Hello,
We have seen this many times most of the startups or launching companies tend to set up their company sales in a new market having good potential, they tend to look for a rented office or godown and set up their own office with their own staff and some fixed assets managing all the expenses and day to day Invoicing , Packaging of goods , Dispatch of Goods. Whereas, we believe that the company's focus should be only on sales and growth of the Company rather than looking at all the matters which can be easily managed by just appointing a CFA. In fact, appointing a CFA will cost lesser in expenses to the company!
Okay as we have already understood that how the focus and efforts can be totally invested in sales instead of all these things ! Now how appointing a CFA is even cheaper than appointing your own team & Godown / Office Space to Launch a company's product in a new State ( Delhi ). Here we are talking about Delhi !
If a company owns / rent their own office / godown they will be paying off a huge amount !
Then, they will appoint own staff of minimum 4 person, ( for accounts, for godown, for dispatch , and a manager to handle all the task ) and the cost of recruitment !
Then the company will be owning / renting off all the transportation alone for each & every supply.
Then, company needs to get & maintain Drug Licence for the premises.
Paying off all the Water & Electricity charges.
Property taxes and other government fees all just for themselves !
Even after paying all these, there are still so many expenses left, like getting Computer Systems, Printers, Air conditioners, other Electrical Appliances & Furniture.
Even after investing so much, all the headaches remain in the court of the Company's Distribution Management !
Where as if The Company decides to appoint a CFA / C&F agent. The company has to pay a nominal service amount and all the above things will be handled and maintained by the appointed CFA. No Distribution related tentions are left for that State.
The most important thing is that company doesn't need to invest even a single penny in the fixed assets to start in a new state. All the Assets are owned and maintained by CFA only. The company doesn't have any liability to pay any wear and tear of the assets.
Now, how does a CFA manages everything at a minimum cost?
The reason is they are already handling and paying off all the charges for maybe some other companies like
They are already having owned godown facilities. So they don't need to invest separately for an additional company.
They are already having a trained management team & staff for all the steps of Distribution to ensure timely despatch of goods. So they don't need to add any minimum staff for a new company.
They are already paying transportation costs for delivering goods to different areas daily. So it just adds a very little amount to deliver goods of an additional company.
They are already paying all the Water & Electricity Bills along with all the property taxes and other government duties. so it doesn't add even a penny to their pocket for adding an additional company.
They are already having all the assets installed on their premises so they don't need to invest extra to start the distribution of an additional company!
So that's why they manage things better even with lower expenses and investment than a company would do to set up their own separate premises in any State.
So the company should always opt for appointing a CFA for each State for the easy, better, and hassle-free distribution working of the Company. As they already have a trained staff doing the same kind of working which your company is looking for and they have procedures for smooth daily working in which a company can add up their suggestions too. A CFA always works for a Company as per the policy and guidance of the company as discussed over a mutual agreement!