The sales process for FMCG and CPG companies isn’t a one-step transaction from point A to point B. Products move from manufacturers to distributors, sometimes through wholesalers, then to retailers, and finally to consumers. Most often, this journey is divided into three stages:

• Primary sales – where companies sell to distributors
• Secondary sales – moving products to retailers
• Tertiary sales – where consumers make the purchase

Each stage plays an important role in keeping shelves stocked, meeting demand, and driving revenue. A great product alone isn’t enough — you need a smart sales strategy to ensure the product flows smoothly through the supply chain.

In this article, we explore each sales stage in detail, along with how FMCG and CPG brands can leverage technology to optimize these stages to maximize sales and minimize losses.

Understanding Primary Sales

Primary sales mark the first transaction in the supply chain, where manufacturers sell products in bulk to distributors or stockists. As a B2B sale, it helps FMCG and CPG brands track initial demand and is usually reported as revenue before consumers even make a purchase.

Let’s look at this with an example: Nabati is an indulgent snacking brand with a strong presence in over 25 countries. And their most popular product is their wafers. So primary sales for Nabati would be selling these wafers in bulk to distributors in different countries and regions. The amount they make from selling to distributors is also their net new revenue — irrespective of whether it’s bought by a customer down the line.

However, a high primary sale does not guarantee strong consumer demand. Unsold stock can remain in the supply chain. And consequently, if a distributor finds a product unprofitable or slow-moving, they may hesitate to reorder, affecting future primary sales.

Apart from revenue generation, primary sales are important for two other reasons:

• Brand equity: As it’s the first point of contact between manufacturers and distributors, on-time delivery and consistent supply prove brand reliability and encourage distributors to actively promote it within their retail network.
• Market reach: An optimized primary sales approach is key to long-term growth, helping you expand your distributor network and meet demand efficiently — ensuring your products are always stocked and ready to sell.

Some key factors that can influence primary sales are:

• Brand popularity: The recognition and reputation of a brand play a big role in driving primary sales. Well-established brands tend to have higher sales due to consumer trust when compared to smaller brands.
• Distributor’s financial health: Many manufacturers offer credit periods, but if a distributor is facing financial constraints or struggling to sell, they may reduce order quantities.
• Trade promotions and incentives: Manufacturers can drive higher primary sales through well-planned trade promotions. Bulk discounts, loyalty programs, and special schemes can encourage distributors to stock more products.
• Market demand and trends: Consumer purchasing — influenced by factors like seasonality or trending products — can also impact primary sales. By aligning product offerings with what customers want during any given period, manufacturers can encourage higher distributor orders.

Understanding Secondary Sales

Secondary sales is the movement of goods from distributors to retailers. This is the second stage in the FMCG & CPG supply chain and one of the best indicators of product demand in the market. Because, unlike primary sales — which depend on a distributor’s stocking preferences — secondary sales reflect actual retailer demand based on consumer purchases.

Going back to the example in the above section, this is where Nabati’s distributors would sell the product to individual retailers. This is still in bulk, but varies based on existing stock and demand in each retail outlet. Also, during secondary sales, the quantity of each product flavor sold can vary based on demand, giving companies a clear picture of which flavors are popular. These insights help manufacturers analyse product demand and success, fine-tune production, and keep inventory in check.

This also means they directly impact future primary sales. If secondary sales slow down, there would be no purchase orders from distributors — meaning a higher risk of product returns, potential losses due to expiry, and reduced cash flow. This, in turn, can impact your net revenue and overall market competitiveness.

Some key factors that influence secondary sales include retailer demand, consumer behavior, and seasonality. For example, Haldiram’s — an Indian snack brand — saw a 12% increase in its Kaju Katli sales during the Diwali season in 2024.

Similarly, a retailer’s decision to stock and promote a product depends on its profitability — higher margins, incentives, or attractive trade schemes can all help here.

Now for the tricky part — here are some challenges that manufacturers and distributors may face with secondary sales:

• Stock misalignment: If distributors overstock products that retailers don’t need, it can lead to excess inventory and potential wastage. Understocking, on the other hand, can lead to missed sales.
• Retailer trust: If retailers aren’t “motivated” to stock a product, they may prefer competitor brands. A lack of retailer incentives or trade promotions can slow down secondary sales.
• Limited data visibility: Many FMCG and CPG brands struggle with tracking real-time secondary sales, making it difficult to forecast demand accurately.

But the good news: DMS software — like Botree DMS — can help brands support distributors and address most of these challenges:

• Provide distributors with real-time sales insights to help them gauge order quantities accurately. In case of unexpected losses, you can set up automated workflows for seamless returns and claim management.
• Implement custom trade schemes and loyalty programs to encourage retailers to stock up and actively promote your brand.
• Get full visibility into secondary sales trends by syncing with your distributor’s accounting system.