Think of a company whose 14 brands figure among India’s top 100 and most trusted brands; over 5 lakh outlets across India at glitzy shopping malls to the remotest village corner, stock and sell the company’s brands. Yes, that's Hindustan Unilever (HUL), the most prominent Indian FMCG company.
To know about the Hindustan Unilever Distributorship Cost in India, an overview of the distributorship application procedures, and the background of this consumer goods behemoth, continue reading.
The Beginning of HUL
India is among the 190 countries globally where Unilever products are sold. Historically, the company entered India via the export route in 1888. The first shipment of Sunlight soap bars landed at the Calcutta port in 1888. LEVER Brothers England dispatched the consignment. Soon after, Lifebuoy followed in 1895, marking the beginning of branded FMCG retail.
The first Indian subsidiary (Lever Brothers) came up in 1931(Hindustan Manufacturing Company), and Lever Brothers India Ltd was incorporated in 1933. All the branded items of lever Brothers met with immediate customer acceptance.
Liberalisation (of the Indian economy) saw the removal of several regulatory measures enabling the company to embark on massive growth. In addition, alliances, acquisitions and mergers ensured fast expansion. In 2007, the management incorporated the present form of the company.
Today the company has 29 factories producing over 50 + brands, impacting the everyday life of millions across India. The three principal business groups- beauty and Personal Care Products, Home Care, Food and Refreshments generated an annual turnover of Rs.45311 crores (2020-21). HUL follows a focussed sustainability agenda and constantly aims at reducing environmental footprint and creating positive social impact.
HUL: Appointment of New Distributors
HUL constantly monitors the demand and supply scenario for its products at all places of operation. Once they (the company) identify a potential gap in the distribution network, the process of a new distributorship appointment is triggered.
Usually, newspaper ads are released by the company inviting applications for that particular city or location. Simultaneously, a review is done of the direct applications for distributorship received for that location (if any).
The process of checking, short-listing and final appointment of a distributor happens in three phases:
- A detailed background check of the applicant to verify the eligibility as per the company's requirements. Then, several teams evaluate the infrastructure and other facilities as per the operating standards of the company.
- A thorough assessment of the financial capabilities is carried out by a dedicated finance team and the legal aspects of the distributorship arrangements by the legal team. Finally, the shortlisted applicants go to the next round for discussions.
- Several rounds of face to face meetings happen with senior company officials.
- The process ends with the execution of the distributorship agreement. The operational terms and other issues including the Hindustan Unilever Distributorship Cost are finalised at this stage.
The company presently does not have an online application or verification process for appointing distributors.
- The selected distributor is then inducted within the company system through a unique code that enables operational access. The new distributor is now linked to the IT- infrastructure of HUL.
There are no fees, charges, or deposits to be paid as part of Hindustan Unilever Distributorship Cost. All the applicable terms and conditions are explicitly defined in the agreement with the company.
A word of caution: A distributorship of HUL is a lucrative business opportunity. Unfortunately, several fake agents/consultants promise help and assistance and fake distributorship in exchange for money. The HUL website has specific information on such malpractices. They have also advised applicants to check whether communications are originating from company sources.
Who can be an HUL Distributor in India?
HUL does not publish the details of eligibility parameters for becoming a distributor of the company. However, market sources indicate the following criteria for distributorship. Specific details are only available in real-time when you clear the initial round of selection.
Eligibility Criteria For Hindustan Unilever Distributorship
- Age: above 21 years
- Education: Preferably graduates but 10th Pass (for rural area) and 12th Pass for urban locations are acceptable.
- Applicants must be involved in the FMCG business.
- Office space: Minimum 150 -250 square feet
- Storage space: At least 1200 -1600 square feet, depending on the area and planned product mix. The place must have clear access from the main road and space for loading/unloading of stocks). The warehouse space must take care of the expected growth in the business (and stocks) for at least the next five years.
- Delivery vehicles (pick-up trucks or scooter vans): At least two in number
- Operational Staff: Necessary persons to manage an office, warehouse and most importantly, the sales team.
- Computer/system setup (to be upgraded to meet company requirements if necessary)
- CCTV network for warehouse (a critical requirement)
- Total power back up( to cover the entire working hours)
- Identity-related: Aadhar, PAN, Voter card
- Business-related: Bank account details, Copies of past 2 / 3 years income tax returns; copy of trade license
- Property related: Ownership/lease/rent papers for the proposed office and warehouse.
4. Investment and Returns
The minimum Hindustan Unilever Distributorship Cost for urban areas is Rs.50 Lakhs and Rs.25 Lakhs for Rural areas.
The Hindustan Unilever Distributorship Cost mentioned above is a ballpark figure and will vary with location, infrastructure created, product mix and inventory levels.
As per the 2011 census, an urban area is defined as a place with a population of more than 5000. Furthermore, the place should have a density (of the population) of 400 persons per square kilometre or higher. Additionally, more than 75% of the adult male population should be employed in non-agricultural activities.
- The average distributor margin is 5%; it varies between 3 to 8 % on different products.
- The average monthly sales value of a distributor is Rs 25 Lakhs plus.
Summary of Distributorship Eligibility
Benefits of an HUL Distributorship
- An array of India's best-known consumer brands
- Assured sales help the faster recovery of the Hindustan Unilever Distributorship Cost
- The company provides real-time support in IT related issues
- Regular operational help and business guidance
- Training of staff
- Promotional support both nationally, regionally and locally
How to Apply
- Respond to Distributorship invitation in your preferred area by the company (happens once in a while).
- Contact the concerned HUL Office with your business plan and proposed investments towards the Hindustan Unilever Distribution Cost
- Enquiry through the online contact form.
HUL Contact Details
A company like HUL with an array of mega-brands is indeed a sought after business option. Business people, particularly in FMCG, wait for an opportunity even without considering the Hindustan Unilever Distributorship Cost. Besides business, there is the additional attraction of association with a company that cares for the environment and society.
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Q. Is there any security deposits as part of the Hindustan Unilever Distribution Cost?
Ans. Most companies have a policy of deposit from their trade partners. HUL also has a similar practice, but you will get to know only when you are selected as a distributor.
Q. What are the chances that one may succeed in the HUL distributorship business?
Ans. HUL products are well accepted and preferred by consumers. There is minimal possibility of failure as a distributor of HUL unless your business is mismanaged. The average returns offered by HUL is low (compared to many other FMCG companies) because the items sell fast.
Q. Can the Hindustan Unilever Distributorship Cost for rural areas go up?
Ans. Investment is location, opportunity and time-specific. It may increase with requirements.
Q. How to apply for HUL distributorship in my town?
Ans. Steps to apply for HUL distributorship in my town are:
1. Apply against a specific requirement of the company.
2. Contact the company for a discussion for future opportunities (Details in the article)
Q. Can one deal in other products in the same firm of HUL distributor?
Ans. No-the company agreement is specific for HUL items. Therefore, you may deal with a different business entity.