Most MSME manufacturers approach distributors thinking about what they need from the distributor — shelf space, retail coverage, market reach. The manufacturers who consistently get distributors to say yes approach the conversation from the opposite direction: what does the distributor need from me?
Understanding how a distributor evaluates a new brand is the single most useful thing you can do before your first distributor meeting. It shapes what you prepare, what you say, and how you respond to the questions that will inevitably come.
The Distributor's Business Reality
Before understanding what distributors look for, understand the business they are running.
A typical North India FMCG distributor runs on thin margins — 10–15% on most categories. Their profitability depends on high volume and fast inventory turnover. Every product they add to their portfolio ties up working capital in stock and requires their sales team to spend time promoting it to retailers.
They are not primarily evaluating your product — they are evaluating whether your product will generate reliable, profitable, fast-turning volume for their business. Every question they ask is ultimately about this single concern.
The First Thing They Check: Margins
Before anything else, a distributor will check whether your margin structure works. They will look at your MRP and your asking price and calculate their margin immediately. If it is below category benchmark — typically 10–14% for food products — the conversation is effectively over, even if they are too polite to say so.
This is why pricing is the first thing you should get right before approaching any distributor. If the margin does not work, nothing else about your product matters.
Come to the meeting with the margin calculation already done and presented clearly. Show them: MRP, your selling price to them, their margin percentage, the retailer margin percentage. Distributors who see a manufacturer who has done this work clearly and professionally are immediately more confident that the relationship will be professionally managed.
Product Quality and Consistency
The second thing distributors evaluate is whether your product quality is consistent and whether it will generate repeat purchases from consumers.
A product that is excellent on the first batch but variable on subsequent batches creates returns, retailer complaints, and damage to the distributor's reputation with their retail clients. Distributors have been burnt by manufacturers who promised consistency and delivered variability.
Bring samples to the meeting. Let them evaluate the product themselves. If you have consumer feedback or testimonials from your existing market, bring that too. Any evidence that real consumers are buying your product repeatedly is more valuable than any pitch you can make.
Packaging and Shelf Presence
Distributors know their retail clients' shelves intimately. They know what sells and what gets overlooked. They evaluate your packaging through the eyes of the retailer and the consumer.
The questions they are asking themselves when they look at your packaging:
- Will this stand out on a shelf that already has five competitors in this category?
- Does it communicate quality at the price point?
- Is the MRP clearly marked and does it look competitive?
- Is the packaging practical for retail handling and storage?
- Does it meet FSSAI labelling requirements?
Poor packaging is a silent deal-killer. A distributor will often decline a new brand politely without telling the manufacturer that the packaging was the real reason. If your packaging is not retail-ready, address it before approaching distributors.
Supply Reliability
The third most important factor for distributors is your ability to fulfill orders reliably and on time. This matters more than most manufacturers realise.
A distributor's relationship with their retailer clients depends on reliable supply. If they introduce a new product to 50 retailers and then cannot fulfill the reorder because the manufacturer has a production or logistics problem, they have damaged their own reputation with those retailers. They will not put that reputation at risk for a manufacturer they do not trust to deliver.
Be honest about your production capacity and lead times. A distributor who understands your real capacity and plans around it is a better partner than one who has been over-promised and is regularly disappointed.
Marketing and Promotional Support
Distributors are pushing dozens of products simultaneously. Their sales team has limited bandwidth. Without consumer pull or trade support, your product will always be lower priority than an established brand that advertises and runs trade schemes.
When a distributor asks what marketing support you are providing, they are asking: will you do anything to make this product easier for me to sell?
Even modest marketing activity — a seasonal trade scheme, a retail display stand, a WhatsApp marketing campaign to local consumers — signals that you are invested in the product's success and not just expecting the distributor to do all the work.
Be specific and realistic about your marketing commitments. A distributor who has been promised marketing support that never materialised is a distributor who will not believe the next manufacturer who makes the same promise.
Credit Terms
Most distributors will ask about credit terms. This is a negotiation, not a requirement.
New manufacturers with no track record should expect distributors to ask for cash on delivery or advance payment on the first order. This is reasonable — the distributor is taking a risk on an unknown brand and does not yet know if you will fulfill your commitments.
As the relationship develops and trust is established, credit terms of 30–45 days are standard. Be cautious about extending long credit terms early — slow payment from a distributor is one of the most common reasons MSME manufacturers run into cash flow problems.
The Questions They Will Ask
Come prepared for these specific questions that distributors consistently ask new brands:
Where else are you selling? They want to know if your product has been validated in other markets. If you are already selling in two or three cities, that is a positive signal. If you are asking them to be the first, you need to compensate with particularly compelling margins or samples.
What is your monthly production capacity? They need to know you can supply the volume their network will eventually require.
What is your FSSAI status? For food products, a current FSSAI licence is non-negotiable. Have the certificate ready to show.
Who else is distributing your product? They want to know if they are getting exclusive territory or competing with other distributors for the same product in the same area.
What do you do if the product does not sell? This is the returns question. Have a clear, fair return policy ready. A manufacturer who stonewalls on returns is a manufacturer distributors will not work with a second time.
How to Walk Into the Meeting
Show up with:
- Product samples — let them taste or use the product
- A one-page brand and product summary with MRP, margins, and key selling points
- Your FSSAI licence copy
- A simple distributor agreement draft
- Clear answers to all the questions above
The distributor across the table is evaluating not just your product but you — whether you are a serious, reliable, professional partner. The preparation you bring to the meeting is the most direct signal of the kind of manufacturer you are.
SalesVridhi prepares our clients for distributor meetings and handles the outreach and negotiation on their behalf. If you want to understand what your current readiness for distributor conversations looks like, try our free Growth Score tool or talk to us directly.
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