Part 3 · FMCG trade practice · Chapter 3.19
Kinds of retailers
Draft: the wording may change.
The idea
Not every shop is the same customer. A kirana, a chemist, a wholesaler and a supermarket chain buy differently, pay differently and need different terms. Tag each shop with its kind — its channel — and set its price, scheme, credit and visits by that tag, not by who shouts loudest.
The kinds
| Kind | Who | Typical order | How they pay | What they want | What to watch |
|---|---|---|---|---|---|
| Kirana | The general store on the street — Ravi Stores | Small, many lines, every week | Cash or bill-to-bill | Regular visits, schemes, quick delivery | Most of your outlet count; easy to lose if visits stop |
| Small shops | Tea stalls, bakeries, pan shops | A few packs of fast movers | Cash | Small packs, change, a salesman who stops | Low value per call; often better served by van |
| Chemist | Medical shops that also keep personal care, baby care and health foods | Few lines, steady | Usually on credit days | Clean stock, correct batch and expiry, easy returns | Expect strict expiry returns; check the company's expiry policy first |
| Wholesaler | Sells onward to smaller shops — Murugan Traders | Large, few lines | Credit, often pushes for more days | Lower price, bigger schemes | Stock moving into another stockist's area; schemes meant for retailers |
| Modern trade | Supermarkets and chains with a head office | Purchase order to a store or warehouse, delivery within a date window | Long credit, with deductions | Delivery on time, full quantity, promotions | Short-delivery penalties, deductions you did not expect |
Quick-commerce dark stores are a newer kind, often supplied by the company directly; check with the company before you sell to one.
At the counter
A kirana order. Ravi Stores orders 14 lines: 2 cases of cream biscuit, half a case of Marie, 12 packs of cookies, some soap and tea. Value ₹6,400. Bill-to-bill. Kumar visits every Monday.
A wholesaler order. Murugan Traders asks for 50 cases of cream biscuit only, at ₹5 a case below PTR, with the retailer free-goods scheme on top and 21 days' credit. On ₹26,100 of goods that is ₹250 of extra discount plus 150 free packs, about ₹1,230 of scheme. Before saying yes, ask: where will these 50 cases go? If they go to shops on your own beats, you are selling to your own customers at a lower price. If they cross into the next stockist's area, the company will hear about it. And the circular in chapter 3.12 excludes wholesale outlets, so the free packs will be cut from your claim.
A modern trade order. A local supermarket chain sends a purchase order for its warehouse: 40 cases across 8 products, to be delivered between the 10th and the 12th. You deliver 38 cases on the 12th — two were out of stock. The warehouse receiving note shows 38. The chain pays in 45 days, minus a short-supply deduction and a promotion charge from a supplier agreement nobody read. Read the agreement before the first order, and keep a list of every deduction against its clause.
Set terms by kind
Once each shop has its channel tag, the rules follow:
- Price — wholesalers may get a different price list, and the company may fix it.
- Scheme — the circular says which channels qualify.
- Credit — kiranas bill-to-bill, chemists 15 days, modern trade per agreement.
- Visits — weekly beat for kiranas and chemists, phone and fixed days for wholesale.
Common mistake
Treating a wholesaler as a big kirana. He gets the retail scheme, the lowest price and the longest credit, because his orders are large. The free packs are rejected from the claim, his cheap stock undercuts your own kiranas, and his outstanding grows faster than his sales. Large is not the same as profitable.
Where you'll use this
In Part 4, channel is a field in the customer master (chapter 4.3). The software then picks the right price list, allows only the schemes the shop qualifies for, and applies its credit rule when the bill is made (chapter 4.4).
Check yourself
- Which kind of shop usually expects strict expiry returns?
- Why ask a wholesaler where the stock will go?
- A supermarket pays for 38 cases when you were asked for 40. Why might it also deduct money?
Answers
- The chemist.
- Because cheap stock can undercut your own retailers or cross into another stockist's area, and wholesale is often excluded from retailer schemes.
- Its supplier agreement may charge for short or late supply, and for promotions. Read the agreement before the first order.