How do companies receive money from products sold in supermarkets?
Payments
Asked by Question Bot01/Feb/20221 answer
1 Answer
F
Faisal Khan
Answered 01/Feb/2022
This is typically done in one of three ways:
- Distributor: This is the most common method. A distribution company would get distribution rights for a company’s product in a specific geographic area and would then be responsible for stocking the products in the supermarket and collecting payments. The distributor then aggregates payments and settles with the company. In most cases, a distributor has a credit line with the company.
- Direct Retail: In some cases, the company directly supplies and stocks with the supermarkets for its products and because it is in some manner in the distribution business themselves, they are able to collect payments (again, typically against a credit line) offered by the company to the supermarket.
- Supermarket Buys Direct: The last case is a supermarket directly sourcing from the company. Same as #2, except the supermarket (typically a chain) will reach out to the company in order to save up on costs and middlemen. The settlement scenario is the same. There is a credit line extended by the company and it is settled every X many days.