Every Entrepreneur and Sales Head we work with asks the same question: “How can your Distribution Management System (DMS) help us push more product through the chain?”
Most companies obsess over Primary Sales (Company –> Distributor) because that is where their immediate revenue comes from. However, the real health of your business lies in Secondary Sales (Distributor –> Retailer) and Tertiary Sales (Retailer –> Consumer).
If you don’t track secondary sales, you are driving your business blindfolded. Leveraging secondary inventory data is the key to unlocking growth. Here are 6 compelling reasons why you need to master this data.
1. Smarter Production Planning (Beating the Bullwhip Effect)
Have you seen this? During Diwali, your product is out of stock. And just after Diwali, you have dead stock lying and expiring.
Why does this happen?
This is called the Bullwhip Effect. A small change in demand at a Kirana shop becomes a big fluctuation at the distributor level and creates total panic at the factory level.
When you only see primary sales, you are guessing. You think distributors are ordering less, so demand is low. But in reality, retailers still have old stock.
When you track secondary sales data, you see the real demand from the market. You know exactly what is selling at the retail counter.
So you can:
- Forecast accurately
- Avoid stock-outs in peak season
- Avoid over-stocking and expiry
You produce what the market actually needs, not what your distributor thinks he needs.
2. Launch of new product
Launching a new product is like launching a startup. You hope it will be a blockbuster, but most new launches fail. Why?
Because companies depend on gut feeling and manager’s perception. They don’t use real data.
You cannot remove 100% risk from a new launch. But you can reduce it a lot.
How? With secondary sales data.
For example, you launched a new mango drink. With secondary data, you can immediately see – In which city is it moving? Which type of Kirana store is picking it up? Is it selling with your old product or replacing it?
You can match its sales curve with your old successful products. A good DMS with some smart analytics can even predict when the product will grow and when it will slow down. You save lakhs of rupees by not over-producing a failing product.
Read More – 8 Ways To Improve Distributor Sales Performance
3. Optimization of Sales Push
In a competitive market, getting even 5% extra growth is very tough. What do most sales managers do? They run behind their star outlets. The big supermarkets and top Kirana stores.
We suggest the opposite. Try our “Bottom 10” Campaign.
Use your secondary sales data and find your 10 weakest outlets. These are shops where your sales are very low compared to the shop’s size and location.
These shops are your hidden gold.
Maybe the distributor is not visiting them. Maybe your product is not visible. Maybe they have old stock.
Just push your sales boy and distributor to focus on these bottom 10 outlets for 3 weeks. Fix their issues.
We have seen companies grow their total sales by 3-4% in just a few weeks just by fixing the weak links. You don’t always need new shops; you need to make your existing shops work better.
4. Distributor and sales team evaluation
Appointing a good distributor and a good sales team is costly. Retaining them is even more costly.
But how do you judge them? If you judge based on personal opinion, your team will feel demotivated.
You need numbers that everyone can see.
SalesBabu DMS gives you a Balanced Scorecard for every distributor and sales rep.
You can judge them on real data:
- How much did secondary sales grow?
- How many new retailers did he add?
- How many bills did he cut daily?
When you show a sales guy his own numbers, he feels empowered. He knows exactly where to improve. No argument, only data.
Read More – Advantages Of Using A Cloud Distribution Management System
5. Marketing planning
Investing more in Trade or Consumer Marketing is a question that can easily create a war between the Sales & Marketing departments. Promoters from both sides can have long-time arguments on the cost and efficacy of them both. The number of factors on which the sales number depends would easily be in 3 -4 digits. So how do we come to know if it is an issue of trade marketing (PUSH) or consumer marketing (PULL)?
With one of our clients, our team deciphered this seemingly unsolvable puzzle by a simple metric, ‘Ds – days of stock in a retail outlet’. If the number Ds was greater than the benchmark, it needed more Pull (consumer marketing). If the number Ds was less than the benchmark, it needed more Push (Trade marketing).
SalesBabu aggregated these numbers and the company had a readymade strategy for everyone including the territory, region, and team.
6. Inventory optimization
Let’s be honest. Every sales manager wants to load more stock to distributors and retailers. They think – “If we dump more stock, they will be forced to sell.”
This works for a short time. But what is the cost?
Old stock on shelf, customer complaints, product returns, expiry, and angry retailers. Especially for FMCG, food, and pharma products, this is a big loss.
For a big, demanded brand, you should not load the market. You should optimise it.
You need to keep just the right amount of stock at each shop – not too much, not too less. And this “right amount” changes every week.
You cannot decide this manually. You have hundreds of products and thousands of retailers.
Only secondary sales tracking can tell you what is the ideal inventory for each outlet. You reduce returns, you reduce expiry, and your retailer stays happy.
What Happens If You IGNORE Secondary Sales?
If you don’t track it, this will happen to you:
- You will have fake sales reports. Your primary sales is high but market is full.
- Your distributors will start returning goods.
- Your retailers will lose trust in your brand.
- Your production team will always be confused.
In short, you lose money without knowing why.
How SalesBabu DMS Helps You Track Secondary Sales Easily?
You don’t need to call your distributor daily and ask for data in Excel. That era is gone.
SalesBabu Distribution Management System (DMS) automates everything:
- Your sales team or distributor’s billing software automatically syncs secondary sales bills.
- You see live dashboard – which product is selling where, right now.
- You get alerts for low stock, no-order outlets, and expiry risk.
- You get ready reports for production planning, team evaluation, and inventory.
You finally get visibility of the ground reality.
Conclusion
Tracking Primary Sales pays the bills today, but tracking Secondary Sales builds the business for tomorrow.
By implementing a robust Distribution Management System (DMS), you gain visibility into the ground reality. This allows you to plan production better, launch products successfully, and keep your distributors and sales team aligned with your goals.
Ready to gain visibility into your secondary sales? Equip your business with SalesBabu DMS and turn data into revenue.
