10 Key Factors to Consider When Choosing Distributor Management Software

Most distributor management software looks the same on a sales call. Real-time dashboards, mobile apps, scheme automation, every vendor promises it. The gap shows up six months after go-live, when your distributors are still calling for stock updates and your finance team is still chasing claim proofs on WhatsApp. 

This guide tells you what goes wrong during DMS System rollouts across India, Africa, and the Middle East, and what can be done to avoid it.

What Is Distributor Management Software?

Distributor management software (DMS) is a system that tracks stock, orders, and payments across your distribution network. It is positioned between your company and retailer, and provides visibility of two distinct sales channels that most brands struggle with: Primary sales, Company to distributor and Secondary sales – Distributor to retailer.

Many businesses still rely on monthly Excel sheets submitted by distributors. These reports are often delayed and rarely follow a consistent format. When the sales head looks at the numbers, the stock has changed. A well-designed DMS fills in that void. It fetches stock, order and payment information from the distributor system or app, so what you see on a dashboard is what is happening in the warehouse that day.

In addition to visibility, there's a DMS that also handles three time-intensive processes in most distribution businesses: trade scheme calculation, claim settlement, and distributor onboarding. These are not minor frills, a company with hundreds of schemes open in the regions can waste days in a finance team just keeping track of schemes by hand. This is the true benefit of purchasing Enterprise Distributor Management software. Not for the Dashboard, but for what it takes off of a person's day-to-day job.

Key Factors to Consider When Choosing the Best Distributor Management Software

1. Real-Time Visibility Into Stock and Sales Data

Ask any distribution head what they want first, and they’ll say visibility. Real time reporting on what is in the Warehouse, what is moving and what is stuck, not a weekly report.

Delayed stock data can lead sales representatives to place orders for products that are unavailable while warehouses continue carrying slow-moving or excess inventory. Do not agree to any platform without a live demonstration of the stock updates, it should not be a static slide. Track the speed of orders from the retailer to the distributor's inventory.

2. Primary and Secondary Sales on One Platform

Most evaluation of Distributor Management Systems in India fails at this point. The buyers assume that primary sales tracking is a problem and secondary sales tracking is a separate problem, then they end up with two systems combined.

If SFA and DMS are separate databases, it will require someone to export the files and upload them manually each week. That's hours wasted on reconciliation and not doing something. To eliminate that step, PepUpSales' platform was designed with a single database back for both functions. When SFA and DMS are not natively connected, request a clear explanation of how the data flows from the SFA to the DMS and how often it occurs.

3. Scheme and Claim Management That Doesn't Need Follow-Ups

Trade-scheme management is another common reason DMS implementations struggle. A platform could manage stock and orders pretty well, but not bother with calculating schemes.

Search for scheme application and claims in bill, period scheme claims, and automated settlement, rather than merely creating schemes. Ask the vendor to create a live scheme when evaluating. A screen shot of a previous client doesn't tell you anything about its performance in your product mix.

4. Distributor and Retailer Onboarding Speed

The vast majority of Distributor Management system rollout delays take place in the course of onboarding, rather than post. Previous distributors papered registers or used simple Excel spreadsheets which required a considerable learning curve.

Ask how much time did it take for a similarly sized distributor network in the same industry? A vendor that has a true FMCG or Retail background should have a repeatable plan of implementation, not a one-off implementation plan based on your account.

5. Route and Beat Planning Built Into the Same System

Route planning is generally talked about as an SFA feature, but it directly impacts the performance of the distributor. If a beat plan, retailer coverage and distributor stock are stored in individual tools, coverage gaps are not detected until sales fall.

Separate visibility and suboptimal routes were hindering order-to-inventory alignment before they merged route planning with distribution information on PepUpSales. As soon as beat plans and stock visibility were on a single platform, their market coverage increased substantially.

6. Multi-Level Approval Workflows for Orders and Returns

Large distribution networks rarely rely on single-level approvals. Orders, returns and credit notes may require signature by a territory manager, and usually go to finance, and sometimes need both signatures.

Without the ability to configure approval chains, teams are forced to return to email threads for exceptions with a DMS. Ensure that approval workflows can be adjusted on a region and/or product category basis without developer ticket each time they are modified.

7. Reporting Depth That Goes Beyond Dashboards

Each vendor presents a dashboard demo. Not many show reports stand the test of reality, sell-through at the SKU level, aging of inventory with distributors, scheme ROI by product line, etc.

For a weekly look, generic dashboards are okay. Drill-down reporting is needed for decision making: which distributors are not performing, which SKUs are at a standstill and why. When signing, request a sample report from an existing client in your category.

8. Integration With Your Existing ERP and SFA Stack

A FMCG Distributor Management system which is not communicating with your ERP results in having a second source of truth, and somebody has to keep both. This is more important for businesses that are already on SAP, Oracle or a regional ERP.

Request detailed information regarding the integration timelines and experience of the vendor with this integration and any other ERP they have worked with and how long it took. Likewise, general responses on this matter generally indicate custom development, custom development means delays.

9. Scalability Across Geographies and Languages

What's good for 50 distributors in one state may not be good for 500 distributors in three countries. For expansion to Africa or the Middle East, see if they support multiple currencies, if they support offline functionality for low connectivity, and if they support local language for their distributor facing screens.

With thousands of SKUs and products being marketed in a variety of markets, Parle Agro wanted the kind of scale that could be executed simultaneously at various geographies and maintain a presence at the outlet. This is a different requirement than a single-market rollout, and not all DMS are created for it.

10. Vendor Support and Track Record During Rollout

The demo is always presented in a professional manner. The key is what goes on in week three after you make the change, when your distributors have questions, and your internal champion is overworked.

You should request references from a company like a similar FMCG, CPG, Retail, pharma or building-material firm and not just a case study PDF before signing. The vendor with true sector experience should get you in touch with a client that has been through the same rollout you are looking to make.

Common Challenges Buyers Underestimate while Selecting the Distributor Management system in India

Even if the software is a good fit, two issues appear frequently in the process of rolling out DMS:

• Change management on the distributor side. The problem with the adoption of the Best Distributor Management System in India isn't always the platform, however, quite often it's because the software distributors were not properly trained or were not made aware of a clear and early benefit to the software adoption process. If a distributor doesn't understand how the app can save them time, then they will continue to use their old register anyway and miss out on all the benefits.

• Data migration from legacy systems. There is frequently no one-to-one mapping of historical stock, scheme and payment data to the structure of the new platform. Product codes are not matching, the scheme formats are different and the old records have missing data. Take the time to budget for this step specifically,it is often underestimated in project timelines, and it isn't always the vendors' fault.

Choosing the Right Fit

The best distributor management software isn't necessarily the software with the most features listed on a comparison sheet. It's the one that integrates seamlessly into the way that you already do things, that you can get up and running with your current distributor network and that has a support team with experience in your specific industry.

With the existing solution, are there blind spots or slowdowns in the visibility of claims that could benefit from the use of a connected SFA-DMS platform in practice? 

Schedule a PepUpSales demo and get to see how stock visibility, scheme automation, and route planning work in harmony on one system, rather than three disjointed tools.