to bypass traditional distribution, spent 2025 buying controlling stakes in three established FMCG distributors in Nairobi, Kisumu and Mombasa before one of its entities entered administration in 2026.
The companies that adapted best moved closer to the existing chain rather than further from it. In Egypt, Cartona built an asset-light platform on the view that the country’s wholesalers and distributors should be made more efficient, not displaced. MaxAB–Wasoko bought Fatura, a marketplace that links hundreds of wholesalers to retailers. In South Africa, Yebo Fresh, the best-known township ordering platform, was acquired in 2024 by Smollan, an established retail services and distribution group.
The platforms did not fail because technology was the wrong idea. They struggled because the distributor’s job turned out to be much harder, and much more valuable, than it looked from outside.
What distributors do that platforms could not
A good distributor does four jobs at once. Each is hard to replicate, and together they explain why the middleman has proved so resilient.
They know the market
A distributor’s sales team visits the same outlets week after week. They know which shopkeeper pays on time, which street floods in the rainy season, and which products move in which neighbourhood. That knowledge is a ready-made source of customer insight. A distributor with good relationships will also tell you what competitors are doing, from new launches to price cuts and promotions, often before it shows up in any market data. And because their reps talk to shopkeepers every week, they can test new ideas and products and bring back honest feedback faster than any survey.
They carry the credit
Most micro-retailers cannot pay cash for every order. Distributors extend short-term credit to the outlets they know and, just as importantly, collect it. They know who to trust, how much and for how long, and their reps are at the counter every week to collect. This is the part of the job the platforms found hardest. Lending to thousands of small shops from investor money proved risky, and it is no coincidence that the survivors have rebuilt themselves around credit and payments.
They make the economics work
A manufacturer cannot deliver a few cartons to each of thousands of shops profitably. Distributors solve this by taking bulk deliveries into their own warehouses, which cuts the manufacturer’s transport and storage costs, then breaking bulk into the small, frequent orders shops actually need. Many deliver daily on request, and outside normal hours or at weekends. They also carry complementary products from other suppliers, so the cost of each delivery is spread across a fuller order. That combined basket is what makes a route to small outlets pay, and it is exactly what single-brand or venture-funded delivery models struggled to match.
They drive sales at the point of purchase
Distributors run their own promotions, push new lines with shopkeepers they know, and offer services beyond delivery, from merchandising to stock advice. In markets where the shopkeeper decides what goes on a crowded shelf, that relationship can matter more than any advertising campaign.
Where distributors fall short
None of this means distributors are perfect. The weaknesses that start-ups set out to fix were real, and any manufacturer relying on distributors needs to manage them.
Coverage is often patchy. Distributors tend to concentrate on the profitable, accessible outlets close to their depot and neglect smaller or more remote shops, which leaves gaps in a brand’s reach. Many carry competing brands, so your products compete for their sales team’s attention. Data is usually thin: few distributors can tell you what each outlet bought last month, let alone what it sold. Credit can become a trap for shopkeepers tied to one supplier, and long chains with several layers of wholesalers add cost and make it harder to see where stock goes, which in some categories opens the door to grey imports and counterfeits.
The answer is not to replace the distributor but to choose well, set clear expectations and give them better tools.
How to get more from your distributors
The companies that serve micro-retailers best treat distributors as long-term partners rather than order-takers. In practice, that comes down to five things.
First, choose for coverage and capability, not just size. A smaller distributor with strong relationships in the right neighbourhoods, a reliable fleet and sound credit control is often worth more than a large one spread thin.
Second, agree on who covers which outlets. Clear territories and outlet lists, with targets for numeric distribution as well as volume, stop distributors from serving only the easy shops.
Third, share the cost of serving small outlets. Support with vehicles, sales reps or incentives for reaching remote shops can close coverage gaps that a distributor would never fill on their own margins.
Fourth, give them simple tools. The most useful technology to come out of the platform era is the kind that makes distributors better: ordering apps their reps can use at the counter, basic stock and sales data, and digital payments that make credit easier to track and collect. Keep it simple enough that reps actually use it, and do not introduce several systems at once.
Fifth, use the data together. Outlet-level sales and payment records, shared both ways, let you see which shops are growing, where stock runs out and which outlets could safely take more credit.
The middleman is here to stay
The distributor survived the platform boom because the job is about relationships, credit and the economics of small, frequent deliveries, none of which an app can replace on its own. Technology still has a big role to play, but it works best in the distributor’s hands rather than as a way around them. For manufacturers, the opportunity now is to invest in the distributors they already have.
For a full framework to design, pilot and scale a route-to-market model for micro-retailers, including how to select and manage distributors, see our Route-to-Market presentation. To discuss your own distribution network, contact TSCL.
