---
title: "All Distributors Should Rebuild Their Terminal Operations Through Salary and Assessment Adjustments!"
description: "This article argues that a distributor's frontline salesperson compensation structure is the best indicator of their management capability and future prospects. It categorizes three common salary structures and explains how they reflect different business philosophies, ultimately advocating for a market-oriented approach that rewards market-building actions."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-07-20"
language: "en"
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---

# All Distributors Should Rebuild Their Terminal Operations Through Salary and Assessment Adjustments!

> This article argues that a distributor's frontline salesperson compensation structure is the best indicator of their management capability and future prospects. It categorizes three common salary structures and explains how they reflect different business philosophies, ultimately advocating for a market-oriented approach that rewards market-building actions.

********Click to read the original text for details********
Over the past period, many people have asked me how to evaluate a distributor's operational capability and management level, and how to determine whether a distributor has future development prospects.
My answer is simple: the core lies in **the salary structure of the distributor's frontline salespeople.**
In fact, the salary structure most directly reflects the distributor's business philosophy and operational capability. This article focuses on the salary assessment design for frontline salespeople to examine the distributor's management capabilities.
Looking at the salary structures of frontline salespeople across distributors, they can basically be divided into three categories:
** _1) Basic salary + sales commission_**
** _2) Basic salary + gross/net profit commission_**
** _3) Basic salary + sales/gross/net profit commission + performance assessment bonus_**
These three types of salary structure designs essentially correspond to three different business philosophies. Let's examine them one by one.
**01** **Basic salary + sales commission**
This type of salary structure basically belongs to the **"brand thinking"** . In the distributor's understanding, the market belongs to the brand owner, and the business is given by the brand owner. If the brand grows and succeeds, the distributor can benefit from it. The distributor's core tasks are payment, warehousing, distribution, customer relations, shelf placement, and related service support.
Regarding market building, display space grabbing, and promotion scheduling, in the distributor's perception, these are basically the responsibilities of the brand owner's regional sales team: if the brand owner wants to do well in the local market and increase market share, they must invest manpower and expenses, and they have their own plans and schemes.
Frankly speaking, **this type of distributor is still the mainstream in today's commercial circulation field. If they latch onto a fast-growing good brand, their business can grow big. At this point, the test for the distributor is their product selection vision.**
Of course, the problems of this type of distributor are also prominent. The product belongs to the brand owner, the market belongs to the brand owner, and even execution is done by the brand owner. As a commercial entity, what is the distributor's value?
In hindsight, distributors often complain about low product profits, heavy task pressure, and not making money. What is the reason behind this? Why should the brand owner let you make money? You provide a warehouse, capital, customer relations, and shelf stocking—which distributor doesn't have such services!
**02** **Basic salary + gross/net profit commission**
This type of salary structure belongs to the **"business thinking"** . The distributor focuses on gross profit and net profit, and at the same time, hopes that their salespeople will stand on the same side as the distributor. There are also variations of this salary structure, such as Amoeba management, contract systems, and partnership small-boss models.
The advantage of this salary assessment is that salespeople need to consider maximizing profit or gross profit, and the motivation to promote second- and third-tier brands is relatively stronger. Of course, it also faces problems: only focusing on selling in, not selling out, leading to widespread channel stuffing.
Previously, many distributors reported that they hoped to implement reforms through the Amoeba or contract system models to reflect the business philosophy of "more work, more pay" and "the capable get more," but unfortunately, they ended in failure. Even worse, such systems led to salespeople leaving to start their own businesses, which is not uncommon.
It's not wrong to hope that salespeople have a "business mindset" and "boss mindset." The problem is that salespeople are not bosses after all. They won't deeply think about how to do a market well, such as display space, location promotion, material posting, expense investment, etc. The only thing related to their interests is which product has higher gross profit, and they will push that one.
This leads to salespeople only taking from the market without giving back or doing solid market work: hanging a bottle tag can increase sales; increasing display space from 2 to 5 can increase sales; posting a poster can increase sales.
**A series of actions may take two to three months to show direct sales increases. The lag effect of actions producing results means that salespeople will not do solid market work.**
This is the key reason why many distributors fail when they adjust salary structures using Amoeba or contract systems. You only told salespeople to promote second- and third-tier brands or high-margin new products and not to spend expenses recklessly, but you didn't tell them how to do the market well.
**Market first, sales second. Even if you repeatedly emphasize to salespeople that only by doing good terminal displays can they have more sales, unfortunately, salespeople's behavior and actions will only follow the assessment, only follow what affects their income.**
**03** **Basic salary + sales/gross/net profit commission + performance assessment bonus**
This type of salary structure belongs to the **"market thinking"** . The performance assessment includes: new product store rewards, new product distribution rewards, store activity rewards, display space rewards, cut-case display rewards, hanging strip and poster rewards, etc.
It must be added that the assessment here is not the manufacturer's requirement, but the distributor's own initiative, designed based on their own business needs and market needs, as phased market-building projects.
Behind the design of market-building indicators, the distributor's business philosophy is: **sales are the result, actions are the cause. Today's sales are the result of yesterday's market actions.**
This month, a salesperson increased the SKU display space in 10 stores and did 2 quality ground promotions. In the distributor's understanding, this is valuable. The salesperson's value is not only in getting orders and sales but also in doing market actions. Doing 10 stores' SKU display space increases is valuable, so I reward you.
Looking back, when a distributor sets a performance assessment reward for frontline salespeople to increase SKU display space in 10 stores, rather than 10 product stack displays, the distributor must have professional judgment about the market. At this point, the distributor's starting point is based on market logic and product sell-through logic.
The distributor believes that if the market is done well, sales will naturally come!
Therefore, a complete salesperson salary assessment standard is as follows:
**Summary:**
I remember a distributor friend once shared a story with me. At that time, he was chatting with two friends, one was a distributor and the other was a manufacturer's manager. The distributor complained to the manufacturer's manager, saying, "Doing these first-tier brands only earns this little money, it's meaningless!"
The manufacturer's manager joked back, "Why should the brand let you earn so much? The brand is mine, the expenses are invested by me, the salespeople are supported by me, I negotiate the promotion slots, and I do the displays. You just provide a warehouse and capital. Why should you earn too much? There's no logic."
Yes, if the distributor's business philosophy relies on the manufacturer's brand, local accumulated customer relations, and capital strength, rather than grabbing store display shelves, grabbing store location promotions, and grabbing store promotion slot resources, why should they be able to sustain profits?
**Transform your market business philosophy, start with adjusting the salary structure of frontline salespeople, take the terminal seriously again, aim to grab store resources, use the salary assessment adjustment of frontline salespeople as the starting point, and do the market solidly!**
**Cover source | Tuchong Creative**
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