The first time I spoke to a mentor on the stint, someone senior enough that I’d only ever exchanged a handful of words with him, I told him I was looking forward to getting my hands dirty and leaving behind some real contribution to the sales system. He smiled and told me I had to understand it before I could change it. Then he gave me an assignment that didn’t look like one. No deck, no deliverable date, just a question: go find out why RS owners keep running their points when the return on investment doesn’t justify it.
It sounded abstract until I actually sat down with the ROI math. An RS owner ties up real money, in stock, credit extended to retailers and working capital. On paper, the return is around 18%, comfortably above a fixed deposit. But we all know, in practice it runs much lower, and once you count the stock to reconcile, the trucks to manage and the workers to pay- the headache is hard to justify. So why do it?
I went looking at RS points across the territory. And the answer wasn’t one thing. It was a different reason every time, and most of them weren’t on any spreadsheet.
Some of it was in the accounting. A few RS owners carried cost lines that reflected how the family business had always run- rent and wage arrangements that made sense to the people inside them but didn’t look like a clean market rate on paper. Some of it was simpler than that: bad debt sitting in the market that everyone privately knew would never be recovered, but that stayed on the books as “outstanding” rather than written off, because writing it off meant admitting the loss out loud. It showed up as a business that looked structurally unprofitable on paper because the “loss” was partly legacy cost and partly money sitting frozen, dressed up as something recoverable.
Some of it was shared overhead. A few RS points also handled non-HUL brands (we were supposed to distribute them in past years) out of the same godown, with the same trucks and MEs. The shared costs sat on the HUL books while the other business’s revenue sat outside them, so on paper the HUL side looked like it was bleeding. In reality, it was carrying weight that belonged to a business next door.
And then there were the ones where the numbers really were as bad as they looked, and the owner kept going anyway. One RS had been run by the same family for three generations. The current owner told me, almost dismissively, that of course it didn’t make sense on a spreadsheet. His father ran it, his grandfather started it, and closing it wasn’t really a financial decision he was free to make. And more than once I ran into something that wasn’t financial at all: having an HUL RS point was simply a source of prestige. Distributors were pillars of the community- with extremely high socio-political status. Families wanted their daughters married into a household that held one. Nobody was going to give that up over an ROI sheet.
As a student of sociology, it was fascinating to see “social capital” in real life: standing, reputation and relationships as a form of real wealth that never shows up in an account. These owners weren’t being irrational. They were being paid in a currency our ROI sheets don’t measure.
I went in expecting to find inefficiency I could fix with a recommendation. I came out with something closer to a map of why people actually keep businesses alive: obligation, legacy, community standing, prestige, family arrangements nobody would ever put in a boardroom deck, sitting right underneath a number that told a completely different, much simpler story.
He was right. I understood it. I just came out the other side realizing there were depths in there I was never going to change, only witness.
