"After 10 years of development, I have deeply fallen in love with this industry. Although many say business is tough, when you look back at other industries, the FMCG distribution business is enduring and growing stronger." Recently, we interviewed a post-90s first-generation distributor, Fang Fan, general manager of Guizhou Fang Wang Yuan Trading Co., Ltd. The above words are his views on the FMCG industry. Graduating and immediately facing unemployment, he started his own business. This year marks his first year past 30 and his tenth year in business. In a decade, Guizhou Fang Wang Yuan Trading has grown from nothing, representing dozens of brands including Totole, Chubang, and Lotus, with a business scale of nearly 80 million yuan and an 8,000-square-meter three-dimensional warehouse to support existing brands and new categories like snacks, aiming for platform-based multi-category operations. From a complete outsider to a leading local distributor, his thoughts may inspire many distributor friends. First Venture: A Bumpy 10-Year Journey 2013 was a memorable year for Fang Fan. That year, he had just graduated from university and was still confused about the future. Despite majoring in civil engineering, he did not pursue a related job. Instead, driven by an interest in business, he chose to start his own venture. Why the FMCG industry? Fang Fan's positioning was clear: people's "food, clothing, housing, and transportation" are the most basic physiological needs in Maslow's hierarchy. This industry is stable and will persist. When he first entered the industry, his approach was simple: mainly traditional store-based business, relying on walk-in customers and making sales through phone calls, then arranging delivery. This continued until 2016, when Fang Fan realized that good service is the strongest market competitiveness and the key to sustainable development. Without a business team or stable customers, he would eventually be eliminated. From 2016 to 2019, Guizhou Fang Wang Yuan Trading experienced its first turning point, successfully building a team system and improving business processes. This period of transformation was undoubtedly painful for Fang Fan. First, the people problem: salespeople's capabilities couldn't keep up, and store coverage was low. Existing employees lacked business development experience, struggled to adapt to the new model, and turnover was severe. Second, market challenges: due to a weak market foundation, to seize market share, they increased credit sales, raised transportation costs, increased market investment, and faced higher bad debt rates. Some payments were never recovered, leading to losses. In the early stages, without established customer relationships, salespeople, to secure orders, allowed stores to sell first and pay later, without setting credit periods, causing significant capital security issues. During this time, Fang Wang Yuan Trading suffered periodic losses. The most telling data: previously, delivery vehicle load rates exceeded 90%, but with fewer customers in the new sales model, load rates fell below 50%, essentially losing money on each delivery, but they had to persist. It wasn't until 2019 that Fang Wang Yuan Trading gradually got on track. Through three years of accumulation, they developed standardized business management and store management systems. Manage people with systems, manage affairs with processes, and drive growth through management. Starting in 2019, Fang Wang Yuan Trading entered explosive growth, growing from less than 20 million yuan to 80 million yuan in four years. In 2023, they introduced Zhoupu Data's "coaching-style consulting + operational accompaniment" guidance service, optimizing management systems (leadership, organizational system adjustment, precise goal planning, compensation and performance management, tracking systems) and leveraging digital tools for precise marketing, stabilizing the base while achieving new leaps. Business Side: Team is a Treasure Let Employees Share in the Benefits of Business Growth Fang Fan told New Distribution that many old distributors think once money goes into the boss's pocket, they are unwilling to invest again, and employees do not share in the benefits of business growth. In Fang Fan's view, running a good company means not just solving employees' "food and clothing" problems but improving their living standards. To this end, Fang Wang Yuan Trading spent a lot of time designing compensation and performance. The core principle is to let employees share in the benefits of business growth. Their compensation structure: sales amount salary + profit salary + KPI assessment salary + 10% net profit share. The 10% net profit share is distributed to the sales team based on multiple dimensions: 'sales contribution & profit contribution & return ratio & return loss'. The core of KPI assessment: assess sales in peak season and process in off-season to balance salespeople's income. Most categories have peak and off seasons. Net profit sharing is substantial in peak season, but in off-season, KPI assessments help boost salespeople's income. Another important point: return ratio assessment should be a focus in both peak and off seasons. In sales, after working for over a year, salespeople build relationships with stores and have techniques to push inventory. A store might normally sell 50 units, but a salesperson might push 100 units to earn rewards. Overstocking leads to returns; if not handled, customers are lost; if handled, the company suffers. Fang Wang Yuan Trading has a two-tier approach to return assessment. First, return ratio must not exceed 5%. If it exceeds 5%, a penalty of 1.5 times the KPI reward is applied. For example, if the sales assessment reward is 500 yuan, but the return ratio exceeds 5%, the salesperson must refund 750 yuan. Second, the return ratio in the first month determines the sales salary in the second month. For instance, if the collection commission rate is 1% last month, and the return ratio exceeds 5%, the commission rate drops to 0.8% the next month. Additionally, to reduce salespeople's workload, for brands with good sales and potential, Fang Wang Yuan Trading has added dedicated brand operation manager positions responsible for brand operations. With more brands and products, salespeople may be unclear about key tasks at each stage. Brand operation managers develop work plans broken down by month and week. Key products to sell, display requirements, and inspection standards are all managed by brand managers. Salespeople only need to execute, avoiding confusion about goals and direction. This compensation and management model is advantageous for ambitious salespeople. In both peak and off seasons, they earn significantly higher salaries than local peers, improving staff stability. Store Side: Customers are Intangible Assets Serving the Terminal Well is the Distributor's Greatest Advantage In store management, Fang Wang Yuan Trading reorganized all terminal stores, using Zhoupu Data's system to classify and manage stores. Stores are divided into three levels with credit management: A-class stores: high sales, good credit, granted 10-20 day credit periods and a certain credit limit; B-class stores: average sales, good credit, granted 7-day credit periods and a certain credit limit; C-class stores: poor credit, no credit allowed, cash on delivery; Additionally, a fine system is established: salespeople must collect payments within the credit period. If not collected within the credit period: For receivables under 5,000 yuan, exceeding the credit period incurs a fine of 10 yuan/day; For receivables between 5,000 and 10,000 yuan, exceeding the credit period incurs a fine of 20 yuan/day; For receivables between 10,000 and 30,000 yuan, exceeding the credit period incurs a fine of 50 yuan/day; For receivables above 30,000 yuan, exceeding the credit period incurs a fine of 100 yuan/day. Through standardized systems, salespeople follow procedures, effectively avoiding messy accounts and bad debts. Fang Wang Yuan Trading also adjusted store display fee systems. Many distributors pay display fees as long as stores set up displays. But stores often take fixed fees for granted, and most store owners think your sales performance is irrelevant to them. Therefore, Fang Wang Yuan Trading innovated by replacing fixed display fees with 'tiered fee investment'. For example, if a store replenishes 5 units in the first month, the display fee is 100 yuan/month; if replenishment increases to 10 units the next month, the fee rises to 200 yuan/month. This is similar to the logic of in-store promoters in large stores: consumer purchase decisions are easily influenced by promoters, especially for products like condiments where brand awareness is low. In small terminal stores, the store owner is the best promoter. Through this incentive-based fee investment, store owners' enthusiasm is fully mobilized, effectively improving product sell-through. Fang Fan told New Distribution, terminal stores are the core asset of distributors; controlling terminal stores is the greatest advantage in regional competition. Next Decade: Deepen and Broaden Regarding future development and plans, Fang Fan told New Distribution there are two directions: first, build a one-stop supply chain platform for stores; second, extend downstream by opening stores. In the current market environment, large store business is shrinking while small store business is growing. Future growth opportunities lie first in making small and medium stores more refined and deeper. Fang Wang Yuan Trading currently mainly deals in condiments, and some products have low turnover, weakening ties with small and medium stores. In 2023, the company added grain and oil categories. To strengthen channels, they need to expand more categories to increase store stickiness. On the other hand, small and medium stores are changing. After being repeatedly educated by national internet platforms, they are now accustomed to one-stop ordering on platforms. Store needs focus on "fast," "many," and "few": fast delivery, many product choices, and small order quantities. Distributors must adapt to these changes and continuously meet the needs of small and medium stores, which inevitably requires deepening the supply chain. Why open their own stores? This comes from direct market feedback. Fang Fan found that consumers now often choose supermarkets or convenience stores because they offer a wider and richer product selection, more transparent prices, and easier comparison and discovery of promotions. Additionally, these stores are conveniently located, saving consumers time and effort, allowing quick purchases. Future trends suggest community stores will also move toward standardization, with standard management models and shopping environments. In lower-tier cities, such standard convenience stores are rare, so early positioning might be an opportunity. Final Thoughts "Other companies are laying off staff, but Guizhou Fang Wang Yuan is continuously bringing in talent," Fang Fan believes that underlying consumer demand always exists and won't disappear due to external changes. What is the survival logic for distributors? Channels and terminal resources. As long as distributors grasp these fundamentals, business can continue. To grow bigger and stronger, distributors must know how to "share profits" and continuously innovate. In the past, New Distribution has visited many excellent large distributors. When the environment is poor and many report declining sales, they are growing instead. The fundamental reason is their ability to grasp what remains unchanged amid change. What is unchanged? Consumer demand for goods always exists; the only uncertainty is when and where consumers buy, i.e., scenarios and channels. For distributors, there's no need to overthink. As long as they capture the core channels where consumers buy and do them deeply and thoroughly, business won't be too bad.