People often wonder why some big-name distributors close up after only a few months/years in business. “Is it not to take items from point A to point B?” Well, running an efficient distribution network is not just about delivering goods, a lot of factors come into play here.
The pathways to the final consumer often differ based on the type of product. Digital products and services tend to go directly from the creator/manufacturer to the consumer. But when it comes to physical products, such as those consumed in homes daily, the pathways start to intertwine like a discombobulated twine ball. Some products have to move through several middlemen while others pass through fewer hands.
Over the years, a lot of FMCG companies are unable to recover the distribution costs i.e last-mile costs incurred by these pathways as they can’t do differential charging like eCommerce-based companies.
What Are Last-Mile Costs?
It is often assumed that last-mile delivery starts when the products are loaded into the vehicle and ends when they’re delivered to the customer but in the real sense, that is definitely not the case.
The last-mile delivery process includes product stocking, shelving, field sales, telemarketing, record reconciliation, order picking, product delivery, business analysis, and forecasting. All these processes as part of the delivery cycle have to be factored into the labour and overhead costs of order fulfilment.
How Distribution Services Can Foster Growth
Regardless of the industry, collaboration and outsourcing is a game-changer. To meet customer demands and still turn a profit, elements of the business such as distribution, warehousing, and fulfilment can be outsourced to third-party redistribution services. Here’s why TradeDepot is a perfect choice:
The Transparency of Preselling
“No credit today, come tomorrow”
While a popular saying, it’s one that a lot of FMCG manufacturers and distributors still struggle with and it has led to the closure of big-name Distributors. Having a system that allows you to pinpoint customer demand and direct supply in the exact amount of products is unarguably the best. Customers place their orders beforehand and only pay for the delivered goods. This helps with cash flow management and it keeps the entire process transparent.
Real-Time Inventory Intelligence
Being able to accurately fulfil customer orders requires adequate knowledge of their inventory purchase history. “When last did they restock?” “When is the best time to market new products to them?”, “In what locations are our products being sold the most?”. FMCG manufacturers and distributors need to have accurate knowledge of these to improve planning, fulfil orders fasters, reduce out-of-stock and replenishment errors and better resolve problems in the supply chain.
Maximizing the driver’s time is very crucial to an efficient last-mile delivery system. This can be done by optimising routes to efficiently schedule deliveries and stops. Leveraging on real-time data also helps the drivers to respond to changes throughout the day and ensure customer satisfaction.
This set-up also offers customers increased control over the delivery experience with SMS notifications and order tracking.
Verified Retailer Network
Newer FMCG companies often struggle with this – knowing the verified retail outlets to supply to and the capacity of the different retail outlets. At TradeDepot, we maintain a database of over 80,000 verified outlets across Nigeria and we use this data to segment the types of promotions that are sent out.
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