Empower 3, Wynad5 October 2013

By

M.K. Syamaprasad MenonState President

All Kerala Distributors Association

mksprasadmenon1@gmail.com94470 42500

What is AKDA?

An association of Distributors in Kerala, aimed at harmoniously promoting the welfare of

Distributors through collaboration with other Trade organizations, Unions, Government,

Manufacturers, Retailers & Fellow Distributors.

Distributor is a bridge between the Producer & Consumer

Distribution is a critical link in the Supply Chain

Buying

Selling

Making

Moving

Warehousing

Disintermediation works for some

products only…

A Distributor manages people & invests personal time in the business, apart from providing Capital

Capital can fetch 9% p.a at SBI – Risk and Stress Free!!

• Pay for purchases from the manufacturer.• Provide Credit in the market.•Fund operational expenses.•Manage Credit judiciously•Deal with Bank notes•Collect and deposit cash•Reconcile payments

A distributor takes ownership of supplies & product placement in outlets

Distributor’s expectations are simple!

1. Return on capital plus a reasonable salary for management time.

2. Any other issue which affects Point 1 directly or indirectly.

The challenge is to effectively deal with Point 2.

Economics change – one has to engage in constant negotiation with Stakeholders

Companies want to cut costs and maximize sales/profit

Government decides taxes and levies

Unions and Trade organizations have various

interests

Entrepreneur/Distributor finds and allocates capital

Distributor

Profit Margin

AKDA Vision• Fulfill the expectations of its members and associates.

• Help the Distributors seek understanding & gain respect from Manufacturers

• Manage conflicts amicably.

• Create a level playing field between the Manufacturer & the

Distributor.

• Ensure Distributors are treated in a fair manner

• Stand together as a fraternity to protect the profitability and viability of a Distributor.

• Position Kerala as a benchmark in FMCG Distribution.

Profitability is paramountWhen a business is profitable,

• Stakeholders are happy.

• Customer service improves.

• Up skilling and investing in training becomes possible.

• Better trust and mutual respect

• Healthy business practices in the market

Healthy Market Practices1. Additional credit and discounts at the sole discretion of the Distributor.

2. Area encroachment does not happen

3. Forcing supplies to irresponsible customers who delay payments

4. Speedy settlement of damaged goods

5. Dumping of stocks in low demand seasons.

6. Take interest in Distributors’ incremental profits by giving Brand extension and new products to the same distributor.

7. Uniformity of Schemes, terms and conditions.

8. Transparency in schemes (duration, disbursement, settlement)

9. Settlement of Secondary Schemes by refunding additional costs incurred.

10. Uniformity in AIDS

11. Consultation before reduction of Operating margins or any other financial support.

12. Timely discussion and redressal of any hits taken by the Distributor on account of changes in Taxes, Duties, Compliance needs.

13. Implementation of Proprietary software through discussion as against unilaterally imposing.

14. Proper and logical segmentation of outlets and products

15. Deposits placed by Distributor must bear interests.

What we will try to achieve

• Margins must grow by 50% from current situation.

• Margins must be exclusive of Allowance, Incentives, Disbursements, Subsidies.

• Business practices must be fair, transparent and honest.

• Change in economic circumstances must be addressed in a timely manner

• Create a level playing field.

Regulating FMCG Companies

• Acknowledge and respect the Distributors role.

• Openly discuss margins, targets

• Secure entrepreneur’s investment and show him the business is sustainable.

• Have an ongoing dialogue with AKDA

• Share quarterly, half yearly & annual plans

• Adopt Healthy business practices

• Decline of a distributor must be seen impacting the Brand negatively.

AKDA – Value Proposition

• Fighting & Litigating are counter productive

• Collaboration is the key to success

• 1 x 1 is always 1. Together, we have strength to face adversities.

• A forum for amicable management of conflicts

• AKDA can facilitate new business opportunities

• Networking for knowledge transfer (software, accounting, statutory matters)

Role of AKDA• Representations to the Government on

regulatory matters impacting the members.- Stamping of bills by Commercial Taxes Dept.

- Mis classification of goods- Extension of due dates for filing• Creating a level playing field.• Escalating unresolved matters to higher ups in

Organisations.• Dealing with Labour, Unions and getting an

understanding with them

Future of AKDA

• Next line of leadership development

• More meaningful engagement with stakeholders

• More sharing of knowledge and development of members

• Productive engagement with Manufacturers in AKDA (as co sponsors) – a forum for mutual interaction in relaxed setting.

Next line of Leadership

• AKDA Legacy must continue to the Next generation.

• Identify young leaders to take up leadership roles.

• Create specialized teams from IT, Legal, Statistics, Taxes, Welfare etc

• New ideas, New thoughts, New ways of doing business

Meaningful engagement?

• Seminars & discussions on Budget, Taxes and levies.

• Knowledge development programmes for members

in areas of new technology, statutory compliance, finding, managing & retaining workforce, financial workshops, working under pressure, dealing with people, leadership development etc.

• Sessions involving our staff and Principals – Fun and bonding.

• Periodic newsletters for information dissemination.

Leadership is about collaboration!

• Applying Emotional intelligence to our work.

• Keeping Healthy and taking care of self

• Managing Stress

• Dealing with tough people in a non threatening manner

• Taking a legal position via effective correspondence.

Good Luck!