Money
FMCG schemes and free goods: how a distributor keeps track and keeps the margin
How company schemes like buy 10 get 1 reach the shop, where free goods go missing between the godown and the shop, and how to record every free piece so your claim adds up.
4 October 2026 · 7 min read
Short answer
Write every free piece on the bill as its own zero-price line. Give salesmen the scheme rules in writing, and switch a scheme off the day it ends. Count free goods in van stock. At month end, total the free quantity by product: that is the number your claim to the company should match. Free goods that are not on a bill are simply missing stock.
Every month the company sends new schemes: buy 10 get 1 free, buy a soap and a shampoo and get a toothpaste, an extra 2% off on a new pack. The shops love them. Your salesmen use them to close orders. And at the end of the month, many distributors find the van short, the godown count off, and a scheme claim that the company will not accept in full.
The scheme itself is not the problem. The problem is that free goods move without a record.
The common kinds of scheme
- Quantity scheme: buy a set quantity, get some free. “Buy 10 get 1.”
- Combination scheme: buy two or more different products together, get a reward. “Soap and shampoo, get a toothpaste free.”
- Discount scheme: money off the bill instead of free goods.
- Your own scheme: one you run yourself, to win a shop or clear old stock. You pay for this one, not the company.
Where free goods go missing
- Free goods are handed over but not written on the bill.
- The salesman gives the free item even though the shop bought less than the scheme needs.
- The scheme has ended, but salesmen keep giving it because nobody told them.
- The shop never received the free item at all, and does not know it was meant to.
- Free goods are not counted in the van’s stock, so the van “comes back short”.
Each of these is small on one bill. Over a month, across all your vans, it adds up to real money. See where a distributor’s margin goes for the other leaks that hide next to this one.
Six rules that keep schemes clean
Scheme announced
rules written down
Salesmen told
same day, in writing
Free line on the bill
zero price, shop sees it
Counted in van stock
nothing leaves unbilled
Month-end total
matches the claim
1. Write the rules down
For each scheme: which products, how many, what is free, and the start and end date. Keep the company’s scheme letter with it.
2. Tell every salesman, in writing
A WhatsApp message to the team the day a scheme starts and the day it ends. A scheme that lives only in the owner’s head will be applied five different ways.
3. Every free piece goes on the bill
As its own line, at zero price. The shop sees what it got for free, which also makes the scheme feel bigger to the shop. And your stock count now knows where that piece went.
4. Apply schemes from the rules, not from memory
If the shop bought 9, it does not get the “buy 10” reward, even if it is a good customer. If you want to give it anyway, that is your own scheme, and you should record it as one.
5. Count free goods in van stock
When the van is closed at night, free goods count as goods that left the van. If they are on the bills, the van matches. See how to close a van’s day.
6. Total the free goods every month
Add up the free quantity of each product for the month. If the company pays you back for its schemes, this is your claim. Your total should match what the company’s statement says; when it does not, you have the bills to show the difference.
What a scheme really costs
“Buy 10 get 1 free” sounds like 10% off. It is not. The shop takes 11 pieces and pays for 10, so 1 in every 11 is free: about 9.1% of the goods.
When the company pays for the scheme, that matters less. When it is your own scheme, compare it with your margin on that product. If your margin is smaller than the free share, every sale under that scheme loses money unless it brings in sales you would not otherwise get. Check by comparing sales of that product for the weeks before and during the scheme.
How free goods are treated for GST depends on how the scheme is set up. That is a question for your accountant, and it is worth asking once for each kind of scheme you run.
How Mulberry Sales helps
You set up each scheme once: which products trigger it (all of them together, or any of them), and what is given free, including several rewards for one scheme. When a salesman makes a bill that qualifies, the free lines land on the bill by themselves, so he does not have to remember the rules. He can still change or remove a free line for a shop that does not want it (Growth plan and up). When a scheme ends, you switch it off in the office instead of relying on every salesman to remember. Free lines come off the van’s stock like any other line, so the van matches at night. The product report shows, for any dates, how many of each product were sold and how many went free, which is the starting point for your claim (Growth plan and up). See FMCG distribution software.
Questions people ask
How do distributors track free goods given under a scheme?
Put every free piece on the bill as its own line at zero price, so the shop sees it and the stock count includes it. At the end of the month, add up the free quantity by product. That total is what the company's scheme claim should match.
How much does a 'buy 10 get 1 free' scheme cost?
The shop gets 11 pieces for the price of 10, so 1 in every 11 pieces is free. That is about 9.1% of the goods, not 10%. If the scheme is yours and not the company's, compare that 9.1% with your margin on the product before you run it.
Why does the van come back short when schemes are running?
Usually because free goods were handed out but not written on the bill. The stock left the van, but no bill shows where it went. Writing every free piece on the bill closes that gap.
Found this problem in your business?
Don't estimate it. Run one van on Mulberry Sales for 14 days with your own shops, products and salesman, and measure it. One price covers your whole business, not each salesman.
Read next
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Where a distributor's margin actually goes
Five leaks billing software never shows: counter discounts, unrecorded free goods, unclaimed damage, uncounted returns, and credit that ages quietly.
Operations
How to close a van's day: stock and cash reconciliation in fifteen minutes
One formula for van stock, one for cash, the order to count them in, and the five usual reasons a van comes back short. Works in a notebook or any software.