DUS Formula Application to FMCG Industry

Dear Alok,

I read few of your articles. I must say it is brilliant.

I am trying to set-up a FMCG sales network for commodities ( high volume, low margin, where branding is not that important) in Maharashtra. My father had small factory in Patna which manufactures and sells agarbattis. The product was great and we are market leader there. Quality was also awesome.

After my MBA, I wanted to dirty my hands in business so I started selling it in Mumbai by appointing few distributors. I hired salesmen and sales manager. I took a job through which I paid them salary.

I realized that it was seasonal item so I decided to add other products and commodities came in my mind. I added Haldi, Mirchi, Dhaniya. I am now adding tea and the probably snacks. I kept the same name of all products “Ramayana”.

My point is simple that one salesman and distributor can serve one retailer by multiple products. I focused on commodities as I can’t have expertise to produce everything. I only do packaging. However, I maintained the quality by reducing my margin by 5%. Thinking that as products will grow, sales will grow and I will break-even and then make profit. I am doing it with job and following profit/loss way of doing business as you explained in one of your articles.

After 2 years of hard-work, it seems to show result as I have been maintaining the quality and can proudly say, always ranked within top 3 in these categories. But I fare dismal in your equation. I rated each of the parameters and tested it. Why is it so? Am I doing something horribly wrong which I am not able to figure out. Please comment.

However, I need to mention that I have job experience is software and finance but not in FMCG. I am an engineering graduate from Roorkee and MBA from CMU. Founder of soSasta.com, Ananya Bubna, is my good friend & CMU batchmate. I discuss with him and he said your business is good. What is your view?

Vikash

p.s: requesting all other members to also comment and help.