--- title: Top Distributor KPIs - Financial, Customer, Process & Growth Metrics Explained description: "Summary Some of the above KPIs can be combined – e.g. On time in full (OTIF). There are also other KPIs to consider that may be important for your business. Your KPIs will provide a balanced and comprehensive view of distributor performance, focusing on financial outcomes, customer satisfaction, operational efficiency, and long-term growth. This categorisation helps producers prioritize the areas that are most critical to their success. I’d love to hear your thoughts! How do you measure the performance of your distributors? Which KPIs do you use? What tips can you share?" image: https://supplychain.enchange.com/hubfs/mt-rtm-abc-KPIs-linkedin-1920%20x%201080.jpg --- [Login](https://www.enchange.com/login/) - - - - [![Enchange](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/logo.png)](https://www.enchange.com/) # Route to Market & Supply Chain Blog # Top Distributor KPIs - Financial, Customer, Process & Growth Metrics Explained Posted by Michael Thompson on Wed, Sep 11, 2024 - [Tweet](https://twitter.com/share) In my last article and post I covered the topic of distribution performance and how we establish the right processes and behaviours. I now want to address the topic of Key Performance Indicators (KPIs) or Metrics. Before I do this, a quick recap. In our journey, we have now selected our Distributor, by considering what an ideal [Model Distributor ](https://lnkd.in/ej4EJ7Q2)will look like. We have agreed the first [Joint Business Plan (JBP) and started Joint Action Planning (JAP)](https://lnkd.in/ecp4wgXp).  As I mentioned in an earlier Article and Post on Driving Performance Post-Distributor Selection, we have the tools in place to keep our Distributor honest. In overall terms, we have been using the three phases of Distributor Selection as follows: - The Assessment Phase - The Blueprint Phase - The Catalyst Phase These phases follow the process that we call the A-B-C of Route to Market. This model simplifies the world of RtM into a series of three steps that any RtM practitioner can execute. So, now let’s consider specific KPIs to measure our distributors’ performance? I will group these KPIs into four broad categories as follows: - Financial Measures - Customer Measures - Process Measures - Growth Measures I have included the formulae later on. ### 1. Financial These KPIs measure the financial contribution and profitability of the distributor to the producer. - **Sales Volume/Revenue Contribution. **This measures the total sales revenue generated by the distributor for the producer. It can be on an overall basis, by product category or key individual brands / SKUs - **Return on Investment (ROI) for the Supplier.       **This evaluates the profitability of the distributor from the producer's perspective. - **Distributor Gross Margin. **Assesses the profitability of sales through the distributor by measuring the margin after accounting for costs. - **Cost to Serve **Measures the total cost incurred by the distributor to serve a customer or a specific market. ### 2. Customer These KPIs focus on how effectively the distributor reaches and serves the end customers. - **Market Penetration Rate** Indicates how well the distributor is penetrating the target market. - **Numeric Distribution **Measures the percentage of potential retail outlets that carry the producer's products. - **Weighted Distribution** Reflects the quality of distribution by measuring the sales volume of outlets that carry the product relative to the total market. - **On-Time Delivery Rate **Assesses the distributor's reliability in delivering products on time to customers. ### 3. Process These KPIs measure the efficiency and effectiveness of the distributor's operations. - **Order Fill Rate **Measures the distributor's ability to fulfil orders completely and accurately. - **Stock Availability / In-Stock Rate. **Assesses the availability of the producer's products at the distributor level, ensuring consistent supply. - **Return Rate / Product Returns Ratio** Evaluates the efficiency and effectiveness of the distributor by measuring the rate of product returns. - **Distributor Compliance Rate **Measures how well the distributor adheres to the producer's policies, standards, and agreements. - **Promotional Execution Rate **Evaluates the distributor's ability to execute marketing and promotional activities as planned. ### 4. Growth Here we focus on longer term measures and the distributor's role in expanding the market and driving long-term growth for the producer’s products. - **Coverage **Measures the overall market reach by combining numeric and weighted distribution, providing a comprehensive view of distribution effectiveness. - **Market Penetration Rate **Indicates how well the distributor is expanding the producer's market presence. ### Formulae There are a variety of ways to measure the above KPIs. The following formulae will help. #### 1. Financial #### ![finance kpis](https://supplychain.enchange.com/hs-fs/hubfs/finance%20kpis.png?width=550&height=305&name=finance%20kpis.png) #### 2. Customer ![customer kpis](https://supplychain.enchange.com/hs-fs/hubfs/customer%20kpis.png?width=550&height=302&name=customer%20kpis.png) #### 3. Process ![process kpis](https://supplychain.enchange.com/hs-fs/hubfs/process%20kpis.png?width=550&height=380&name=process%20kpis.png) #### 4. Growth ![growths kpis](https://supplychain.enchange.com/hs-fs/hubfs/growths%20kpis.png?width=570&height=136&name=growths%20kpis.png) ### Summary Some of the above KPIs can be combined – e.g. On time in full (OTIF). There are also other KPIs to consider that may be important for your business. Your KPIs will provide a balanced and comprehensive view of distributor performance, focusing on financial outcomes, customer satisfaction, operational efficiency, and long-term growth. This categorisation helps producers prioritize the areas that are most critical to their success. ### We would love to hear your thoughts! Share your insights! How do you measure distributor performance? What KPIs and tips have worked best for you?   Tags: [Route to Market](https://supplychain.enchange.com/topic/route-to-market), [Michael Thompson](https://supplychain.enchange.com/topic/michael-thompson), [Distribution](https://supplychain.enchange.com/topic/distribution), [RtM Strategy](https://supplychain.enchange.com/topic/rtm-strategy), [The ABC of RtM](https://supplychain.enchange.com/topic/the-abc-of-rtm) ### Subscribe Here! ## Implementation Guide - 20 Steps to RtM Excellence [![cta-20-steps-implementation-guide-1](https://supplychain.enchange.com/hs-fs/hubfs/cta-20-steps-implementation-guide-1.png?width=336&name=cta-20-steps-implementation-guide-1.png)](https://supplychain.enchange.com/implementation-guide-to-20-steps-to-route-to-market-excellence) ## RtM Distributor Assessment Tool [![rtm-distributin-assessment-tool-enchange](https://supplychain.enchange.com/hs-fs/hubfs/rtm-distributin-assessment-tool-enchange.png?width=336&name=rtm-distributin-assessment-tool-enchange.png)](https://supplychain.enchange.com/analyse-the-performance-of-your-distributors---free-route-to-market-assessment-form) ## Distributor Assessment Guide [![distributor assessment guide-2](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/distributor%20assessment%20guide-2.webp)](https://supplychain.enchange.com/distributor-assessment-guide) ## 3rd Degree Partnership Guide [![3rd degree partnership download](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/3rd%20degree%20partnership%20download.webp)](https://supplychain.enchange.com/implementing-third-degree-partnerships-guide) ## Indirect Distribution: FMCG  Distributors vs. Wholesalers [![cta_ditributor-wholesale-download_sidebar](https://supplychain.enchange.com/hs-fs/hubfs/cta_ditributor-wholesale-download_sidebar.png?width=336&name=cta_ditributor-wholesale-download_sidebar.png)](https://supplychain.enchange.com/indirect-distribution-fmcg-distributors-vs.-wholesalers) ## 8 Steps to Drive Distributor Excellence ![cta-8-steps-distributor-excellence](https://supplychain.enchange.com/hs-fs/hubfs/cta-8-steps-distributor-excellence.png?width=336&name=cta-8-steps-distributor-excellence.png)   [![awrad](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/Supply-Chain-transparent_216px.png)](http://blog.feedspot.com/supply_chain_blogs/) ### Connect with Enchange Online ### Posts by Topics - 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