Friendly reminder: Click the blue text above “快消品经销商专业咨询” to learn more about marketing and distributor internal management.
As mentioned in the previous two articles, since channel stuffing is necessary, why do some companies collapse because of it while others seem to thrive? My former boss asked me more than once: "Huang Runlin, aren't you afraid of bursting the channel by stuffing it every month?" I remember my most powerful answer was: "Because we stuff every month, if it were going to burst, it would have burst long ago!" Although this is a狡辩 (quibble) that finds reasons from results, behind this reason, we have been trying to solve the following three problems.
Who to stuff? Don't let those big players with wholesale capabilities go. Generally speaking, provincial distributors in all industries, especially exclusive distributors, and even municipal distributors, as long as their sales exceed ten million, are basically corporate-operated. The more formal ones will have inventory management systems and customer management systems. They watch their warehouses more closely than their wives. So, whether it's exchanging promotional resources for purchases or market support for purchases, just do it boldly. A distributor who does tens of millions of business will not be stupid enough to not know their own limits, nor will they blindly swallow goods. They know more information than you and have more connections. Don't overstep and make decisions for your customers. The only thing you need to do is to show your charm and find ways to stuff goods to them. As long as they dare to accept, miracles will keep happening. Inventory transfer is a process of property rights transfer. If a distributor can't even watch their own warehouse, believe me, if you don't kill them, other salespeople will eventually. This is the optimal result of market selection. As adults with behavioral capacity, they can bear this responsibility. As for retail stores, let them go for now. First, if stuffing is possible, the upstream distributor will do it for you; you just need to play a supporting role, and their target selection is more precise than yours. Second, nowadays, retail stores are used to transferring goods among themselves. Only two types of people will be stupid enough to let you stuff: one is the rookie just entering the industry, and the other is the store with special sales channels, which will be discussed later.
How to stuff successfully? Actually, stuffing is like "Eight Immortals crossing the sea, each showing their own magic." Brands commonly use tactics such as enticing with management rights, supporting market expenses, promising after-sales service, and offering discounts at various ordering meetings. For brands, if the sales team can't complete stuffing even with brand premium, how can non-brand manufacturers feel? So, how non-brand salespeople stuff is the classic. Since our goal is to stuff goods to distributors with wholesale capabilities, conference recruitment and various ordering meetings are the first step, which is also a relatively effective method currently. Of course, how to find these customers one by one and successfully invite them is the content of customer recruitment. Our focus is, after completing the first step of contact, how to establish a substantive relationship and strengthen it. Here are three methods:
(1) The "seize every opportunity" method, for distributors who have already signed and purchased. Since most distributors have their own delivery vehicles and drivers, and have daily delivery routes to distribute multiple brands' products to downstream outlets, smart manufacturers should send salespeople to actively accompany the delivery to solve two important problems: a. The manufacturer's salesperson can quickly become familiar with the distributor's channels; b. The salesperson can promote their own products rather than letting the delivery driver "share the big pot" on the truck.
(2) The "overstep" method, mainly for downstream wholesale customers of provincial distributors who have signed but delayed purchasing. The usual practice is: urge the provincial customer to call the downstream wholesale customer (they normally have a good cooperative relationship), ask the wholesale customer to send a truck and driver to the provincial customer's warehouse, load the goods, and then the manufacturer's salesperson accompanies the truck to the wholesale customer's area for the first proactive delivery, and hands over the delivery details and payment (minus the purchase price) to the wholesale customer. There are two key points: a. Make sure the wholesale customer sends the driver, because the customer's driver will be familiar with the customer's routes and outlets; b. The delivery details must be recorded, both to show delivery performance and to facilitate the wholesale customer's follow-up. As they say, the hardest part is the beginning; once the beginning is made, the rest is easier.
(3) The "reciprocity" method, mainly for downstream wholesale customers of provincial distributors who have already signed and purchased. Usually, when the downstream wholesale customer's delivery tools are limited or they encounter resistance in developing outlets, the manufacturer's personnel should proactively contact the provincial customer, send capable salespeople and vehicles, load the manufacturer's goods at the wholesale customer's warehouse, and then, led by the wholesale customer, complete a full delivery demonstration in their area. The key points of this strategy are: a. The downstream wholesale customer must have already purchased; b. Make sure the wholesale customer goes along to experience the effect of vehicle sales and strengthen their determination to improve delivery tools.
- How to sustain the stuffing? Continuous stuffing is the highest level of stuffing. There is a famous saying in the "stuffing circle": "Stuffing once is not impressive; what's impressive is being able to stuff every day." Of course, if it's just simple stuffing, even a fool knows it will eventually burst. So how can we prevent the distributor's warehouse from bursting? Please make sure to do the following two things: one is to help provincial distributors make quick decisions to dispose of slow-moving stock; the other is to manage retail stores with special sales channels and prime locations.
(1) Helping provincial distributors make quick decisions to dispose of slow-moving stock is a bit like "cutting off a limb to save the body," but appendicitis should be removed early. But how can we make distributors resolutely "cut themselves off"? Actually, it's a matter of calculation. If you can directly tell them that keeping the goods is more costly than dumping them, what do you think they will decide?
Clothing is a typical industry with frequent clearance and washing. Spring and autumn styles differ greatly, and this year's styles and last year's are two different trends. If inventory management is poor, it's true that "the money earned is all in the warehouse." Let's take the example of handling cost price of 100 yuan for slow-moving clothing. The monthly retail profit is 30% (this profit is already good for slow-moving items). A manufacturer willing to buy back leftover goods offers to take them all at a 10% of the purchase price (common in the clothing industry). Due to the fast update of clothing, if this batch can't be sold this year, it will basically have no market next year, meaning it will be even harder to sell after 12 months. Should the distributor dispose of this batch as leftover? Here's a simple formula to show the distributor, which will leave them stunned.
Everyone knows that if goods in the warehouse are converted into cash, the cash can continue to earn money, which is called the opportunity cost of money. So, if the opportunity cost of money earning money is greater than the sales revenue, we should convert goods into money rather than keep them in the warehouse. This is the basis for leftover disposal decisions. Here is a compound interest formula:
Discounted actual selling price × (1 + industry monthly retail profit)^n ≥ original selling price
Note: Discounted actual selling price: the actual price sold to the leftover buyer, 100 yuan × 10% = 10 yuan Industry monthly retail profit: if not washing, the average monthly profit of clothing sales (slow-moving), 30% Original selling price: if not washing, the normal selling price of clothing (slow-moving), 130 yuan n: the number of months the slow-moving inventory stays in the warehouse.
When the left side is greater than the right side's original selling price, the opportunity cost of money earning money will be greater than the sales revenue. That is: 10 × (1+30%)^n ≥ 130 yuan. That is, when n ≥ 10, the opportunity cost of money earning money will be greater than the sales revenue. When the inventory time of clothing exceeds 10 months, even if it's a 10% discount, it should be sold promptly. (As shown in Figure 1)
After this calculation, if there are still distributors who don't believe it, you can only let them fend for themselves.
(2) The second thing for continuous stuffing is to manage the real retail giants. There are two types of retail giants that exist in all industries as golden retail customers: one is those who build the best store in the best location, with stable traffic and quality location being the key to offline retail; the other is those retail stores with special sales channels, which may not see one or two consumers enter the store all day, but they have strong shipping capacity. Such stores usually have engineering projects and relationship channels, doing "business behind the door." For example, a sportswear distributor who has good relationships with the local education system. Such resources should be used. For "golden retail customers," the manufacturer's salespeople must register and manage them separately as KA customers, visit them more often, and communicate more. Remember, sometimes what provincial distributors can't handle, they might be your savior.
[The third of Huang Runlin's three articles on channel stuffing]
Reply with the following keywords to search and read related professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Slow-moving, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misunderstandings, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Forcing Orders, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Channel Stuffing, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Ordering Meeting, Team Management, Training, Debriefing, Debriefing Report.