[ A HANDBOOK ON FMCG SALES ] 4.2.3. Distributor Termination Process Distributors are extremely important for a company and therefore termination of a distributor should be the last resort after giving enough chances to the distributor to improve. The following could be the reasons for terminating a distributor: Unethical & Fraudulent practices Lack of interest in business Poor Finances Un-hygienic conditions in Godown No following company policies Physical assault or abusive language with sales team The process to be followed for terminating a distributor is as follows: Collect evidence of any of the above and speak to the distributor If the problem persists collect more evidence and issue a warning letter to the distributor. If the problem continues, the ASM to meet the distributor and ask him to resign. Along with the resignation letter get a No Dues Certificate/ Condition No Dues Certificate from the distributor. In case the distributor does not resign, a suitable termination letter to be issued by the HO invoking the distributor agreement. The Distributor has to be given enough time to wind up his operations and collect credit from the market. A new distributor to be appointed only after the expiry of the above period. 4.2.4. Claim Settlement process Schemes are passed in the market in two ways: a) Primary Scheme b) Secondary Scheme The primary schemes are allowed in the invoice itself and hence there is no need to prepare a claim. However, secondary schemes are run by the distributor and later on claimed from the company. The Secondary claims can be of the following nature: Normal Trade Schemes Quantity Purchase Schemes Visibility Schemes 27
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