Returns occur with any product, and there are various reasons for them: one is due to product quality issues, and the other is due to market reasons. The main market-related reasons for returns are as follows:
Returns due to poor sales efforts. When new products arrive at the warehouse, if there is no strict requirement for sales staff to distribute them, or if there is a requirement but not enough attention is paid, thinking that new product promotion is difficult, sales volume is small, time-consuming and laborious, and not worth the effort, the boss and salespeople may develop a fear of difficulties and be unwilling to actively promote new products. This leads to slower and slower distribution of new products, and eventually, no one distributes them. Over time, when new products become near-expiry, the boss starts to worry and finds various excuses to demand returns.
Returns from secondary wholesalers. Secondary wholesalers often sell a variety of products, and due to the large number of products, they may neglect warehouse management, not following the first-in-first-out principle, or rarely taking inventory. When they discover near-expiry products at the bottom of the warehouse that cannot be sold, they request the distributor to accept returns or exchanges. If the distributor refuses, it may damage the relationship or even lose the customer; if they accept, the distributor suffers unnecessary losses.
Returns from retail stores. Whether it's KA stores or small retail shops, near-expiry products can appear from time to time. The main reason is that sales staff do not maintain and follow up properly, leading to near-expiry products. For example, not following planned routes for periodic visits, skipping stores, or missing stores; some stores that are not maintained for a long time are prone to near-expiry products. Also, store owners or staff may not have the awareness to manage products on a first-in-first-out basis, and if our sales staff do not pay attention or fail to notice and regularly tidy the shelves, then retail stores are more likely to have near-expiry products. Additionally, during holidays, overstocking can lead to returns from supermarkets. Regardless of the cause of near-expiry products, distributors must resolve them for retail stores.
Therefore, effectively controlling and avoiding near-expiry products in the market is a very important task in our daily market management. If this task is managed well, it will positively promote the healthy development of the market for both manufacturers and distributors; if not managed well, it will harm not only the manufacturer and brand but also the distributor.
So, how can we effectively control and avoid this?
Require secondary wholesalers and retail stores to strictly manage product inventory and shelf displays according to the first-in-first-out principle. Our sales staff should not only understand this themselves but also make the owners and staff of secondary wholesalers and retail stores understand it. Moreover, they should help them develop a habit of consciously managing inventory and ensuring safe stock levels.
When new products arrive at the warehouse, they must be distributed to retail stores as quickly as possible, generally within one week. After distribution, sales staff must ensure attractive displays in each store. Only then can new products move and generate sales. Otherwise, new products will only sit in the warehouse, and retail stores won't see them. It's easy to imagine what the outcome would be. Therefore, the faster the new product distribution, the higher the store coverage rate, and the more beneficial it is for the growth of new products.
When products are two to three months away from their expiry date, concentrate them in local supermarkets with good sales performance and use special prices or other promotional methods to clear them at once, greatly reducing the possibility of returns.
When sales staff visit customers daily, in addition to specifying areas, performance targets, visit routes, number of visits, number of transactions, and minimum transaction volume per store, they should also be assessed on attractive displays. The prerequisite for good displays is to always know the customer's inventory. Therefore, the first thing sales staff should do when visiting a customer is to check their inventory. The benefits of checking inventory are: first, to avoid old stock; second, to prevent stockouts; third, to expand display space; and fourth, to increase sales. As long as our sales staff do their work meticulously and maintain and serve the market well, the problem of near-expiry products at secondary wholesalers and retail stores can be easily solved.
Therefore, market returns can be completely controlled and avoided, depending on the responsibility of our sales staff and their control and execution in the market on a daily basis.
Source: Huangpu Training Camp