In theory, when suppliers need to sell product through customer, they often propose middle man like national distributor, local distributor, wholesaler or sub-wholesaler to deliver product to customer or end consumer.
Each tier of middle man will enjoy product margin as they preferred or standard market rate, etc..
But in reality, consumer product (especially, fast moving product) will not only be sold by Traditional Trade channels to local retailers(Urban + Rural), but also other channels will jump down to sell the same retailers as well.
It result to price competitive across channel and it will hurt under floor price situation in the market.
Moreover, “Gun Runner” who perform as trader and match large-big volume with cheaper price between seller and buyer in the market will stimulate more critical situation.
To avoid it, the solution of suppliers are prioritized and figure out by time to time as below
- Balance channel portfolio (MT, TT, CVS, Indochina or Export)
- Allocate quota for customer harmful
- Control floor price across channel via by trade marketing deployment
- Reflect volume supply with real demand
- Build another product portfolio, new channel development, new customer shop type
However, business have to grow every year, thus the solution should be flexible via by uncertain market.
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