distribution agency of fmcg product

1. Distribution
Agency

2. Table of Contents
 EXECUTIVE SUMMARY
 BRIEF DESCRIPTION OF PROJECT
 CRITICAL FACTORS
 INSTALLED AND OPERATIONAL CAPACITIES
 GEOGRAPHICAL POTENTIAL FOR INVESTMENT
 POTENTIAL TARGET MARKETS
 DISTRIBUTION PROCESS FLOW
 PROJECT COST SUMMARY
 Useful Project Management Tips

3. EXECUTIVE SUMMARY
 Located at any densely populated city
 Fast Moving Consumer Goods (FMCG)
 Undertaken in all small 2nd tier towns
 06 tonnes each of tea and powdered milk and 08 tonnes
each of biscuits and chocolate / toffees etc per month to the
retailers.
 capacity to distribute around 50 tonnes of product and initially
they will be utilizing 56% of proposed capacity
 Total Cost Estimate of the project is Rs. 1.249 million

4. EXECUTIVE SUMMARY
considerations or factors for success of the project are :
1.Product and Brands to be distributed
2. Negotiation and Marketing Skills
3. Credit Recovery

5. BRIEF DESCRIPTION OF
PROJECT
 Product
 Location
 Target Market
 Employment Generation

6. CRITICAL FACTORS
 Products and Brand
 Background Experience
 Marketing Skill
 Strong Sub-distributor
 Skilled & Experienced Manpower


7. INSTALLED AND
OPERATIONAL CAPACITIES
 Total 05 persons will be justifying their job description .
 New brands and two of confectionery products .
 Potential and anticipated expansion
 Products are perishable, efficient distribution operations
would be necessary.
 Warehouse for more than 03 days

8. GEOGRAPHICAL POTENTIAL
FOR INVESTMENT
 Consumerism and increase in population
 Influx of rural population into urban
 Business can also be done in all small second tier towns
 Suburban towns

9. POTENTIAL TARGET
MARKETS
 Domestic market of above 185 million consumers
 Urbanization have led to demand of distribution agencies
 Consumerism and fuelled demand
 Target market for the proposed set-up is retail stores in
densely populated cities

10. DISTRIBUTION PROCESS
FLOW
Companies evaluate following capabilities of the
interested distributors :
 Location of distributor’s business premises.
• Financial position and credit standing of the distributor.
• Knowledge and experience of the distributor.
• Storage and showroom facilities of the distributor.
• Ability of the distributor to secure adequate business and to cover the
market.
• Capacity of the distributor to provide after sale service.
• General reputation of the distributor and his sales force.
• Willingness of the distributor to handle the entrepreneur’s products.
• Degree of co-operation and promotion service he is willing to provide.

11. PROJECT COST
SUMMARY
 Analyze the commercial viability of Distribution Agency
 Various cost and revenue related assumptions along with
results of the analysis
 Income Statement, Cash Flow Statement and Balance Sheet

12. Project Economics
 Financial model have been calculated for distribution of 28 Tons
/ Month of Packed
 Monthly Sales of these items based on certain assumptions
such as Distributor’s price and quantity of sales are calculated
to be Rs. 8.32 million.
 Profitability are highly dependent on effective management of
logistics, general reputation of distributor and its sales force.

13. Project Financing
Total Equity (10%)…………Rs.124,900
Bank Loan (90%) …………Rs.1,124,10
Total Project Cost………. 1,249,000
Space Requirement :
Space required for Distribution Agency is 2,000 Sq. ft. where 200
Sq. ft. will be used for Management Office and 1,800 Sq. ft. will be
used as Godown.
Human Resource Requirement

14. Revenue
Generation
The revenues are based on assumption of monthly Sale
Proceeds of Rs. 8.32 Million of Branded Tea, Powdered Milk,
Biscuits and Confectionary items with an annual sales volume
growth rate of 5% and price growth rate of 7%. On an average
distribution margin is 2% of total sale proceeds.

15. CONTACT DETAILS OF
CONSULTANS /
EXPERTS
 Following are a few significant distributors with sub-
distribution options:
 • Universal Distributors Limited (UDL),
www.universaldistribution.org/
 • International Brands Limited (IBL), www.iblgrp.com/
 • Burque Corporation, Premier Distributor,
www.burque.com.pk/
 • Muller & Phipps (M & P), www.mulphico.pk/

16. Useful Project
Management Tips
1.1 Technology
• List of Machinery & Equipment
• Computer & UPS
• Printer
• Fax & Telephone
• UPS & Battery
• Furniture
• Energy Requirement: Should not be overlooked and
alternate source of energy for critical operations be
arranged in advance

17. 1.2
Marketing
• Sales & Distribution Network: Expert's advice and distribution
agreements are required with distributors & retailers.
• Price - Bulk Discounts, Cost plus Introductory Discounts: Price
should never be allowed to compromise on quality. Price during
introductory phase may be lower and used as a promotional tool.
Service cost estimates should be carefully documented before price
setting. Government controlled prices should be displayed, where
applicable.

18. 1.3 Human
Resources • List of Human Resource
 • Owner
 • Sales Staff / Outdoor Booking
 • Manager Accounts & Store
 • Driver / Loader
 • Security Guard
 • Adequacy & Competencies: Recruitment of skilled and experienced staff should
be considered an investment.
 • Performance Based Remuneration: Attempt to manage human resource cost
should be focused through performance measurement and performance based
compensation.
 Training & Skill Development