Notes for owners · Channel and customer growth
Channel partner recruitment checklist for manufacturers
Appointing a dealer is a hiring decision with a godown attached. This checklist covers territory, partner profile, commercials and the first order.
The GullySales team · Updated 15 Sept 2026 · 6 min read
On this page
Appointing a dealer is a hiring decision with a godown attached, and it costs as much to reverse. Work through five stages in order: define the territory, write down the partner you want, source candidates properly. Then agree commercials and documentation, and onboard so the first order is followed by a second. Most manufacturers start at stage three. They sign whoever shows enthusiasm, then spend two years explaining why the territory is not moving.
Stage 1: define the territory before you look for anyone
A territory is not a state. Karnataka is not a territory, it is eight or nine of them. Define it by how your product is actually bought: the cluster of counters, the industrial belt, the set of districts one sales person can cover in a fortnight.
For each territory write down three things. The potential, meaning a rough estimate of what the category sells there annually. The existing coverage, meaning who your competitors sell through today. And the service requirement, meaning whether the product needs stock nearby, installation, or after-sales support, because that decides whether you need a stockist or an agent.
Do this on one page per territory. It becomes the brief for recruitment, the basis of the target, and the document that stops you appointing two dealers in one market.
Stage 2: write down the partner you actually want
- Already sells to your buyer, ideally complementary and not competing lines
- Has a working sales team, not just an owner and an accountant
- Has the godown space and handling your product needs
- Has a clean payment record, checkable through transporters and other principals
- Has credit standing with a bank, which matters more than declared turnover
- Carries a GST registration and files returns on time
- Has an owner or a family member who will actually push the line
- Is willing to stock a minimum range, not just the fastest moving item
- Is prepared to have his sales staff trained by you
- Will share secondary sales data, which is the real test of intent
That last point sorts serious partners from order-takers. A firm that refuses to tell you what it sold and to whom will never let you build the territory.
Stage 3: where to source candidates
Six sources, in order of how well they usually work for Indian manufacturers.
Competitor dealers who are unhappy. The single best source, found by walking the market and asking retailers who they buy from and what annoys them. An unhappy dealer with an existing counter base can move volume in one quarter.
Retail counter visits in the trade market. Walk the market, ask which distributors service it, and note the two names everyone mentions.
Trade exhibitions in your category. You meet the owner rather than a sales person, and a two-day event in a city can produce more conversations than three months of calling.
Industry association and chamber directories, which are cheap and reasonably current.
Transporters and clearing agents, who know exactly which firms in a market pay on time and which do not. An hour with a transporter is worth a week of research.
Enquiries from IndiaMART, TradeIndia and search advertising on the phrase distributorship required, which bring volume of varying quality and need hard qualification.
Stage 4: the commercial sheet and the paperwork
| Item | What to settle in writing | Common mistake |
|---|---|---|
| Territory | Districts or pin codes, listed | Saying south Karnataka and arguing later |
| Margin | Percentage on which price, and who bears freight | Quoting a margin, forgetting the freight and GST treatment |
| Credit | Days, limit, and the security against it | Verbal credit that becomes a permanent overdue |
| Targets | Quarterly value and range, not annual only | An annual target reviewed in month eleven |
| Minimum stock | Range and quantity to be held | Dealer stocks one fast item and orders the rest to order |
| Scheme entitlement | Which schemes apply and how claims are settled | Claims settled by argument, partner stops trusting you |
| Exclusivity | Against volume, for a defined period | Open-ended exclusivity given away at signing |
| Exit | Notice period, stock return terms, deposit refund | No exit clause, so ending it means a dispute |
| Documents | GST certificate, PAN, shop or trade licence, bank reference, dealership agreement | Signing on a quotation and an email |
Put all of it in one dealership agreement. Not to litigate later, but because the act of writing it down surfaces the disagreements while they are still cheap.
Stage 5: the first ninety days decide everything
Appointment is not the finish. Do five things before the second order.
Train the partner's sales staff on the product, the objections and the pricing, at his premises, with your technical person present.
Give him a working kit: price list, catalogue, samples, a small display, and the warranty and installation terms in writing.
Generate some demand in his territory yourself. Search visibility for the product plus the town, a listing on IndiaMART for his area, and a few enquiries passed to him build belief faster than any speech about partnership.
Set the review rhythm. A monthly call on the numbers and a quarterly visit, from the first month rather than from the first problem.
Ask for secondary sales from the first month, in whatever format he can manage, even a WhatsApp photograph of a register. Asking late is asking never.
A worked example
For example, imagine a Peenya-based manufacturer of industrial valves in Bengaluru, selling directly to plants in Karnataka and wanting to open Tamil Nadu. The details and figures below are illustrative.
The territory is not Tamil Nadu. It is Coimbatore and the surrounding industrial belt first. That is where the pump and textile machinery plants are, and the buyer is a purchase manager who wants stock nearby.
The partner profile says: already sells pumps, bearings or pipe fittings to the same plants, has two field sales people, and holds stock. He must also be willing to send his people for a two-day training. Sourcing starts with visits to twenty user plants, asking who supplies their valves today and who they wish supplied them.
For example, the commercial sheet offers 18 percent on the list price and 30 days credit against a ₹2 lakh refundable deposit. It also sets a quarterly target of ₹15 lakh and a minimum stock of eight SKUs. The figures are illustrative. What matters is that all four are on one page before anyone signs.
What to do next
Take your two weakest territories and write the one-page territory brief for each: potential, current coverage, service requirement. Then write the partner profile. You will usually find that your existing partner there does not match the profile you just described, and that is the real finding.
If you want a second opinion on your route to market before you appoint anyone, tell us what you need.
