---
title: "Can Distributors Still Increase Sales by Adding More People and Vehicles?"
description: "In the FMCG industry, sales managers generally know that the most direct way to increase a distributor's sales is through promotional stock-piling and adding more people and vehicles. By stock-piling, distributors are forced to sell at low prices to quickly recover capital, while adding more people and vehicles, even dedicated personnel and vehicles for specific products, enhances terminal sales and service capabilities, driving sales growth. For distributors with sales below 20 million yuan, adding people and vehicles, if managed well, can lead to significant regional sales growth, mainly because their channel power is not fully released and requires more people and vehicles to achieve saturated market coverage. This type of growth driven by increasing hardware (people/vehicles) is called \"quantitative growth.\" However, when sales reach 20-30 million yuan, most distributors find that despite following the manufacturer's requirements to add people and vehicles, sales growth is not obvious, costs rise, and profits decline or even turn to losses."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-11-19"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/can-distributors-still-increase-sales-by-adding-more-people-and-vehicles-59dfb3ce.md"
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# Can Distributors Still Increase Sales by Adding More People and Vehicles?

> In the FMCG industry, sales managers generally know that the most direct way to increase a distributor's sales is through promotional stock-piling and adding more people and vehicles. By stock-piling, distributors are forced to sell at low prices to quickly recover capital, while adding more people and vehicles, even dedicated personnel and vehicles for specific products, enhances terminal sales and service capabilities, driving sales growth. For distributors with sales below 20 million yuan, adding people and vehicles, if managed well, can lead to significant regional sales growth, mainly because their channel power is not fully released and requires more people and vehicles to achieve saturated market coverage. This type of growth driven by increasing hardware (people/vehicles) is called "quantitative growth." However, when sales reach 20-30 million yuan, most distributors find that despite following the manufacturer's requirements to add people and vehicles, sales growth is not obvious, costs rise, and profits decline or even turn to losses.

> In the FMCG industry, sales managers generally have an experience: to increase a distributor's sales, the most direct way is promotional stock-piling and adding more people and vehicles. Through stock-piling, distributors, in order to quickly recover capital, will sell goods at low prices through promotions. Adding more people and vehicles, even dedicated personnel and vehicles for specific products, enhances terminal sales and service capabilities, achieving sales growth.

**For distributors with sales below 20 million yuan**, adding people and vehicles, if managed well, can lead to very obvious sales growth in the regional market. This is mainly because the distributor's channel power is not fully released, and it is necessary to increase a certain number of people and vehicles to achieve saturated market coverage. This type of sales growth driven by increasing hardware (people/vehicles) is called "quantitative growth."

**But when sales reach 20-30 million yuan**, most distributors feel that the manufacturer's tasks are pressing, and they are constantly stock-piling, with promotional efforts increasing, yet completing tasks is very difficult, and returns are increasing. Although they add people and vehicles according to the manufacturer's requirements, sales growth is not obvious, costs rise, and profits continue to decline, even leading to losses.

In fact, there is a problem in the logic of adding people and vehicles to increase sales: sales are affected by **market capacity and outlet quality**. When regional market sales approach their peak, the return on investment diminishes. When hardware increases to a certain extent, its effect on sales growth gradually decreases. Distributors generally see growth stagnate between 20-30 million yuan, which is actually the manifestation of the law of diminishing returns. At this point, relying on hardware investment can no longer drive sales growth.

Additionally, at this stage, distributors face the following realities if they want to grow sales: First, the dividend period of rapid growth in Chinese consumer goods has passed, and there will no longer be incremental markets to meet the manufacturer's ever-increasing sales tasks. Second, limited by brand power and regional market population capacity, a single brand will stagnate after reaching a certain sales volume. Third, the distributor's own capital, ideological awareness, and management capabilities have reached their limits. If they exceed the distributor's management capabilities, adding more people and vehicles will lead to management lag, cost increases, and market loss of control. **Once a distributor's sales scale reaches 20-30 million yuan, they basically hit the ceiling.** It becomes difficult to make major breakthroughs in regional market sales growth, and it is also hard to improve operational efficiency through good organizational management.

**At this stage, distributors have the highest operating costs and the lowest operational efficiency among all scales, and it is also the stage where transformation and change are most needed.**

A distributor in Jilin, Mr. Yuan, said a very insightful sentence: If distributors continue to do agency business in the original way, they will either be forced to death by the manufacturer or by the market. In the next few years, distributors will definitely have more ways to die than to survive. If they do not change their thinking, it will definitely not work.

> **Under internal and external troubles,**
>
> **If distributors still want to continue developing,**
>
> **How should they transform?**

When adding people and vehicles can no longer achieve sales growth, to grow further, it is necessary to change the growth model, **from quantitative growth to efficiency-driven growth**, and enterprises must also **shift from capital accumulation to technological innovation.**

Technological innovation has a prerequisite: distributors must complete a certain amount of capital accumulation. Only distributors with a certain sales scale and financial strength can achieve secondary growth through technological innovation.

**Technological innovation is divided into three levels: 1) Introducing advanced management methods; 2) Introducing advanced technical means; 3) Reconstructing their own business model.**

1) Introducing advanced management methods: Undoubtedly, the original sales management system can no longer adapt to large teams and large-scale sales growth. At this time, it is necessary to introduce scientific management standards, through refined management, to standardize and rectify the distributor's own organizational structure, business processes, and management systems, thereby achieving operational efficiency improvement driven by management.

2) Introducing advanced technical means: Through professional management software and equipment, complete internal informatization construction, and through the combination of management + technology, greatly improve the company's business, management, and operational efficiency, reduce operating costs. There are many ways to innovate technical means, such as warehousing, logistics, ordering, finance, field management, etc., all of which are effective means to improve efficiency through technology.

3) Reconstructing the business model: In the Internet era, the influence of online on offline is increasing. Especially in the past two years, giants like JD.com and Alibaba have entered the traditional supply and distribution field, using advanced technology and business models to transform it. The impact of Internet thinking on the traditional supply and distribution field cannot be underestimated.

Internet giants achieve high-efficiency and large-scale sales through new business models: B2B, B2C, O2O. For example, they restructure backend warehousing and distribution business processes (BPR), supported by order management systems (OMS)/warehouse management systems (WMS)/transportation management systems (TMS), big data analysis, and supply chain finance to achieve large-scale transactions of multiple brands/categories, and then use unified warehousing and distribution for high-efficiency and low-cost delivery.

But B2B is not exclusive to giants. In regional markets, distributors have more advantages than these giants, and if distributors' existing stock can be adjusted through a series of technical and management changes, they can also evolve into new commercial entities, just like some "sitting merchants" in wholesale markets transformed into "traveling merchants" in the past, using more advanced technical means and higher efficiency to achieve secondary growth.

> At this stage, the era when distributors can rely on adding people and vehicles to push goods to channels to achieve sales growth is over. But the distributor industry will not die out; it will exist in a more efficient, newer business model, and more competitive way. In the future, market competition will become increasingly fierce. Some distributors will inevitably be eliminated because they cannot adapt to this era, while some distributors will truly transform and come ashore during this market ebb, evolving from fighting alone to alliances, division of labor, and collaboration, evolving into new and more powerful commercial species.

**Extended Reading:**

-END-

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