Distributors often report: the larger the scale, the less profit; the stronger the brand, the less profit; the more emphasis on culture, care, and corporatization, the less profit. Under the new situation, distributors need to innovate and move forward, with the most fundamental being to improve internal management and reshape comparative competitive advantages. By motivating employees to actively expand networks, maintain core terminal displays, and promptly clear near-expiry products, they can enhance their own strength to cope with fierce competition. For distributors, reshaping comparative competitive advantages is urgent. 1 Internal management mechanisms need to be restructured Nowadays, most employees lack not work ability but work attitude. The essence of personnel management for distributors is not control but stimulating vitality and releasing potential. This requires distributors to set up corresponding mechanisms to motivate employees to unleash their potential and create benefits for the company. Compensation mechanism The purpose of setting up a compensation mechanism is to let some excellent people get rich first. This requires following several principles: First, the income of the first place and the last place should differ by more than ten times; second, focus on promoting products that can make both employees and the trading company money and increase the commission ratio; third, employees' wages should be higher than those of other companies in the same region and industry, such as grassroots employees more than 20% higher, and middle and senior management more than 50% higher; finally, let employees do things according to the money they get and take responsibility accordingly, ensuring that responsibilities, rights, and benefits are equal. On the surface, setting up a compensation mechanism makes distributors pay more costs, but the benefits brought by stabilizing employees and excellent teams far exceed the costs paid. Promotion and demotion mechanism There are usually two types of promotion and demotion mechanisms: promotion in position and promotion in salary. The promotion and demotion of employees in trading companies must be linked to performance completion, with performance as the sole criterion. The automatic promotion and demotion mechanism needs to follow four key points: First, list N-level promotion system, and employees' monthly and annual salary assessments are never fixed; second, list promotion standards for each level based on profit orientation, with economic incentives as the main and administrative levels as auxiliary; third, publicly commend and warn monthly for promotions and demotions; fourth, grandly reward and publicly award the promotion and demotion flowing red flag or black flag. The setting of this mechanism must establish the game rules in advance, clarify the promotion and demotion standards, promote the capable and demote the weak, and implement promptly; at the same time, strengthen talent reserves to ensure the catfish effect. For employees who complete the lowest tasks for three consecutive months, they must be eliminated. Internal PK mechanism Without a sound competition mechanism, the distributor team is prone to being weak, scattered, and lacking combat effectiveness and ambition. Through PK to stimulate team vitality, the winning side is encouraged, and the losing employees continue to work hard. The team is surrounded by positive energy, which can continuously bring benefits to the company. Here are some operational points to note: find a good PK target, which can be yourself, colleagues, or team-to-team PK. After determining the target, clarify the PK project, standards, and time. The internal management of a trading company is a very complex matter. In addition to the compensation mechanism, promotion and demotion mechanism, and PK mechanism mentioned above, there are many other aspects to pay attention to, such as the principle in the recruitment mechanism that the team leader who lacks staff is responsible for recruitment and training. In addition, a Bole Award can be set up to encourage employees to actively recommend talents and give the recommender certain rewards. 2 Set up a reasonable compensation system Generally speaking, a salesperson's monthly salary = basic salary + performance salary + assessment salary. How to use salary design to improve employee enthusiasm? Let's give two examples below. First, look at a single employee case. According to the monthly cumulative sales task completion assessment method to receive wages. Anyone who fails to complete the monthly cumulative sales task will only receive the guaranteed basic salary from the month of failure, and can only receive the previously unpaid performance salary after completing the cumulative monthly task. Employees who do not overfulfill the annual task by the end of the year will not receive a year-end bonus. For example, a salesperson's basic salary is 2,000 yuan (including 1,200 yuan for transportation and meals and 800 yuan for discipline assessment), performance salary is 4,000 yuan, plus other comprehensive assessment methods. If he fails to complete the sales task for eight consecutive months, then he can only receive a guaranteed basic salary of 2,000 yuan per month for those eight months. When he completes the sales task in the ninth month, the performance salary for the previous eight months will be paid together with the ninth month's performance salary. Moreover, if the cumulative completion in the ninth month is 120%, then the ninth month can also receive a bonus of 120%-100%*4000=800 yuan. If the salesperson continues to overfulfill the cumulative task by 120% until the end of the year, then the year-end bonus is (120%-100%)12 months4000=9600 yuan. Now look at a team combat case. The distributor divides each regional market into categories A, B, and C according to the previous year's sales volume or profit. Markets or channels with large sales volume and high profit are classified as A, markets with low profit and low sales volume are classified as C, and the rest are B markets. For example, markets with annual profit of more than 1 million yuan are A, markets with annual profit of less than 400,000 yuan are C, and markets with annual profit between 400,000 and 1 million are B. Among them, the guaranteed basic salary for salespeople in A markets is 5,000 yuan, B markets is 3,500 yuan, and C markets is 2,500 yuan. The division of areas is implemented in conjunction with the PK challenge system. The distributor determines the next year's sales target based on strategy each year. Each area can conditionally challenge tasks and markets, with each challenge increasing the task by no less than 5%. Personnel in the same type of market can challenge each other. If a low-level person challenges a high-level person, they must overfulfill the task by 30% within the assessment period to be qualified. All challengers who fail to complete the cumulative monthly challenge task for 5 consecutive months can be judged as challenge failure. Those who fail the challenge return to the original market and are downgraded to the original level. If the original market already has personnel and does not accept the challenger's return, the company will make other arrangements. High-level personnel, after overfulfilling their team's task by 30%, can apply to merge the next market and enjoy the next level of treatment jointly. Teams that overfulfill the cumulative monthly task will be rewarded according to the corresponding level. For example, for every 5% over, A, B, and C markets are rewarded 500 yuan, 300 yuan, and 200 yuan respectively, with no upper limit. Those who fail to complete the cumulative monthly task will have their basic salary deducted according to the corresponding difference percentage. If they strive to complete the previously uncompleted cumulative monthly task within the assessment period, the deducted portion will be returned. At the same time, the excess performance salary will be calculated and paid from the month when the cumulative monthly task is completed. For distributors and salespeople, it is important to not only conquer the territory but also defend it. This method is relatively complex, but reasonable operation has a greater effect on stimulating team potential and driving sales growth. 3 Sales assessment model should achieve both volume and profit It is necessary to completely change the past assessment model that focused mainly on sales volume with other assessments as auxiliary, to a comprehensive assessment model oriented by profit, so that salespeople actively promote and sell new products with profit, thereby bringing profits to the company. Scoring by markup rate The distributor divides all company products into grades A, B, C, D, E, F, G, H according to the markup rate per piece, and corresponds to corresponding scores. The relationship between markup rate and scores is a company secret. (See Appendix 1 for details) Scoring by markup amount The distributor lists the markup amount of all products, and converts the different markup amounts per piece into corresponding scores. The ratio can be freely set. The relationship between gross margin and scores is a company secret. (See Appendix 2 for details) Scoring by net profit amount Nowadays, the daily and monthly expenses of each salesperson, each area, can be clearly calculated. The distributor needs to use the total monthly expenses of each area to deduct the average expense per piece. Among them, total expenses equal the sum of warehouse fees, personnel wages, rent, commissions, bonuses, benefits, promotions, store entry fees, transportation fees, vehicle management fees, office fees, entertainment fees, etc. The average expense rate is calculated based on the total expense rate of the first half of the year to determine the average expense rate for the next year. That is, the previous year's expense rate = previous year's total expenses / previous year's total sales volume * 100%, where total sales volume is not calculated at the manufacturer's price but at the distributor's ex-warehouse price. The net profit per piece (pure profit share) = (ex-warehouse price - factory price) - ex-warehouse price * expense rate. (See Appendix 3 for details) This method can effectively avoid the situation where salespeople use company money to promote products because they cannot complete sales tasks. Reasonable assessment design directly presents to the distributor the task completion rate of each salesperson, that is, the profit brought to the company. By comparing scores among different employees, it is easier to distinguish the contribution rate of employees to the company. With one month as the assessment period, normally, each salesperson completes 30% of the monthly task in 10 days, 60% in 20 days, and 100% in 30 days. If the cumulative task is not completed, there is no bonus, only basic salary, strictly following the game rules. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operation management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]