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Indian distribution models involve many intermediaries between companies and their retailer customers and have varying costs and benefits. The wholesaler model, for instance—in which large, powerful wholesalers buy products from manufacturers and sell them to the retailers that they finance — gives producers little control over the distribution channel but provides considerable reach. In contrast, under the distributor model, the distributor acts as an extension of the manufacturer and operates exclusively within a specified territory. Other distribution channels involve dealers, who operate as both wholesalers and retailers and are served directly by the manufacturer. Still others involve various stockists and sub-stockists. All these intermediaries can add complexity when they wear two hats at once, as they often do. A distributor selling to retailers in one territory, for example, might have a retail presence of its own in the same or a different territory.


Distribution models in India vary by the number of layers in the channel, the intermediaries used, and the number of channel partners. Every model requires manufacturers to make a tradeoff between their degree of control and their reach. The goal is to find a balanced mix of approaches that confers a unique advantage depending on the sophistication of the market.

(Source: Boston Consulting Group)

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