Growth & Strategy Conversations
A dealer network can carry your product across a state. It can also carry your unpaid invoices.
For many manufacturers and brand owners, dealers and distributors are the natural way to reach customers beyond their own town. The model works when roles, territories, margins and payment terms are clear. It struggles when stock piles up, credit stretches and each dealer is promised something slightly different. This conversation helps owners design the network before it grows.
Explore this page6 sections
The network is easy to start and difficult to correct.
Appointing the first few dealers is usually exciting. Each promises volume, each wants the best margin and the biggest territory, and each is told whatever keeps the relationship warm. A year later the business may find overlapping areas, uneven pricing, large dues and a stock of goods sitting in godowns it cannot see.
The strategy comes before the appointments: how many partners, with what roles, on what terms, with what credit, and with what rules about price and territory. This conversation helps owners design those rules while they are still easy to set.
What the conversation covers
36 topics across 7 areas. Seven decisions behind a dealer or distributor network.
Roles: Distributor, Dealer, AgentThe words are used loosely, so define them.5
- A distributor, who typically buys in bulk and supplies dealers or retailers in an area
- A dealer, who typically sells to end customers
- An agent, who typically takes orders for a commission without owning the stock
- Which role you need for your product and your customers
- What each is responsible for: stock, delivery, service, collection
These descriptions are general. What matters is what you and the partner agree they mean.
Territory and ExclusivityWho sells where.5
Some restrictions in distribution agreements, such as fixing resale prices or restricting who the partner may sell to, can raise questions under competition law. Check the current position with a lawyer before including them.
- One partner per area or several
- What exclusive means, and what you get in return
- How to handle customers who cross territories
- How much volume a territory must deliver to stay exclusive
- What happens to a territory when a partner underperforms
The Margin LadderWhat each level earns, and whether the price still works.5
A hypothetical example with made-up round numbers: you sell at Rs 70, the distributor passes it on at Rs 80, the dealer sells at Rs 100. If you then add a Rs 5 scheme and the distributor’s freight rises, someone’s margin has vanished, and it is often yours. The session uses participants’ own figures.
- Your price to the distributor
- Distributor margin and the price to the dealer
- Dealer margin and the price to the customer
- Schemes, incentives and freight
- Whether each level earns enough to care, and the customer still buys
Credit, Collections and StockWhere networks usually get into trouble.5
- Credit limits and days, set per partner
- What happens when a partner exceeds them
- Pushing more stock than the market can sell, and what follows
- Returns, damages and old stock
- A simple weekly view of dues and stock in the field
Selling goods is not the same as being paid for them.
Choosing and Checking PartnersBefore the first order.5
- Their track record with other brands, and references from those brands
- Their reach, godown, staff and vehicles
- Their financial standing, as far as you can honestly tell
- Whether they also carry competing products
- How they treat the end customer
What to Put in WritingPlain terms both sides can read.6
- Territory, products and price or margin structure
- Credit limit, payment days and consequences of delay
- Targets, if any, and what happens if they are missed
- Use of your name, logo and trademarks
- Term, renewal and how either side can end it
- Return of stock and handling of dues on ending
This is awareness, not legal advice. A lawyer should review the agreement, and an accountant should advise on tax and GST treatment.
Supporting and Reviewing the NetworkDealers sell what they understand and what is easy to sell.5
- Training, displays, samples and simple material
- Fast handling of orders and complaints
- A review of every partner each quarter
- How to correct, replace or add partners fairly
- Selling direct as well, and how that affects dealers
What participants leave with
- A territory sketch for their own product
- A margin ladder using their own prices
- A credit and stock policy on one page
- A partner-checking checklist
- A list of agreement points to take to a lawyer
What this session is not
- A matching or introduction service for dealers or distributors
- Legal or tax advice, or an agreement template
- A promise that a dealer network will raise sales
- A financing scheme for stock or dues
How the session runs
A small group, two to three hours. Participants bring a product with its approximate cost and price, and a rough idea of the area they want to cover. The facilitator works through a hypothetical network, then each participant draws their own: territories, roles, margin ladder and credit rules. The group asks the hard questions a dealer would ask, and the questions an accountant would ask about dues. Participants leave with a draft network plan and a list for the lawyer.
What your students leave with
- A clear idea of the difference between a distributor, a dealer and an agent
- A territory plan: how many partners, exclusive or open, and why
- A margin ladder from their price to the end customer, with their own numbers
- A credit and stock policy that protects cash
- A checklist for choosing and checking a dealer or distributor
- A list of points for the written agreement, ready to take to a lawyer
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
Set the rules for territory, margin and credit before you appoint the partners.
Tell us who your students are and what stage they are at. Sessions are free for participants.