Terminals are the final link where consumers decide to purchase, and the ultimate realization of profit. Properly operating terminals can guide consumption, enhance brand image, and increase product flow, securing more and better survival space and resources for distributors. As industry competition intensifies, terminals are the core lifeline affecting distributors' regional market sales, making increasing terminal sales a top priority. As such an important terminal, a small change can affect the whole system. However, distributors often have the following five misconceptions about terminals.
Emphasizing sales over market Most distributors and even employees focus solely on business tasks like delivery and payment collection, making product sales their only goal, while neglecting market development, maintenance, system and network channel construction, and helping customers grow stronger and develop together. In fact, terminal marketing requires planning ahead and controlling the situation during the process to achieve a good outcome. A skilled chess player plans the overall situation, while an unskilled one focuses on individual moves. When a product launches, it's worth considering which terminals to place it in and how to place new products, rather than urging salespeople to simply sell more without knowing where true sales come from. Truly giving products to appropriate terminals and appropriate promotional intensity to appropriate terminals enables market control. Some distributors, in the sales process, to force large quantities into channels and occupy terminal warehouses, implement tiered policy support, such as using 10 cases, 50 cases, and 100 cases as thresholds, with increasing policy intensity. This is a method for distributors to actively promote sales, but sometimes it leads to reduced channel profits and complaints from terminal stores. During the activity, some terminals, tempted by the tiered support policy, see the attractive 50-case policy and choose to order 50 cases, but in reality, the terminal's capacity is only 10 cases per month. From the distributor's perspective, short-term sales increase significantly, yielding good results. However, because the terminal's capacity is insufficient, overstocking occurs, and the terminal resorts to price reductions to clear inventory. Even so, it still yields higher profits than ordering 10 cases. This leads to reduced overall channel profits, dragging down quality terminals. The reason channel profits hit bottom is that distributors fail to control the situation. Additionally, the policy intensity for 10 cases and 50 cases inevitably differs, resulting in "spending more but facing price cuts." This is the consequence of emphasizing sales over market, only seeking to sell goods without properly analyzing terminals.
Emphasizing major customers over minor customers Most distributors do not flexibly grasp the customer development principle of "grasping the big and letting go of the small," leading to a focus solely on large customers. Many distributors hold the belief that large customers in the region are paramount. However, the reality is: terminals with large area and many displays may not necessarily serve you; while smaller terminals sincerely sell products, and their sales are also considerable. Thus, terminal customers can be categorized into four types: high sales and high profit, high sales and low profit, low sales and high profit, and low sales and low profit. There are other terminal classification methods as well. But regardless of the method, the purpose is to classify terminals well, facilitating the layout of new products and adjustment of old products. Therefore, customers are not measured solely by overall sales and scale. Additionally, small customers are also important for development; what fits is best. The fundamental goal of distributors is to obtain profit, and true profit comes from terminals, achieved through strengthened management. In the management process, distributors should implement per-person accounting for salespeople and per-store accounting for terminals. For example, a large terminal store brings intense competition. After analysis and calculation, many stores with high competition often have lower product profits, requiring dynamic strategy combinations between large and small customers. Hence, one should not emphasize major customers over minor customers.
Emphasizing major products over minor products Most distributors and salespeople tend to favor best-selling products, but best-selling products are often low-profit products. Many salespeople and even distributors are reluctant to promote new products. Even Master Kong employees prefer to promote Braised Beef Noodles because old products, i.e., best-selling products, are easy to sell; any promotional policy can bring tens of thousands of cases in sales, and sales mean more returns. However, over-reliance on best-selling products, with promotional policies from "buy 10 get 1 free" to "buy 9 get 1 free," and then "buy 8 get 1 free," "buy 7 get 1 free," gradually compresses profits. Channel profit is the foundation for product sales; over time, this can lead to the withdrawal of best-selling products. In the past, brands like Xuri Sheng and Jianlibao encountered Waterloo for such reasons. Therefore, distributors should conduct profit analysis based on the products they operate, considering comprehensive factors such as sales volume, profit level, and brand strength, categorizing products as image-type, channel-type, cannon-fodder-type, seasonal-type, profit-type, etc., and dynamically classify them according to the product's life cycle stage (growth, introduction, maturity, decline), then reasonably combine them in operations. Which products are high-volume but low-profit, serving as tactical products for building channels? Which products currently have profit but low sales, but may become strategic products for the company in the future? Tactics are random and flexible, while strategy is the main long-term product line. For currently selling products with both volume and profit, how to maintain the price system and ensure product sustainability should be the method of product differentiation.
Emphasizing incentives over management Most distributors piously treat every customer as a god, blindly agreeing to their various demands (bargaining, gift distribution, various expenses). However, incentive-based cooperative development policies may be effective in the short term, but due to neglect of management, relying solely on incentives is difficult to maintain fragile relationships with customers. In daily work, distributors often receive feedback from employees: a terminal store on a certain street is a loyal customer, selling dozens of cases per month, so promotional policies should be formulated to maintain this terminal. The saying "no profit, no early rising" applies; incentivizing terminals is not wrong, but management of terminals and communication with customers should not be overlooked. In other words, treat customers as gods, but also prevent them from "changing their affections." For example, what does the customer actually do with the promotional intensity? Additionally, beyond actual execution actions, customer relations are also a key point often mentioned in channels. Therefore, collecting and organizing terminal customer information and managing it can increase customer stickiness.
Emphasizing the middle over both ends Terminal work has three links: first, the products supplied by distributors to terminals; second, the terminals that directly establish buying relationships with distributors; third, the consumers who establish buying relationships with terminals. However, most people only grasp the middle link—terminals—while neglecting the products supplied to terminals and the consumers who establish buying relationships with terminals, resulting in an inability to fully understand products, systematically recommend them to customers, or establish typical consumer profile files to facilitate after-sales service, win consumer loyalty to the product, and secure repeat customers. Currently, the entire food industry talks most about the difficulty of moving sales. In this industry context, most distributors only do front-end and mid-end work, increasing channel promotions and shifting profit distribution to channels, while doing very little back-end consumer work. This is also one of the important reasons for the high failure rate of new product promotions in the market: distributors use channel promotions to distribute new products to channels, but when terminal sales do not move, there is no profit space for consumer pull, and distributors are unwilling to lose money to promote products, so they gradually exit the market, and new product promotion fails. However, the demise of a product is not the final result; the demise of one product affects the channel terminal network built by the distributor. Some terminal outlets originally cooperated harmoniously, but due to the failure of new product promotion, they are occupied by large quantities of products that do not sell, causing terminal aversion and subsequent return waves. Distributors naturally are unwilling to accept returns, ultimately leading to the breakdown of cooperative relationships with terminals. Therefore, many distributors have fewer and fewer outlets because of terminal damage caused by these reasons; as terminal outlets decrease, the distributor's path narrows. In fact, the economy is macro; in this era of economic downturn, difficulty in moving sales is a problem faced at every link. But the macro environment only determines the direction of enterprise development and does not bring direct value; what directly creates value is specific micro actions. In this macro context, many distributors still see increasing sales because they do meticulous micro work. Therefore, in understanding terminals, distributors must have a clear understanding.