The COVID-19 pandemic has entered its third year of recurrence, seemingly endless. Since mid-March, outbreaks have again ravaged various regions, affecting nearly 30 provinces. From Shenzhen and Guangzhou to Jilin and Shanghai, and now to Beijing and Zhengzhou, sporadic outbreaks have disrupted normal operations in many areas.
In this normalized pandemic environment, distributors' businesses are facing severe tests. Market disruptions, declining sales, inventory backlogs—a series of issues need urgent solutions.
However, due to a lack of good experience sharing, many distributors cannot find effective methods and strategies when facing these problems, resulting in severe business damage.
To this end, New Distribution has launched the "Growth Amid the Battle Against the Pandemic" live streaming series, uncovering excellent distributor cases of counter-trend growth during the pandemic, summarizing experiences and methods, and empowering distributor partners to find direction amid the pandemic.
This is the first article in the series. We summarize experiences and methods from six aspects, hoping to inspire distributor partners.
****Prepare Materials in Advance, Apply for Livelihood Guarantee Initially, people thought COVID-19 was a one-off event that would pass if we waited. But after three years, distributors should understand that the pandemic is a long-term abnormal state.
If they still maintain a wait-and-see mentality, declining business is inevitable. Even if their region has not yet seen outbreaks, distributors should prepare in advance.
First, distributors should understand local pandemic policies, prepare various materials according to government guarantee requirements, complete procedural filings, and apply to enter the government's livelihood guarantee list.
Generally, daily necessities can enter the guarantee list through normal procedures. If the products a distributor represents are not daily necessities, they can organize daily necessities through channel resources and form product combinations with existing products.
Second, comply with local epidemic prevention department requirements, prepare protective and disinfection supplies, keep records of employee disinfection and daily nucleic acid tests, and screen risks.
Once on the guarantee list, it is equivalent to having government support. Even if outbreaks occur in the region and closed management is implemented, distributors can still deliver goods normally, and the basic business will not be lost.
The norm is long-term. Distributors should treat the pandemic as a long-term matter, prepare in advance, and be prepared for any eventuality.
****Multi-Warehouse Layout, Inventory Forward Deployment Epidemic spread often involves multiple points. If a distributor's warehouse happens to be in the epicenter, and warehousing cannot operate normally, the entire sales system may face paralysis.
In this situation, a better response is to avoid potential risks through a multi-warehouse layout.
For example, in Beijing, if a warehouse in Chaoyang District cannot ship due to the pandemic, warehouses in Dongcheng and Tongzhou Districts can still operate normally, so overall sales will not be greatly affected.
In addition to multi-warehouse layout, prepare for inventory forward deployment to meet market supply.
Omicron is highly transmissible. Sporadic outbreaks, if not detected in time, can easily spread within a very short time. Once an outbreak occurs, there may be traffic controls on some railways and highways, making vehicle passage difficult.
Therefore, when signs of an outbreak appear, distributors should forward-deploy inventory at multiples of normal levels. Even if traffic controls occur, warehouse inventory will be sufficient for market supply, avoiding stockouts.
For example, if you normally keep 10 days of inventory, in special times you can keep 30 or even 45 days.
****Increase Category Breadth, Expand Channel Reach During the pandemic, especially from the issuance of lockdown notices to the implementation of lockdowns, consumers have a strong hoarding mentality. For distributors, this period is an excellent sales opportunity.
Consumers hoard goods, usually with multi-category needs. For single and non-high-frequency consumption categories, consumers have relatively lower purchase motivation.
In this situation, multi-category operation is advantageous for distributors. For example, they can sell through product combinations, bundling, cross-selling, or in the form of large gift packages. Under the influence of consumers' hoarding psychology, results are often better.
This is from the product dimension, multi-category operation. On the other hand, from the channel perspective, distributors should do omni-channel operations and multi-point touch.
Everyone knows that the pandemic has dealt a fatal blow to some channels. For example, catering: once lockdowns occur, sales in the catering channel drop sharply, including traditional circulation channels; regional lockdowns also have a huge impact.
So, where to make up for these lost sales?
From channels with growth. During the pandemic, sales in some channels will surge, and distributors must seize them, such as community group buying, fresh food e-commerce, O2O home delivery, etc.
In a normalized pandemic environment, we should take a long-term view and increase channel breadth. "Don't put all eggs in one basket." Distributors should understand this principle and actively expand channels that will see sales growth during the pandemic before outbreaks occur.
****Business-Centric, All Hands on Deck The pandemic tests not only distributors but also their teams. Whether a team can fight hard battles is most evident in crises.
For distributors, a major challenge during the pandemic is that when it hits, especially when their area is under control, some employees may develop fear, not daring to act, or even spread negative energy.
This phenomenon can be very damaging. Once negative psychology spreads, it is hard for the team to form combat effectiveness.
So, in special times, do not be soft on such employees. "Soldiers who dare not go to the battlefield" only demoralize the team; distributors should remove them promptly.
During the pandemic, it is like a wartime state; the entire team must be ready to fight at any time. Salespeople, drivers, finance, clerks, back-office staff, warehouse keepers, etc., form a temporary "wartime team," all devoted to battle, with the sole purpose of picking and delivering goods.
Some distributors may wonder: what if clerks and finance don't understand business processes?
Here, the distributor's usual team management ability is reflected. Distributors can establish an internal management system where all non-business positions, such as back-office, clerks, and finance, must work one day a week in the warehouse.
What do they do on duty? First, accompany drivers on deliveries; second, familiarize themselves with all warehouse-related processes.
Through such long-term standardized practice, the team's collaborative combat capability becomes very strong. During the pandemic, the "wartime team" can execute all actions in an orderly manner, ensuring all orders are fulfilled in a timely manner during special times.
****Data-Driven, Fine Management During the pandemic, business is sluggish. Some distributors want to increase revenue and reduce costs. Since business is not going well, why keep so many people? Fire a few employees.
But in fact, firing two employees saves at most 10,000 to 20,000 yuan a month. Is that the main cost?
Obviously not. For distributors, costs arise from operations and management; fine management is the key.
How to do fine management well?
The core is data application. Only when distributors know the source of every income and every expense can they adjust management models and organizational structures based on evidence.
Through data, squeeze money from "between the teeth"—distribution, warehousing, transportation, logistics, and manufacturer fee usage. Only after saving from each link can it be converted into profit.
Fine management is also a process of teamwork. The "saved" money should not only go into the boss's pocket; it should be shared with the team, so employees will be more motivated to support you.
How to share?
With data, analyze from multiple dimensions such as labor efficiency, output ratio, process execution indicators, etc., and distribute money fairly.
There is a viewpoint worth considering: when your employees' wages are 20% higher than local peers, are you still worried they won't work hard?
When fine management is done well, employees know how to make money. Then, when the pandemic eases, distributors can fully leverage their capabilities, and your team can match sales growth of 1.5, 2, 3, or even 4 times.
****Frontline Command, Boss Must Stay on the Frontline We always say that the pandemic is a crisis, and crisis and opportunity coexist. To seize this opportunity, distributors must lead by example and charge to the frontline.
As the leader of the entire team, the distributor boss must be the commander-in-chief when the pandemic begins.
Many excellent distributors have already stepped away from daily operations and management, focusing on strategy and tactics, and basically not participating in market sales, warehousing, and logistics.
But when the pandemic comes, distributors must step up and lead the overall situation. Especially in warehousing and logistics, which are extremely important during the pandemic, the boss should rush to the frontline of picking and delivering goods.
Think about it: at such a critical moment, if the boss is on the frontline, driving a forklift to pick goods and a truck to deliver, the team's morale will naturally rise, and efficiency will improve qualitatively.
In conclusion:
The pandemic has become a normalized phenomenon. Facing such an environment, distributors' "wait-and-see" attitude is wrong. "There is no off-season market, only off-season thinking." Only by actively taking action can distributors find the "opportunity" in the crisis.
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