Retailers are smart buyers, and their final purchase from distributors or Cash & Carry [C&C] chains depends on the best deal being offered. Distributors usually provide goods to retailers on credit for 10-15 days. Retailers sell these goods to customers in cash and use this cash to purchase goods from C&C chains, which offer a little more discount than distributors so retailers don’t mind paying them on the
spot (C&C chains don’t offer credit).
This practice by retailers has led to distributors’ business volume reducing to an extent. More importantly, with additional bargaining power, retailer are demanding more credit terms from distributors, negatively affecting their ROIs.
