Classification of Wholesaler in Indian Pharmaceutical Industry
The various functions of super distributor in pharmaceutical marketing areas under:
1. Maintenance of Sufficient stock position as per market demand.
2. Maintenance of stock as per storage conditions as per protocol laid by drug authority of India
3. Resale of the company product to other appointed company stockists
4. Providing a database with respect to various aspects of redistribution like sale and stock position in terms of value, unit and product to the company.
5. Providing stockists wise outstanding and receivables every month to the company.
6. Reimbursement of credit note regarding expiry and stock return.
7. To provide market information related to company strategy as well as competitors.
Therefore super distributor is like a C&F agent also with a few differences like super distributor purchases goods from the company i.e. having paid inventory where as a C&F agent is only responsibility for providing a facility like warehousing, redistribution network and office assistance.
Beside this depot manager holding a post is discharging his duties for only one company in case of super stickiest and in case of C&F agent can work for more than one company at a time.
B) Authorized Dealer or Stockists or Accredited Wholesalers:
In distribution channels, market penetration of the company’s product at Chemist level depends mainly on his appointed dealer or stockists. So its functions are same as with super stockists or super distributor like maintaining stock position, maintenance of storage condition as per criteria laid by drug authority, providing details related to sales, settlement of credit notes against expiry, breakage and goods return to retailers etc. And resale the product amongst retail Chemist, dispensing doctors, nursing homes, etc. but the major difference between super distributor and stockists is.
1. Super distributor is assigned for geographically large territory and his order quantity of product is significantly large where as stockists are at district/districts orTaluka levels and he is catering only local retail Chemist, dispensing doctors, nursing homes etc.
2. In supply chain generally transfer of goods is from manufacturers to super distributor to stockists to retail Chemist.
Sub-stockists in general terminology also called as ‘under cutter’. Sub stockists is mainly responsible to cater small territory but the company does not directly appoint him as a stockists. Sub-stockists rarely get the facility directly from the company, & he has to depend on stock supply from stockists only.
D) Clearing and Forwarding (C&F) Agent:
As already discussed C&F agent is like a super distributor only with a difference of ownership of goods as with super distributor. It is also true that C&F agent is a body virtually operated by the company itself like its own depot. A fixed amount of receivable or in simple term service charge or percentage of sale is given to C&F agent as an operational charge varies with a company policy and sales ratio. Its core functional areas involves
1. Providing storage facility as per guidelines described by the company and Drugs and Cosmetic Act,
2. Execution of supply order and maintain of receivable from the stockists
3. Providing details related to sales record and sales tax to respective department,
4. Providing feedback related to market information to the company etc.
In some companies C&F agent is also a mediator of redistribution of promotional materials like gifts, samples etc. to the field force. C&F agent prepare the stockists bill i.e. invoice on behalf of company therefore risk is shouldered by the company in itself.
The agreement between company and C&F agent involves various terms like accepting security deposit equivalent to one month sale of the assigned territory in the form of bank guarantee or cash or both, reimbursement of regular or coincidental expenses like freight charges etc. on behalf of mutual understanding only.
Also it has been observed that the company are paying fixed amount of commission to C&F agent ranges between 1.5 to 3% of sales depends on various parameters against the expenses incurred by C&F in the form of rent of go-down and office, salaries of labor and staff etc.