The 2020 Spring Festival is just around the corner. In recent days, I've chatted with several dealers, and we've all poured out our grievances. Business was already getting harder, and with the pandemic, it's become even more difficult.
Some bosses say their employees don't understand them; they treated them well before, but now that the market is tough, they won't put in extra effort. Others say companies don't consider dealers' difficulties; sales targets remain unchanged, and cost support hasn't increased. Some even say they can't hold on anymore—with such large investments and such low profits, they might as well put their money in a fixed bank deposit. Such discouraging words are everywhere.
But some dealers have turned things around and earned substantial income by relying on the attributes of their product categories (such as rice, flour, oil, and instant noodles), while others have achieved profitability through business model innovation. Each market has its own problems and corresponding solutions. Today, I'll discuss a few dealer headaches and their solutions.
-01- How to Resolve the "War of Words" Over Daily Visits by Sales Staff?
Due to the pandemic, terminal stores were conservative in accepting goods in 2020. The most direct result is that even reasonable stock pressure from sales staff is difficult. At the same time, with reduced foot traffic, product sell-through also seems sluggish.
So the first problem is: low number of closed deals and low transaction amounts.
Solution: The boss believes that sales staff in urban/township areas can visit at least 40/30 outlets per day, but the staff complain that they can only manage 30/25 at most. They either ask for overtime pay or want to hire more people to reduce the workload.
A thousand-mile dike collapses from an ant hole. This seems like a small squabble; sales staff won't make a big fuss, but there are policies above and countermeasures below. If not properly addressed, it can lead to resentment among staff and seriously affect human efficiency.
The issue of visit counts is essentially a route planning problem. Whether it's 40 or 30, it's not decided by anyone arbitrarily; it's the result of digital calculation. Let's break it down step by step.
1. Area:
A salesperson's service area is determined by the number of outlets. Generally, in urban areas, there is one outlet per 200 people; in townships, one per 400 people. Based on the administrative area's population, you can calculate the number of outlets. These outlets should be divided into routes by block and street.
Note: Use the outlet coverage rate (brands usually have data on average national service outlet coverage) to calculate the total number of outlets for the business.
2. Routes:
Depending on the product attributes, route planning generally has three forms:
a. 6 routes (weekly visits); b. 9 routes (ten-day visits); c. 12 routes (semi-monthly visits).
At this point, based on the route plan, you can calculate the time to reach the first store on each route.
3. Outlets:
There are three key points for outlet time planning:
a. The number of outlets in the area should be 1.5 times the number of service outlets, to facilitate dynamic replacement by sales staff.
b. Outlet classification: Classify outlets into several levels based on sales volume and arrange different visit times. For example: Top 20% take 10 minutes, Top 50% take 5 minutes, Top 100% take 3 minutes.
c. Distance between outlets: Plan travel time between outlets based on outlet density.
Next, calculate with the sales staff:
a. Is the number of outlets in your area up to standard?
b. Time for one route = travel time to first store + visit time by outlet level + travel time between outlets + return time (if you don't return to the company after work, it's not counted). Add morning and evening meeting time—does it reach 8 hours?
Summary: Outlets are the foundation of performance. The number of daily visits may seem trivial, but it actually affects sales and profits. Many managers make arbitrary decisions on visit counts, and sales staff don't organize their routes themselves, leading to pent-up frustration that significantly impacts performance.
Furthermore, we know that management of the 70s and 80s generation relies on orders, while management of the 90s generation relies on communication. Without "convincing by reason," the direct results are high turnover rates and low personnel efficiency.
-02- How to Increase Brand Companies' Cost Support?
The 2020 pandemic made dealers deeply realize the importance of brand company resources. Especially for dealers who stocked up on gift boxes during the Spring Festival, the support rates from brands after unsold inventory varied greatly. In normal operations, to grow the market, brand support is essential; only with proper cooperation can a win-win situation be achieved.
Dealers are closely connected and have found that brand support is no longer a "big pot" (equal distribution). How can you maximize cost support?
First, correct some misconceptions:
1. The more cost support from the brand, the better—this is a misconception. Both parties are in a business partnership, each with their own cost-effectiveness accounts. Costs exceeding the cost-effectiveness ratio generally won't be invested. Even if over-invested, it means higher market expectations and requirements. If expectations aren't met, costs will be cut off decisively.
2. Asking for more costs and intercepting more leaves more profit—this is a major misconception. Don't think about falsifying reimbursement documents to withhold costs. Brands calculate the total account and control the overall cost rate. Even if you get some costs by luck, it's with the brand's tacit approval (possibly to be settled later). Later, you'll be blacklisted by brand managers, and they may fear being implicated in audits if you falsify, so they won't even apply for costs for you or inform you.
3. Preferring "naked price" operations, asking for naked prices and controlling costs yourself. First- and second-tier brands won't agree; those that do are small-scale companies with high product risks.
So how can you maximize brand cost support? It's recommended to communicate from the following three aspects:
1) Cost transparency to ensure you don't lose trust with the brand: When applying for costs, list the usage details and achievable goals; when reimbursing, specify cost usage and achievement.
2) Proactive investment to leverage small amounts for big gains: The market is mutual, and so are benefits. There's no reason for one-sided investment. Smart dealers invest proportionally when applying for costs, e.g., if the market needs 10 yuan, the dealer and brand invest 80/20.
3) Strive to make your market a key market or pilot market: Brands won't scatter costs like pepper; they'll focus on key and pilot markets.
4) Cooperate well with the brand: The higher the cooperation, the greater the cost support.
Summary: Some dealers always feel like "stepchildren." Have you made the mistakes mentioned above? Or haven't you operated according to the methods below? Please compare.
-03- Unreasonable Stock Pressure Is the Biggest Profit Killer: How to Deal with Brand Personnel?
A dealer once faced this problem: He mainly dealt in Nongfu Spring. At year-end, the city manager, to get a year-end bonus of tens of thousands, asked the customer to take delivery of goods worth over a hundred thousand. The dealer was in a dilemma.
If he didn't, he feared offending the city manager. If he did, since it was the season before the water policy, he'd definitely lose more than 50,000. In the end, he shipped the goods and accepted the loss. But it felt terrible; he didn't earn that many 50,000s in a year. Many dealers have faced such situations. How to handle them properly?
First, understand the common tactics of brand companies:
1. Offer strong policies, even including warehouse subsidies: Dealers should act according to their capabilities and not lose the watermelon for a sesame seed.
2. Regional or category segmentation: If targets aren't met, they may open new accounts in the area or split categories to another customer.
3. Persistent nagging: These brand managers have no special skills; they win by constant nagging.
Suggested handling methods:
1. Be neither humble nor pushy + soft resistance: Don't worry about losing the dealership, and don't resist stock pressure. Brands compare horizontal achievement rates.
That is, as long as your achievement rate isn't too far behind among regional dealers and you maintain a medium level, don't worry about the dealership issue (note: maintain good relationships with brand personnel). As for payment and delivery, you can find various reasons to delay; time passes quickly.
2. Don't accept stock pressure without a sell-through method: When brand personnel push stock, first analyze the difficulties. If they have reasonable solutions (new channels or cost support), you can consider it.
3. Be a "villain first, gentleman later": Get promises for costs in writing, signed, to ensure no future problems.
4. For simple and crude dealer managers, keep good contact with their superiors. If all brand managers are the same, it's best to give up the business; otherwise, you'll lose more than you gain later.
Summary: Sales tasks are the lifeline of brand personnel. Sometimes you need to put yourself in their shoes and support each other. Any one-sided support won't last. Brand personnel seek maximum support from dealers, and dealers seek maximum achievement from brand personnel. Mutual understanding is the cornerstone of cooperation.
-04- How Can Dealers Leverage Their Core Competitiveness?
Editor-in-chief of New Distribution, Mr. Yuan Lai, divides dealers into three categories, each with its core competitiveness, as shown below:
Core advantages of brand dealers can be summarized as:
Holding brand products, strong control over outlets, able to attack or defend.
Rich product resources; brand personnel will find dealers through products, giving priority opportunities for product selection.
Can "borrow a chicken to lay eggs" to increase profits, especially with strong brands; small sales policies can collect market prepayments, reducing operational pressure.
Core advantages of category dealers can be summarized as:
Fully integrate and utilize resources. Most supermarket procurement is divided by category. Specializing in one category facilitates better coordination with retail terminals.
Easier to adjust channel models based on product characteristics, better integrate manufacturer resources, and save costs.
Form competitive advantages in a certain industry, making it easier to obtain agency rights for quality products and squeeze competitors.
Core advantages of platform dealers can be summarized as:
Facilitate internal management and attract excellent talent; strengthen channel control.
Accelerate the speed of new product distribution and facilitate market cultivation.
Reasonably allocate resources and improve capital turnover.
Summary: Dealers should first clarify their category, identify their advantages, and then find ways to monetize them. Also, remember: don't rush before core advantages are formed; market operations need steady progress.
Final Thoughts:
The above four points are the consensus issues from my recent chats with dealers. The problems themselves aren't hard to solve; it's just that our dealers lack problem-solving planning skills, so they keep repeating the same mistakes.
Sometimes brand managers need to be more down-to-earth, communicate deeply with dealers, and rely less on gut feelings and more on market visits. I believe any brand will achieve both sales and profit growth.
Tips will be paid 400-2000 yuan once adopted.