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FIP 106: Last mile distribution 1/3 – How to pivot a distribution model from door-to-door to retail, with Philip Wilson of EcoFiltro

This is part one of a 3-part mini-series on last mile distribution. This series is a collaboration between the Finding Impact Podcast and the Global Distributors Collective (GDC). The GDC is a collective of last mile distributors around the world, with over 140 members in over 40 countries, who cumulatively have sold more than 8 million life-changing products to last mile households.

The GDC is dedicated to supporting and representing last mile distribution companies to help them reach underserved customers with life-changing products like solar lights, clean cookstoves, water filters and nutrition products. The purpose of the GDC is to make last mile distribution the first priority so that life-changing products can be made affordable and available to all.

This episode with EcoFiltro, a distributor of water filters in Guatemala, focuses on how distributors can improve their sales efficiency by pivoting their distribution model.

On this episode you’ll learn:

  • EcoFiltro started with a micro-consignment model in which they’d give hundreds of community entrepreneurs across Guatemala five filters to sell in their community, and they’d earn 10% on each sale.
  • The model proved unsustainable due to the cost of pre-financing the filters which would often be paid back over two years, the cost of collecting the money from customers, and the low sales volumes achieved by community entrepreneurs.
  • They tried a number of different things to try and improve sales, such as training, offering incentives and encouraging referrals, but all their efforts only yielded a few extra filters sold per month.
  • They spent 18 months designing a new model, which involved speaking to retailers all across the country, and ultimately selected a few to be key distributors of the filter.
  • Retailers were happy to sell it because the filter had a strong brand, since it had been sold for a long time in big shops in urban areas and received good PR from a school donation programme.
  • Retailers were required to invest in 20 filters at a time for a $500 investment, so were motivated to recoup their investment.
  • The school donation programme, where filters were donated to local schools, was channelled through the local retailers, so they received the attention and drove customers to buy from them locally.
  • They now have around 100 local distributors and they’re targeting 270 by June 1st, 2019, which will be about 20-25 distributors per sales agent.
  • They’ve strengthened the brand by investing in their sales and marketing collateral, so all retailers are giving the same message to customers. This enables them to more easily measure sales of each distributor every month

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