Beer and Softdrinks Dealership

Question:

What are the requirements to be a dealer of San Miguel Beer & Coke? How much is the initial purchase of the products? Thanks – mrloo2k

Answer:

For a dealership of either Coke or San Mig, you will need a lot of collateral. The amount is based on what area you are applying for. Lets say the area has an estimated sales volume of 5 million pesos a month, you will have to put up 5 million pesos cash or property as collateral. You will need a warehouse, routing trucks, salesmen, pahinante, all depending again on the area you are applying for. It is profitable, but you have to watch out for a lot of things where you can lose money like breakage, pilferage, theft, etc. you have to be 200% hands-on because you willl be handling cash and lots of credit.

I suggest you go to your local distributor and try to see if they can share the discounts with you. These companies outsource their distribution and they give them discounts for it. The distributors obviously go out and distribute the products to 3 channels, tertiary, secondary and primary accounts. So you probably have to go through them to distribute they have their own areas and you cannot encroach.

Tertiary market – sari sari stores, palengke etc. usually COD basis.

Secondary – if memory serves me right it follows the number of cash registers you have I think if you have 2 registers you’re part of this segment already. They also have more volume than the sari sari store and they usually order their goods before delivery.

Primary – these are the key accounts like SM and Robinsons, etc. This is usually a tough market simply because they like to lengthen their payables. If you don’t have working cap for at least 90 days you are going to be in big trouble serving this market.

Most big companies handle the big primary accounts and let their distributors handle the tertiary and secondary channels but the industry i think is changing and total outsourcing of logistics and distribution is being done or considered.

This is a game of operational efficiencies. Your discounts are fixed and it simply caps your earnings. If your expenses are too much you simply lose money. The industry is volume driven, you can make money if you can deliver enough goods at the lowest cost. Very sensitive to fuel fluctuations obviously and the principals are not quick to adjust discounts to cover the fluctuations.

Dealer Financing for San Miguel Beer Dealers

Union Bank and San Miguel Corporation launched a dealer-financing program. San Mig Line, as the product is called, was specifically designed by UnionBank to address the growing working capital requirements of SMC Beer Dealers’ to serve their franchise areas.

With the program already in full swing, we expect most of their dealers to benefit from San Mig Line. The roll out will be done in batches depending on the dealers’ franchise areas.

For more information, contact:

Ms. RB De Guzman – Investor Relations Manager
San Miguel Corporation
40 San Miguel Avenue, Mandaluyong City
Tel:  (02) 632-3752
E-mail: [email protected]
Web: www.sanmiguel.com.ph

sources: from posters of entrepreneur.com.ph message boards

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