Before applying for a distributorship, know exactly how much capital you need. This calculator covers godown rent, inventory, credit cycle buffer, and operational expenses — all key components that companies verify before appointing you.
Typical Capital Requirements by Distribution Category
Category
Min. Capital (₹)
Credit Cycle
Avg. Margin
FMCG Products
₹3L – ₹8L
15 – 30 days
8 – 15%
Pharmaceuticals
₹5L – ₹15L
30 – 45 days
15 – 22%
Electrical & Electronics
₹4L – ₹12L
30 – 60 days
18 – 25%
Construction Materials
₹8L – ₹25L
30 – 45 days
10 – 14%
Cosmetics & Personal Care
₹2L – ₹8L
15 – 30 days
20 – 30%
Agri / Food Products
₹3L – ₹10L
7 – 21 days
6 – 12%
Distributor Capital FAQs
Working capital in distribution refers to the money needed to run day-to-day operations — primarily (1) stocking inventory, (2) bridging the gap between purchasing goods and collecting payment from your retailers (credit cycle), and (3) covering rent and operating expenses during this period.
For a small to mid-size FMCG distributorship in India, plan for ₹3L–₹8L in working capital. This covers: godown deposit (₹50K–₹1L), monthly inventory (₹1.5L–₹4L), vehicles/delivery (optional), and 30-day operating buffer. Larger brands may require ₹10L+ for exclusive territory rights.
Standard requirements: GST registration certificate, PAN card, Aadhaar card, bank statement (6 months), shop/godown proof (lease or ownership), trade licence, and sometimes a net-worth certificate. For pharma, a Drug Licence (Form 20/21) is mandatory.
