07/09/2025
5 Common Mistakes During FMCG Distributor Appointment
During our consulting assignments, we observed that some companies have appointed distributors who are a terrible mismatch to their organization. I wondered, how such big error could have happened. Here's my understanding of top 5 reasons for such mistakes.
1. Relying Only on Past Experience
Many Sales Officers/ASMs select distributors based only past reference or reputation in another category. But what worked elsewhere may not work for your brand. Every category and company requires fresh evaluation.
2. Not Estimating Market Potential
Without proper market sizing (outlets, demand, volume/value), companies either appoint a distributor with too little capacity or overwhelm one with unrealistic expectations.
3. Appointing Distributor in a Hurry
Speed often compromises quality. Rushed appointments, without proper background checks or due diligence, lead to mismatches in resources, reach, and commitment.
4. Not Evaluating the Distributor
Evaluation must go beyond financial strength — check infrastructure, manpower, sales processes, technology adoption, and willingness to invest in growth. Skipping this leads to underperformance.
5. Not Explaining the Company Policies
When policies on credit, claims, targets, schemes, and margins are not clearly explained, misunderstandings arise. This damages trust and creates long-term disputes.