Wholesale and Distribution are two key components of any B2B sales channel. While distribution is more organized and account for lion’s share of b2b sales in urban areas – wholesale remains a prime source of retail supply in rural areas. In a country like India where 90% of retail market is unorganized, spanning across millions of small stores – its impossible to reach significant number of stores directly through distributors.
Usually, companies develop strong distribution channel in Tier-1 Tier-2 cities – but as one goes deep in the countryside, dependence on wholesale channel increases. Majority B2B supply to retailers in rural India happens through wholesalers. Typically, a brand selling Pan-India – may have a wholesale component ranging from 20% to as high as 50-70% depending upon category and concerned brand’s dependence on rural market.
Wholesale Vs. Distribution
Both wholesaler and distributor buys from manufacturer in bulk and sell to retailers. However, the similarity ends there ! A wholesaler is free to buy from any source, sell to anyone. He/she is under no commitment or contract. On the other hand a distributor works as extended sales arm of manufacturer. He/she buys a contracted product only from concerned manufacturer and sell within his/her territory. He is under contract to follow certain rules as laid down by manufacturer in distribution contract. He can not buy competitors’ products or sell outside his/her territory and report to manufacturer details of sales. In return, distributors enjoy certain privileges from manufacturers such as protected market, return of defective goods, marketing support etc.
Transformation Of Wholesale Relationship To Distribution
So, how does a brand develops wholesale and distribution channels ? Though mode of working of wholesaler is quite different from that of distributor – there is no water-tight separation between the two. Often a b2b relationship starts through a wholesale transaction as its the simplest way to start business. The buyer (channel partner) is under no commitment, so is the seller (brand). Both are free to go their own ways after transaction. If the buyer, who is actually a reseller, finds the product selling good in his/her downstream retail channel and giving decent margin – he/she, in all likelihood, would come back for repeat purchase. Over the years, the free wholesale relationship may transform into a better organized distribution arrangement – as mutual trust grows.
Building Complimentary Wholesale And Distribution Channels
All brands prefer distribution channel over wholesale as the former gives better market control and regular cash flow. However, today’s wholesale may bring in tomorrow’s distributors – so keeping a wholesale channel for territories not under distribution – is a pragmatic and profitable idea. So, brands should strive for distribution channel and a complimentary wholesale channel.
Online plays a major role in reaching out to channel partners across our vast country. This is a low-cost alternative to expensive, offline, traditional way of building distribution channel. Today’s Corona pandemic has made online essential and only viable way of reaching out. Frequent lock-downs and social distancing norms is forcing organizations worldwide to shift towards digital.
We are happy to announce forthcoming launch of online wholesale e-commerce platform BazarA2Z.Com. This online wholesale platform will work as complimentary to Vanik.com Online platform For Distribution Channel. Together, these two platforms will help any brand to develop both wholesale and distribution channels across India
Introducing BazarA2Z – Online Wholesale Platform
BazarA2Z is an online wholesale platform – exclusively for members of Vanik.com. Any channel partner in Vanik.com will be able to order products online. The sellers will be select manufacturers from Vanik.com. Anyone planning to use BazarA2Z platform has to register at Vanik.com and use the same user-id/password to log-in to BazarA2Z.com
BazarA2Z is a B2B E-Commerce Platform for wholesale transactions. Its a wholesale bazaar in online space with unique features – quite different from B2C platforms like Amazon or FlipKart. Some of its features are:
- Buyers will be able to place order in bulk
- All transactions in terms of lots (Minimum Order Quantity)
- Prices are dynamic – higher the order volume lower the price
- Ample scope for negotiation between buyer and seller
- Contact details of Buyer and Seller will be visible to each other
- We encourage direct interaction – outside BazarA2Z platform, if necessary
- Its more a relationship building platform – lead generation for wholesale trade
- Its totally free – We shall not charge any commission
- Only members of Vanik.com will be able to use this platform