Stock pressure is a required course for sales personnel, and it is almost a habitual action for every manufacturer before the peak season or when launching new products. Many rush across the single-plank bridge of stock pressure, some emerge with bright prospects, while others end up with a mess. In cases where people fall off the bridge, we often see either over-pressuring leading to warehouse overflow, poor techniques causing failure, or mistimed seasons leading to expiration...
What is stock pressure? Simply distributing goods to the terminal is stock pressure! Some might say: Wrong! Distributing goods into consumers' hands, homes, mouths, stomachs, and even minds is called distribution! Not only into minds, but also "registered" in minds! I can only reply: Keep bluffing!
I: Blind Spots in Stock Pressure Actions Who performs stock pressure actions? Only manufacturers or channel members! Whether stock pressure is effective depends on whether the actions are solid. Stock pressure is like a martial arts routine; to defeat the opponent, you must chain moves, each lethal!
1: Distributor Stock Pressure: Inform the distributor of the promotional policy, or hand over the stock pressure costs to the distributor, who then organizes personnel to scatter goods everywhere. Blind Spot: Distributor stock pressure is a matter of conscience. If the distributor is tempted by profit, intercepting or altering promotional costs is almost effortless. Some distributors also use large funds to hoard stock, selling at high prices after the activity ends! Moreover, most distributors are used to "rough work," often pressuring large but not small, leading to leaks, omissions, and even sacrificing price and order for stock pressure. For example, many liquor distributors, after receiving stock pressure costs, basically hold ordering meetings and collect advance payments. Then they dump goods to secondary wholesalers, caring only about shipping, not selling, since payment is already in hand! This leads to chaos among secondary wholesalers: some pay more, get more goods, and sell longer; others sell shorter. For instance, Zhang San's advance payment is sold out by March, while Li Si's larger payment allows selling until Mid-Autumn Festival. Zhang San can only watch his livelihood disappear in April because Li Si still enjoys the advance payment policy, and Zhang San has no price advantage! This uneven situation not only causes channel chaos but also leads to a proliferation of short-lived products. That is, collecting payment once and changing products each time, often just changing the packaging without changing the content, ultimately leading to consumer distrust!
2: Order Stock Pressure: In markets with branch offices and route visits, order stock pressure relies on sales reps visiting to take orders, then handing them to distributors for delivery. Blind Spot: Order closure is just the beginning; order tracking is a problem supervisors must never relax. Often, due to attractive stock pressure policies, a day's orders may reach a dozen or more, leading assistants to only place orders without managing them! That is, they only send orders to distributors, ignoring whether they are fulfilled! After receiving orders, distributors face delivery pressure, running around in circles, forgetting some orders, unable to find locations, having orders rejected upon delivery, or even encountering fake orders!
3: Accompanying Vehicle Stock Pressure: Manufacturer sales personnel accompany distributor vehicles for distribution. This can partially solve the above drawbacks. Advantages include not only supervising the implementation of distributor stock pressure policies but also strengthening the pressure force; appearing in the manufacturer's name increases the closing rate. Blind Spot: Accompanying vehicle stock pressure can yield quick results short-term, but over time, it wastes resources and leads to visit fatigue, such as insufficient visit efficiency and loose discipline among sales personnel. Additionally, accompanying vehicle stock pressure must involve immediate transaction and unloading; orders cannot replace stock pressure. Because sales reps, to meet stock pressure quotas, are unwilling to act as loaders; a single order is easier. Moreover, placing extra orders is rarely noticed, helping distributors extract more stock pressure costs for face, or even earning a lunch.
4: Blitz Stock Pressure: Also known as shock team stock pressure or violent stock pressure. That is, concentrating sales personnel in groups of two or three with vehicles for distribution. Characteristics: imposing momentum, clear division of labor, with stock pressure and merchandising, collection and handling each with distinct responsibilities. This is a "concentrate superior forces to annihilate the enemy" approach, easily delivering heavy blows to competitors in the short term and locally. Blind Spot: Blitz stock pressure is only suitable for local, short-term use! Because even a team of 3-5 people, to blitz an urban area, even 5 groups would take nearly a week. A group can only blitz about 40 stores a day, while a county town has no fewer than 1000 outlets. Thus, it is time-consuming, labor-intensive, and costly! It is a "signature move" not to be used lightly!
Each of the four stock pressure actions has blind spots, but not every action can be used universally, win with one move, or be repeated hundreds of times! Instead, they must be combined and varied, using different actions in different environments to form complementary combinations, gradually eliminating blind spots!
Key Points: 1: Tighten the ranks! Soldiers must be strong and horses sturdy. Whether distributor personnel or manufacturer staff, strict discipline must ensure stock pressure efficiency during the period. Many small and medium distributors use a mixed business team model, where two or three people handle all products—white spirits, beer, food, beverages—leading to situations where when beer peak season arrives, the team drops white spirits, and when white spirits peak, they drop beer. This causes the market to be like "cutting leeks" season after season, like weeds: sprouting in spring, yellowing in autumn, and vanishing in winter! The market repeats year after year, opening and losing!
2: Act at the right time; different environments and backgrounds require different stock pressure methods! Different stock pressure actions have different characteristics. For example, distributor stock pressure excels in closing rates and distribution accuracy because distributors have strong relationships in their customer areas. However, for newly opened areas, distributors may not be more professional than manufacturer sales personnel, so consider the "accompanying vehicle stock pressure" model. Once accompanying vehicle stock pressure reaches a certain level, consider transferring outlets to manufacturer sales reps for periodic visits and maintenance.
II: Blind Spots in Stock Pressure Promotions: Promotions are like medicine! Don't take when not sick, and don't overdo when sick; overuse has side effects and can harm health! Everything has its counterpart; there is no invincible "promotion"; all "promotions" have antidotes!
1: "Promotion Dependence." Long-term stock pressure policies can lead to terminal promotion fatigue or dependence. For example, an original stock pressure policy of buy 10 get 1 free for one month leads terminals to believe it's the norm. No promotion, no stocking—this is promotion dependence.
2: "Promotion Fatigue." Stock pressure after stock pressure: "How much is your beer?" the hotel owner shouts: "Last month buy 10 get 1, this month buy 30 get 2, today buy 40 get 3, my warehouse is full! Even buy 1 get 1, I don't want it!" "It's so cold, I can't sell half a case a day; even if you give it free, I have no place to store it!" When terminal owners are "unmoved" by promotions, promotion fatigue sets in! Due to seasonal reasons or low hit rates, outlet owners lack confidence. Coupled with continuous promotion upgrades under sales pressure, terminals become numb, viewing promotions not as benefits but as burdens!
3: "Promotion Resonance." The so-called "promotion resonance" is when this stock pressure policy is buy 20 get 1, after half a month, another stock pressure activity follows, and buy 20 get 1 fails, forcing a buy 10 get 1 policy, then next activity becomes buy 5 get 1... Footstep resonance can collapse a bridge! Promotion resonance will inevitably penetrate the product price system. Promotion dependence can be "quit," promotion fatigue can be "avoided," but once entering the promotion resonance stage, price systems will bottom out, channels will be chaotic, and if combined with single-product operations without timely new product rotation to rest and nurture the channel, it often leads to disasters and irreparable damage!
For sales personnel, their duty is to complete sales. In completing sales, promotions and sales almost form a seesaw: headquarters demands sales, I demand promotions from headquarters! Give me enough promotions, and I can lift the Earth!
Case: A beer company, to quickly open a strategic market, used a "win another bottle" method with a 100% win rate, aiming to sweep the battlefield! The first week, distribution was lightning-fast and unstoppable! The second and third weeks, sales surged! Even scenes of thousands of households scrambling to buy occurred. One day, the market supervisor looked at the river in the city center filled with white foam and wept! It turned out the whole city was opening bottle caps, pouring the beer down drains, then exchanging caps for prizes, and opening the new bottles... It turned out a beer bottle could be sold for 0.3 yuan!
Self-Check: 1: Are you prioritizing sales and old products? Selling old products means less effort and less thinking for sales personnel. Catch a few seasonal turning points, run promotions, and the year's harvest is done. Sales achievement is the first indicator manufacturers track; without sales, any marketing action is impossible! In sales-first markets, we often see price bottoming and channel chaos. Sales personnel generally have inertial thinking: if you want sales, give me promotions! Old products are the foundation for "channel protection," while new products are the "channel maintenance" masterstroke. Old products sell well but don't make money; transparent prices not only trouble companies but also frustrate distributors!
2: Does the stock pressure policy exceed one week? Have consecutive stock pressures exceeded three times? Stock pressure should be short, flat, and fast; the longer the battle line, the bigger the problems.
3: Dare to raise prices when the peak season comes? Stock pressure is usually done before the peak season. After large-scale stock pressure, competitors are suppressed in corners, and the market situation is firmly in your control. When the peak season arrives, the price damage caused by stock pressure needs time to recover. At this point, not only should stock pressure policies stop, but basic promotions should also be adjusted upward, even considering price increases. Otherwise, channel members facing increasingly heavy delivery tasks may rebel if they can't "eat meat and drink soup"!
4: Is new product follow-up timely? Many believe the success of a new product launch depends on consumer acceptance! But as marketing personnel, you absolutely cannot use consumer acceptance as an excuse. I don't think the purpose of a new product launch is to cater to consumer needs; half the purpose is to cover the thin profit margins of old products in the channel, giving them breathing room. The other half is to provide opportunities to squeeze competitors at the terminal.
III: Blind Spots in Stock Pressure Price Systems: Don't be superstitious about brands; brands are just legends! Brands without price system order lack channel foundation; they are castles in the air!
1: Regional Price Chaos. Especially in mature or semi-mature markets, due to product popularity, distribution system sales often exceed distributor direct supply sales. After receiving stock pressure policies, distributors pass them to sub-distributors, who, to fully utilize stock pressure promotional resources to grab sales and profits, will distribute to as many outlets as possible. After covering existing outlets, they look at other sub-distributors' areas and engage in cross-regional dumping. Initially, they secretly deliver a little, but over time, they pass on stock pressure policies and dump goods at low prices.
2: Naked Price Shipment. Stock pressure policies are generally greater than regular promotions, basically a model of regular promotion + stock pressure policy. For example, regular policy is buy 10 get 1, stock pressure policy is buy 50 get 3. Then the entire promotion becomes buy 50 get 8. Distributors simply remove the gifts, convert them to cash, and ship at naked prices. Others sell at 18 yuan per piece, with buy 50 get 8; I'll simply ship at 15.5 yuan per piece. Break it into smaller orders, and still deliver! They even have excuses for manufacturer personnel: "One-time unloading of 50 pieces is too much; the outlet can't handle it. I'll deliver less each time and make more trips!"
3: Cross-Dumping and Channel Conflict. Combating cross-dumping is a headache for many manufacturer sales personnel. Just as the market starts to rise, goods from other regions flood in, often like autumn wind sweeping leaves, with huge destructive power!
Solutions: Self-Check: 1: Is there a sub-distributor management system? Sub-distributors are a love-hate role for manufacturers, but for some types of FMCG companies, they are an indispensable "adversary." Especially in third- and fourth-tier markets with special channel structures, sub-distributors' agility and pervasive delivery capabilities contribute greatly to manufacturers. However, sub-distributors are often "non-partisan" individuals, unconstrained and free-spirited. If not managed well, they pose a great threat to price systems and channel order. If these "Monkey King" characters are not given a tight band, without strict sub-distributor management systems, they will not only go up to heaven and down to earth but also stir up seas and rivers, causing chaos!
2: Is there regional or outlet division? A hotel receives delivery at 20 yuan per piece, and Boss Zhang has delivered for years. Boss Li delivers at 19.5 yuan per piece, leading to local war, not only between Zhang and Li but also the hotel owner joining in, cursing Zhang for being unfair and making black money! Therefore, when managing the market, clarify the delivery ownership of a specific region or outlet, ensuring exclusive delivery, and avoid having two or three companies delivering to the same region or outlet. This not only prevents price chaos but also allows monitoring and punishment of price-dumping sub-distributors!
3: Is there sub-distributor rebate management? A shallow understanding of sub-distributor rebate management might see it as a means to "trap" sub-distributors and prevent defection. But if handled well, sub-distributor rebates are actually an effective lever for market control. They can control not only the "quantity" but also the "quality" of sub-distributors! Quantity is sales volume; quality is price system, region, and even product appearance! Used skillfully, it becomes the "tight band" on these "clever monkeys"!
4: Is there a product batch number traceability process? A sub-distributor delivers goods at low prices to another region or outlet, is reported, and when manufacturer personnel inspect, the sub-distributor denies it. Manufacturer personnel can only trace the batch number to a first-tier distributor in that region, but cannot trace which sub-distributor received the goods. Then disputes arise, often ending unresolved! Secondary batch number registration management by distributors is an essential step. Without this guarantee, we can only trace product batch numbers in large regions, but are helpless against cross-dumping in small areas!
IV: Blind Spots in Stock Pressure Channels: Channels are the present; brands are the future! Do you choose the present or the future? Grasp the present to have a future! Grasp channels to have brands!
1: Multi-Level Channels. The more channel levels, the harder management. The optimal level for beer channels should not exceed three: first-tier, second-tier, and outlets. Once a third-level wholesale forms below the second tier, the entire market price system becomes chaotic. The reason is that third-tier wholesalers basically form without management; they chase profits like flies drawn to blood.
2: Unorganized Channels. So-called unorganized channels are naturally formed second-tier wholesalers. First-tier ships at naked prices, second-tier distributes freely, relying entirely on hit rates to support the market and old products to win. It's a completely undisciplined army, swarming to distribute, slashing prices in a mess, blaming and cursing each other, even fighting over outlets.
3: Mixed Channels. An excellent brand will inevitably bring up a large number of excellent channel partners. When a brand's local market matures, the first to mature may not be consumers but definitely the channel! That is, channel maturity supports a locally mature market, especially for second-tier brands. In other words, when a local market matures to a certain extent, a situation arises where "no grass grows under a big tree," meaning competitor channels are suppressed by the strong channel of this product, just as another big tree cannot grow under a thriving one. For competitors to enter this mature market, the fastest way is to borrow the mature channel of this product. If during stock pressure, channel members of this product take on competitor goods, a mixed channel forms. Once a mixed channel forms, especially in strong areas of this product, quick self-check and rectification are essential!
Self-Check: 1: Do you know your channel levels? Which level can you control? When starting a new market with new products, finding a sub-distributor is difficult. Once products become popular, sub-distributors flock in! Facing a swarm of second- and third-tier wholesalers, you must keep a clear head. Not everyone can join the team; they must follow the "Three Great Disciplines and Eight Points for Attention." Once rules are set, those with different paths cannot work together!
2: Why do second-tier wholesalers dare to slash prices? Those who dare to slash prices may be bold, but they must have a reason to take the risk. There are high-voltage lines, but only "lines" without "electricity"! These clever monkeys will swarm once they taste sweetness, because whoever slashes slowly loses out. After slashing, everyone stops selling and goes to another manufacturer! Therefore, second-tier wholesalers dare to slash prices mostly because manufacturer management is weak, making them "unafraid," and then "unrepentant" after slashing!
3: The reason channel partners take on competitor goods is definitely loss of confidence in this product! What makes channel partners lose confidence? Slashing prices is not the nature of second-tier wholesalers! They also hope to follow a disciplined army to conquer territory, with clear rewards and punishments, fair distribution, and everyone earning peacefully. When second-tier wholesalers see a chaotic army with unclear rewards and punishments, fighting over food, even using knives and guns, sweating and bleeding, they will definitely seek to leave and find their light!
Bio: Fang Gang, researcher at the China Dealer Development Research Center, well-known practical marketing expert in the FMCG industry, gold medal lecturer at the China Marketing Training Institute (under Sales and Marketing magazine), and contributing writer for several well-known media outlets.
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