Notes for owners · Channel and customer growth
How to measure dealer and distributor performance
Billing tells you what a dealer bought, not what they sold, so a scorecard on secondary sales, coverage and payment days shows who works the market.
The GullySales team · Updated 15 Sept 2026 · 7 min read
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Billing tells you what a dealer bought from you. It says nothing about what they sold, which items they sold, how many counters they reached, or whether they paid on time. A dealer who buys ₹40 lakh a quarter while sitting on four months of stock is a worse partner. One who buys ₹25 lakh and turns it every six weeks is worth more. Measure the market work, not the invoice. Then you see which territories need help, not which dealers need shouting at.
What should actually be on the scorecard?
| Measure | Definition | Where the data comes from | What it tells you |
|---|---|---|---|
| Primary sales | What the dealer bills from you | Your own invoicing | Nothing about the market on its own |
| Secondary sales | What the dealer sells onward | Dealer statement, stock movement, or a register photograph | Whether the product is moving or sitting |
| Stock cover | Closing stock divided by average monthly sell-out | Monthly stock statement | Dumping, or a stock-out risk |
| Range sold | Number of items billed against the range agreed | Your invoicing | Whether they sell the line or two items from it |
| Outlet coverage | Retailers billed in the period against the universe | Dealer statement or field verification | How much of the territory is actually reached |
| Payment days | Average days from invoice to realisation | Your accounts | Working capital cost hiding inside the relationship |
| Overdue and returns | Value beyond agreed days, and returns as a percentage | Your accounts | Real profitability of this partner |
| Growth against potential | Growth compared to the estimated territory potential | Territory brief plus billing | Whether a flat dealer is in a flat market or asleep |
Six of these are available from your own systems today. Only secondary sales and coverage need the dealer's cooperation, and those two are worth the effort of getting.
Why secondary sales matters more than anything else
Without sell-out data you are guessing. A quarter of strong billing may mean the market is buying. It may also mean a scheme pushed stock into a godown, where it will sit until it is discounted into someone else's territory.
Getting the data is a negotiation, not a request. Three things make it work.
Ask from day one with every new partner, as part of the appointment terms. Asking an existing dealer of eight years for the first time is far harder.
Accept an imperfect format. A stock statement, a photograph of the register, or a monthly WhatsApp summary is far better than waiting a year for a proper report.
Attach something to it. Scheme eligibility, territory protection, or a share of your demand generation enquiries. A partner who gets something for reporting will report.
Then use it visibly. If a dealer shares data and nothing changes, they stop. If you use it to send them enquiries, fix a stock-out, or exclude them from a scheme they could not have won anyway, they keep going.
How to read stock cover and range together
These two numbers, read side by side, diagnose most channel problems.
High stock cover with narrow range means a scheme pushed volume of the fast movers. The dealer is loaded, they will discount, and your next quarter will be weak.
Low stock cover with narrow range means genuine demand on two items and no effort on the rest. That is a range problem, solved by training and a range-linked scheme, not by pressure on volume.
Low stock cover with wide range is a good partner, and the risk is stock-outs costing you sales. Increase their credit limit or their stocking norm.
High stock cover with wide range usually means the territory is weaker than you assumed, or the price is wrong. Go and look before you blame the dealer.
Setting up the review, which is where measurement earns its money
A scorecard that arrives by email changes nothing. The review does.
Monthly, a thirty-minute call with each significant partner on six numbers, with the previous month next to it. Quarterly, a visit, with the godown seen and two or three retail counters visited in their market.
Bring the scorecard to the meeting rather than a target. The conversation changes from "why did you not buy more" to "your coverage is 62 counters out of roughly 190". Then ask what it would take to reach 100, and what they need from you.
And record the outcome, because a partner review with no written action point is a chat.
A worked example
For example, imagine a Bengaluru manufacturer of industrial fasteners with 28 distributors across Karnataka, Tamil Nadu and Telangana. The details and figures below are illustrative. Reporting was a monthly billing sheet ranked highest to lowest, and the top five were praised every quarter.
The scorecard was rebuilt with six measures: secondary sales, stock cover in weeks, items billed out of eighteen, counters billed, payment days, and growth against territory potential.
The second-largest distributor by billing turned out to hold eleven weeks of stock, sell six of eighteen items, and pay at 68 days against an agreed 30. For example, at a ₹35 lakh quarterly billing and an illustrative cost of funds, those extra 38 days were quietly costing more than the distributor's scheme payout was worth. The figures are illustrative. The finding was not: this was the most expensive partner in the network, and had been treated as the best.
Meanwhile a smaller distributor in Hubballi billed ₹14 lakh, held four weeks of stock, sold fourteen items, covered 80 counters and paid at 31 days. This was the partner to invest in, and they had been getting no support because they ranked ninth on the billing list.
The territory plan changed on the back of one sheet.
What to do next
Build the scorecard for your top ten partners using only the data already in your own accounting and invoicing: range billed, payment days, overdue, growth. That alone will reorder your view of who your good dealers are. Then start asking for a monthly stock statement from every new partner you appoint.
