Two distributors with the same product range and cost price can still end up with completely different outcomes after three years. The difference lies not in the product itself, but in the philosophy behind the Pet Food distribution model: one sees distributors as a means to push products to meet monthly targets, while the other views distributors as a sales force that needs to be patiently cultivated over many years.
Two philosophies in the Pet Food distribution model: forcing sales or nurturing distributors.
Every distribution system has to choose one of two approaches, though it’s rarely stated directly. The first is supply pressure: the supplier sets monthly sales targets, uses bonuses and pressure to get dealers to take on larger orders than they can handle, and records revenue as soon as the goods leave their warehouse. The second is dealer nurturing: the supplier considers true sales only counted when the goods pass through the counter and reach the pet owner, so all resources are focused on making each point of sale sell more than the previous period. These two approaches result in two contrasting sets of behaviors in almost every decision, from discounts and deliveries to how slow-moving inventory is handled. For a pet shop owner choosing a long-term supplier, identifying which approach their supplier is taking is far more important than comparing a few percentage discounts on the initial price quote.
The vicious cycle of inflated sales figures begins with the forced acceptance of a shipment.
The mechanism for creating artificial sales figures is easy to understand but very difficult to stop once started. A distributor accepts a shipment exceeding their sales capacity to secure a higher discount, immediately tying up working capital in inventory. The goods don’t sell quickly enough, time passes, and a portion of the shipment approaches its expiration date. At that point, the distributor has only one option: drastically lower the price to recoup their investment. This discounted price then appears publicly online, becoming the new benchmark price that all other retailers compare to. The result is that the supplier reports a good month, but at the cost of disrupting the entire system’s price benchmark and eroding the trust of reputable distributors. Distributors should set a firm ceiling for themselves: never accept a shipment with an expected selling time longer than half of its remaining shelf life, regardless of how attractive the offered discount is.
What does “managing a network of distributors” mean when translated into daily work?
Nurturing distributors isn’t just a nice slogan; it’s a completely different way of allocating resources. The clearest indicator is that the source spends most of its time on increasing sales speed rather than increasing inventory. The regional manager visits the store to check on product availability, asks staff about customer issues, adjusts shelving, and works with the shop owner to create a product catalog for the next quarter based on sales data from that particular store. The source also proactively limits the number of stores within a radius to protect the assigned sales territory, because a distributor placed next to two other distributors selling the same product will only be able to compete on price. This is the true essence of partnering with distributors, and it’s far more expensive than simply sending price lists and waiting for orders.
Tiered discounts should measure sales capacity, not inventory levels.
The tiered discount policy is where the philosophy is most clearly revealed, as it determines what is rewarded. If the tier is tied to the value of a single order, the system is paying for hoarding and creating the aforementioned inventory spiral. If the tier is tied to cumulative quarterly sales, the consistency of reorder frequency, the breadth of the product range maintained by the point of sale, and adherence to recommended retail prices, the system is paying for actual sales performance. The same percentage figure, but two different calculation methods, will result in two completely different types of dealers after a few years. Pet shop owners should, when negotiating, request that all incentives be converted to a single metric: profit margin per month of working capital, instead of focusing on the maximum discount percentage, which they will almost never reach without accepting the risk of hoarding inventory.
Point-of-sale coverage is a strategic asset of the Pet Food distribution model.
According to Mordor Intelligence, specialized retail outlets, including pet shops and veterinary clinics, account for approximately 72.44% of pet food sales in Vietnam. This figure indicates that whoever controls the network of specialized retail outlets controls a large portion of the product distribution, and that’s why outlet coverage should be considered a strategic asset, not just a statistical line in a report. This asset has unique characteristics: it takes years to build, can be depleted in a few careless quarters, and cannot be bought back with advertising money. A system of two hundred loyal outlets, each placing regular orders, is worth far more than five hundred outlets that only order once and then stop. For distributors, this implies that you are not just a wholesale customer but an integral part of the supplier’s assets, and you have every right to demand to be treated accordingly.
Four indicators show whether the dealership network is strong or weak.
Total sales is the easiest indicator to see, but also the easiest to mislead, because it doesn’t distinguish between goods already sold and new goods simply being moved from one warehouse to another. Four indicators are much more truthful. First is the reorder rate of dealers during the period, which shows how many points of sale actually sold out their old stock. Second is the inventory turnover at the dealer, reflecting whether the partner’s capital is circulating quickly or sitting idle. Third is the annual dealer turnover rate; an increase in this indicator often signals policy problems before revenue has a chance to decline. Fourth is the stability of retail prices in the market, a direct measure of system discipline. Dealers should directly ask their suppliers for these four figures; a partner building a sustainable dealer network will have the answer readily available, while a partner focused on sales will evade the question.
Three levels of relationships and the conditions for advancing to each level.
The relationship between the supplier and the point of sale typically falls into one of three levels. The lowest level is outright purchase: both parties meet at the point of sale, price dictates everything, and neither party has any obligations after the goods are delivered. The middle level is partnership: there are credit limits, policies for exchanging defective or near-expired goods, sales support, and a commitment to a specific sales territory. The highest level is strategic partnership: both parties share sales data, jointly plan product categories and annual import plans, the distributor receives priority when supply is tight, and is involved in the selection of new product lines. The condition for moving up is not the order size but the level of transparency: the distributor shares accurate sales data and maintains the correct selling price, the supplier publicly discloses its policies, and does not compete directly with the distributor. Lacking either of these two aspects, the relationship remains at the lower level.
Why is the dealer network strategy suitable for a market that has only been exploited for 5%?
According to data released by the Ministry of Agriculture and Rural Development in March 2025, only about 5% of dogs and cats in Vietnam, out of a total pet population of approximately 27 million, are fed specialized pet food. This characteristic completely changes the distribution landscape. In a saturated market, growth only comes from gaining market share, so forcing sales to secure shelf space before competitors has its own logic. In a market where 95% of demand remains untapped, the winner is the one who can convert more new pet owners, and that conversion only happens at the counter, through an employee who can explain why they should switch from leftover food to specialized pet food. Distributors cannot do this for them; they can only help their dealers do it better. That’s why developing the distribution channel in the pet food industry at this stage essentially means investing in the consulting capabilities of each point of sale, and this is a long-term strategy that benefits both sides.
Mistakes made by distributors and signals that dealers need to read.
The most common mistake is measuring efficiency by inventory levels instead of sales at the counter, leading to a series of skewed decisions: opening overlapping sales points to inflate sales figures, running clearance sales at the end of the quarter, making verbal promises about sales zones and then breaking commitments when larger wholesale customers arrive. The second mistake is treating distributors based on their current size instead of their potential, leaving smaller but hardworking distributors neglected. For pet shop owners, there are several signals that can be read quite quickly. A supplier currently supplying you will ask which items are slow and suggest restructuring, will refuse to sell you batches they know you can’t sell in time, and will intervene when a distributor undercuts prices. A supplier currently using your services will only appear at the end of the month, always encourage you to order more, and remain silent when you report being overcharged by a neighboring distributor.
Petkin examines the Pet Food distribution model and dealer network strategy.
Petkin is an importer and distributor of pet food, not a direct retailer. Therefore, our profit is closely tied to our dealers’ sales success, not the quantity they receive. In a market where specialized channels still account for over 72% of revenue and 95% of pets don’t use specialized pet food, we believe the most sustainable growth strategy is to strengthen each individual sales point before expanding coverage, rather than simply supplying goods to the distribution system to improve quarterly results. This means our discount policy is linked to actual sales performance, retail prices are protected, near-expired stock is handled collectively, and delivered sales areas are respected. If you are a pet shop owner or dealer looking for a long-term supplier, please evaluate us using the four system health indicators mentioned above.