Warm reminder: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management.
In the rapidly developing circulation industry, due to many irregularities in the market, distributors and agents (hereinafter collectively referred to as 'distributors') often encounter bottlenecks after experiencing rapid growth. Let's use the personal experience of a regional distributor of a leading product to understand this industry-wide issue.
Protagonist: Mr. Wang, a distributor in City D, Guangdong Agency Brand: Domestic leading beer brand Q Agency Region: All channels in City D
Mr. Wang has been in the food distribution industry in City D for many years, but he finds that the business is becoming increasingly tiring. Before 2003, suppliers would deliver goods on credit and even give distributors a certain credit period, while the terminal customers he served paid in full upon delivery. It was precisely because of this favorable environment in the early days that Mr. Wang's business grew larger and his company improved. However, after 2003, the market environment underwent fundamental changes: upstream suppliers required payment before shipment, while downstream terminal customers demanded credit periods. In recent years, the environment has become even harsher, as Mr. Wang has realized that at the end of the year, all his profits have turned into manufacturer expenses. In other words, if the manufacturer's expenses are not reimbursed in full and on time, he would have worked for nothing for the whole year, effectively working for free for Q brand.
We have analyzed Mr. Wang's company and identified the following problems:
1. Staffing vs. Sales Ratio Issue That is, the company's per capita labor productivity is problematic. There is no effective integration of resources to improve work efficiency. Many company owners believe that if they had 10 people selling 10 million last year, and this year they want to achieve 20 million, they should have nearly 20 people. This is a serious misunderstanding, leading to bloated departments, low efficiency, and slow work processes.
2. Lack of a Standardized Business Process Suitable for the Enterprise Mr. Wang's annual sales are nearly 300 million, which places his company among the larger enterprises in the food distribution industry. However, the company uses two general-purpose systems, both based on tax and financial standards. As a result, the data the boss sees is all processed by the finance department, and there are significant coordination issues between departments. For example, when there is a customer price change promotion, the finance department only learns about it during reconciliation with the customer. The seriousness of this problem is clear to everyone, and it may even be happening in your company.
3. Poor Management of Manufacturer Conditional Rewards and Rebates There is no rigorous management for the filing, occurrence, and reimbursement of manufacturer expenses. All records are kept manually by finance, and they cannot be integrated with other business data. This often leads to unclear accounts and inadequate tracking.
4. Price Management Mechanism is Ineffective Mr. Wang's company has a price review process, but the actual result shows that the reviewers do not seriously review or have no basis for review, making the review a mere formality.
5. Chaotic Warehouse Management The company's internal inventory data, due to the use of the original general-purpose system for outbound and accounts receivable generation, lacks a professional receipt acceptance process, leading to inventory data errors.
6. Unscientific Logistics Vehicle Scheduling Since the original system lacks a transportation scheduling function, vehicle scheduling can only be done manually. If the scheduler is an experienced employee, it's fine, but with personnel changes, new schedulers may cause logistics waste and fail to utilize the company's logistics resources effectively.
7. Lack of Effective Departmental Profit Center Assessment Mr. Wang's company is divided into several departments based on brand and system channels, but there is no effective departmental profit center assessment system, resulting in weak work motivation across departments.
I believe many distributor friends' companies will more or less have similar problems to Mr. Wang's. Through the solutions we proposed, Mr. Wang quickly resolved the above issues. If you also encounter such problems and find them difficult to solve, you can join our QQ group 344257092 to consult our distributor management experts on how to resolve them.
Like this article? Feel free to click the top right corner to share it to your Moments;
About us: WeChat Name: FMCG Distributor Professional Consulting Management Account Introduction: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal management: