Do you know the name of Dmart Company? If you don’t know that, let me tell you that the name of Dmart is Avenue Supermarts Limited.
Dmart was established in 2002, and now it has more than 200 stores in 72 cities in 11 states, and in this article, you are going to know what is Dmart Franchise Costs, and how to get Dmart franchise in India.
Dmart is such a business model that is profitable everywhere in India, because any business, no matter how many franchises it has, but every franchise of that business is generating only profit, such a business is the only Dmart in India.
Mr. Radhakishn Damani founded the Dmart in 2002 in Powai, Central Mumbai, and to date, Dmart has more than 200 stores in India, and each Dmart store is generating profit only.
The company name of Dmart is Avenue Supermarts limited which is doing business under the name of Dmart.
The headquarter of Dmart is situated in Mumbai, and according to data, there are more than 7,700 permanent employees and more than 33,500 employees are on a contractual basis.
Dmart got listed in NSE and BSE in 2017 and launched its IPO, and after getting listed in the stock market, its market value of 2017 was ₹39,988 crore.
Dmart is the supermarket that has beat its many competitors like reliance, big bazaar, spencers by following its amazing business model.
If you would not know then let me tell you that the Owner of the Dmart Business Model Mr. Radhakishn Damani is the second richest person in India.
Dmart Business Model
Dmart business model is really amazing and that is the only reason why Dmart has come late and given a strong competition to Spencers, reliance, big bazaar, and beat them.
Dmart works on a cost-saving method, focusing on the price orientation for the customers, i.e. it always gives the products at highly discounted prices.
Do you know in spite of being an MRP of any product at Rs. 100, why and how Dmart can offer you that product at Rs. 88, is there any specific strategy behind it?
Yes, it is, and that amazing revenue model of Dmart is going to be explored now!
Dmart imports the selling products from the manufacturer directly instead of wholesalers or distributors, so that it can save the purchasing cost.
Here, Dmart charges huge fees to the manufacturer for listing his products in the Dmart store, and the manufacturer can not refuse to pay it, because Dmart is spread all over India, and his products will be listed in each store of Dmart in India.
And this is the prime key feature of Dmart because it is giving a supreme platform to manufacturers to grow their sales.
Now, you might understand why Dmart can sell the products at highly discounted prices to their customers.
Dmart gives a discount from the fees which are collected from the manufacturer to list his products in Dmart, and customers also get benefits by purchasing their products from Dmart.
Here, the retailers, or departmental stores, who can not negotiate in the price of products, can not compete with Dmart stores in terms of pricing and discounts.
One Time Investment in Assets Strategy
More than 80% of Dmart stores in India are owned by Dmart, i.e. they are not paying any liabilities to run those stores like rent or lease, and that’s why they can save a huge amount per month or year.
There are also pros and cons of this method, the con of this method is the initial growth is very low because to open own store, there is a huge investment required on upfront.
But after gaining enough profit for opening the next store, the growth speed will increase like the compounding.
On the other end, they are not supposed to pay any rental amount or lease amount, and that’s why they can save that extra cost.
Free to Decide The Selling Price By Cost Savings
Almost every product of groceries has the MRP decided by the manufacturer, and retailers can not sell that product for less than it.
If he tries to do so, he will have to bear a huge loss very few times, where Dmart is taking advantage of this situation.
For example, if you are a Candle Manufacturer, you can decide the MRP of the candle, and the retailer can not exceed it, or can not sell it at less price, because the profit margin is prefixed.
Now, whenever you would have visited the Dmart store, you might have noticed that Dmart is not providing a luxurious infrastructure, lighting, many counters, servers for customers, right?
Even though the product arrangement is also not too convenient, and not arranged with enough distance.
Because these all aspects are cost-increasing factors, and Dmart focuses on offering the products at the lowest price than the market rate.
This was the first method for cost-saving, and the second reason is if they can negotiate the purchase price of products from the manufacturers.
Retailers or any superstore, can not change the MRP printed on the product, but they can downgrade the selling price by giving discounts to the customers.
But Dmart can negotiate the purchase price of products and get them at a low price.
Now you might be thinking why the manufacturers will give a huge discount in price to Dmart, right? There is a specific reason.
The Earliest Payment to Manufacturers
The transaction, purchase, and sales are not like the retailing between the manufacturers and superstores.
Manufacturers give the goods to the superstore on the credit system, which means they give the liberty of some days to pay the number of orders to superstores.
It depends on terms, and other superstores repay the payment in 30 days, 45 days, and 60 days where Dmart clears the dues in just 6-7 days, and it’s its very powerful strategy to ask for the negotiation to the manufacturers.
The sooner Dmart pays to the manufacturer, the more discount the manufacturer gives to Dmart which causes a decrease in the cost price.
More Customers Engagement
Hence, Dmart keeps the prices low, so Dmart’s stores are crowded, and the goods are sold more, and the goods are sold more, so every manufacturer wants their goods to stay in the store and sell more.
So in this way, Dmart is selling in volume, so the manufacturer also gives a volume discount to it.
Focusing on Regional Goods
Dmart also focuses on keeping regional goods, like if any local brand is popular in Maharashtra, then you will get it in Dmart.
And this thing makes Dmart different from other superstores because national products were available in other superstores, but for local brand products, customers had to go to the grocery store.
Dmart has tried this; you do not even have to go to the grocery store for the things of regional brands, you can also get that in Dmart.
So due to these reasons, Dmart became India’s Fastest Profitable, Growing and Scalable Supermarket chain.
How to Get Dmart Franchise
It might be quite interesting to get a Dmart franchise, but let me inform you that Dmart does not provide the franchise, it has all its own stores.
But, it doesn’t mean that you can not make business by associating with Dmart, hence, there are many ways by which you can start and grow your business by getting connected with Dmart.
You can become a supplier of some categories of products for Dmart, or if you have a space or land located in the premium territory, you can offer that land to Dmart on rent.
Now you might be thinking that if Dmart does not have a franchise model, then how can we do the business with Dmart, right?
No worries, all questions are going to be answered in just a couple of minutes below.
Be a Partner With Dmart
You need to visit the Dmart official site to become a partner, where you will have the option of “Partner with us”.
After clicking, you will get two options of becoming a partner with Dmart to grow your business.
That means you have two options to associate with Dmart in search of growing your business or making money without doing business.
If you are a manufacturer or a big trader of any product which Dmart is selling, then you can associate your business with Dmart to increase your sales.
You will get a form which you have to fill with the required details, and submit it. After submitting the form, Dmart will connect you for the further process.
The quality of your products must be good, pricing should be competitive, if your products pass through all the aspects, you can associate your business with Dmart as a supplier.
If you have vacant land or space, and you want Dmart to open a store, you can approach Dmart to do so by the website.
If your land is in the prime location and seems to gain lots of the audience for grocery and other items for people’s needs, you can offer it to Dmart, and Dmart is supposed to pay you your expected rent.
Only a good amount of rent will not alone benefit, but the value of your land will increase exponentially, and you can establish a small business as well around the Dmart store.
Let’s suppose you have 10,000 square feet of land, and you give 8,000 square feet of land to Dmart, then you can start a business of food or beverages stores, and can make good revenue.
Now, think that Dmart drives very high numbers of people for its business and if you grab only 20%-40% of that audience for your business, you can make thousands of rupees per day.
Online Business Model of Dmart
Dmart is the best business model in the retail business industry and was firmly in competition with online retail businesses.
Dmart business model was so strong that it did not need to start an online business or online delivery.
But during and after the covid pandemic, it has to jump into the online business model, and with the perfect strategies, it is running too good, and making a huge profit of revenue.
The online business model of Dmart is known as Dmart Ready.
You can order your groceries and other products on the online portal of Dmart and can collect them from the Dmart Pickup Store.
Conclusion on Dmart Business Model
Hence it is clear that Dmart is not offering a franchise business model, but it does not close the doors to enhance the business for you.
As I said earlier in this article, if you are a manufacturer of any product or you have vacant land in a premium location, Dmart can give you your price as rent.
Dmart works on a customer satisfaction strategy, and it does accept low-quality products to sell from any manufacturer.
The ultimate goal of Dmart is to give the standard products to the customer at a lower rate than the market.
And, finally, this strategy made the owner of Dmart Mr. Radhakishan Damani the second richest person in India.