---
title: "\"Cross-regional sellers are shameless, those affected are incompetent!\" Analysis of distributor cross-regional selling issues!"
description: "A well-known marketing expert once said: \"Cross-regional sellers are shameless, those affected are incompetent.\" Regardless of how it is dressed up, cross-regional selling is a tumor in the healthy development of a company's sales, differing only in whether it is benign or malignant. Both need early treatment to prevent harm. This is a troublesome but necessary problem to solve."
author: "沈彬松"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-08-06"
language: "en"
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# "Cross-regional sellers are shameless, those affected are incompetent!" Analysis of distributor cross-regional selling issues!

> A well-known marketing expert once said: "Cross-regional sellers are shameless, those affected are incompetent." Regardless of how it is dressed up, cross-regional selling is a tumor in the healthy development of a company's sales, differing only in whether it is benign or malignant. Both need early treatment to prevent harm. This is a troublesome but necessary problem to solve.

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**Introduction:** A well-known marketing expert once said: "Cross-regional sellers are shameless, those affected are incompetent." Regardless of how it is dressed up, cross-regional selling is a tumor in the healthy development of a company's sales, differing only in whether it is benign or malignant. Both need early treatment to prevent harm to health and life. This is a troublesome but necessary problem to solve.
**Benign Cross-regional Selling**
Benign cross-regional selling is normal market circulation with minimal price differences. The solution is relatively simple: address the issue, clarify your stance, but avoid mandatory measures. Main types include:
**1. Incidental cross-regional selling.** Usually occurs when distributors handle multiple categories and need to serve terminals, but not for price-cutting purposes. For example, if a truck carries 500 cases, 30-50 cases might be incidental, which generally does not harm the market.
**2. Cross-regional selling into blank markets.** When a market is undeveloped or under development, goods may flow in as distributors seek high margins from new products. This does not involve malicious price undercutting and can spur local distributors to improve, though passive occurrence is not encouraged.
**3. Border area circulation.** When two markets are close, normal product flow with slight price differences within normal margin ranges is acceptable.
**4. Short-term inventory pressure.** Distributors may offload stock to free up capital or avoid expiration, but this is not habitual or malicious. Prices may be slightly lower but not undercutting, and it is not a long-term behavior.
These issues have limited market impact. Depending on the reaction of the affected distributor, a clear stance with slow action and appropriate control is usually sufficient, akin to removing a benign tumor with minimal aftereffects.
**Malignant Cross-regional Selling**
Wherever there are bestsellers, there is cross-regional selling, and among them, malignant forms exist. Like corruption in government, if not addressed, it can damage the entire system. Malignant cross-regional selling can become "cancer" in the market. Main types include:
**1. Boosting sales for rebates.** Distributors sell at normal prices in their own territory but disregard others, using direct or indirect (via second-tier distributors) cross-regional selling to hit sales targets and obtain special policies and rebates.
**2. Vendetta cross-regional selling.** When two distributors have historical grudges, they may try to harm each other, using the manufacturer's products as "cannon fodder." This is severe and must be addressed. Typical signs include undercutting prices in the rival's market or offering small quantities at prices far below the distributor's net price. This may involve the manufacturer's own distributors or other brands' distributors. Resolution requires senior management intervention and multi-region coordination.
**3. Malicious incidental cross-regional selling.** In territories not their own, distributors use the manufacturer's bestsellers at below-market prices to open doors, mixing in other low-margin brands, ultimately sacrificing the bestseller's price integrity to introduce high-margin generic brands and gradually replace them.
**4. "Killing" bestsellers through cross-regional selling.** When a bestseller dominates the market, hindering other brands, distributors may disrupt the bestseller's channel pricing to "kill" it and promote other brands.
These practices harm distributors who genuinely work hard and must be resolved for market health.
**Why Does Cross-regional Selling Occur?**
**1. Historical issues**, especially regional ownership before market segmentation. Some "old-timer" distributors refuse to accept new boundaries, claiming "this region has always been mine."
**2. Geographic proximity**, where the cross-regional seller is close to the affected area and has close business ties with local terminals.
**3. Price differences**, where prices in the affected area are generally too high.
**4. Policy differences**, where the affected area does not enjoy the same price, policy, rebate, or hidden discounts as neighboring areas.
**5. Habitual cross-regional selling**, where some distributors built their business on it and refuse to change.
**6. Manufacturer's attitude**. Whether the manufacturer has the will to address it, whether the issue has become severe enough to demand action, and whether the conflict between shameless sellers and incompetent affected parties has escalated beyond reconciliation. If so, it must be resolved. Creating conflict is the first step; the key is the manufacturer's attitude, which is the fundamental issue.
**Which Distributors Like Cross-regional Selling?**
**1. Veterans**, the early financial backers of the manufacturer. They feel entitled and act with impunity.
**2. Tycoons**, with substantial capital, who know how to extract policies and resources. Once they get policies, they become "five-clawed golden dragons" crossing regions without doing real work. They are the bane of loyal and terminal distributors, reaping what others sow.
**3. Wanderers**, in transition to becoming regular players, using bestsellers to build their business but resorting to ruthless price undercutting.
**4. Privileged insiders**, who enjoy special treatment due to connections, acting with impunity.
Wherever products sell well, cross-regional selling occurs; wherever it occurs, price undercutting follows; wherever undercutting occurs, interests clash. The manufacturer's role as referee is crucial when conflicts escalate.
**How Should Manufacturers Handle Cross-regional Selling?**
When a manufacturer has grown strong, it cannot ignore the disorderly development of cross-regional selling. Solutions include:
**1. Clear attitude and strict rules.** Educate internally first, then externally, to create a unified understanding and convey the manufacturer's determination. Use systems and clauses to clarify territories, pricing, and rebate policies. Tell stories of those who do well and those who face severe consequences.
**2. Team adjustments and role swaps.** Transfer internal cross-regional experts to blank markets to remove support for major offenders.
**3. Prevent big distributors from leveraging policies and adjust regional policies.** In mature markets, consider total sales as one metric, not the sole criterion. Offer product-specific promotional rewards to keep cross-regional sellers busy with legitimate work.
**4. Cut losses decisively.** Treat chronic malignant offenders as tumors and remove them to deter others.
**5. Establish an inspection team** to target privileged insiders, showing ordinary distributors that justice is served, and publicize the action.
**6. Match actions to capabilities**, such as canceling credit, requiring cash on delivery, demanding deposits or cross-regional funds, deducting rebates, reducing policies, cutting off products, or halting supply.
**7. In the information age, collecting evidence is easy; the key is classification.** Start gently: reduce policy on the offending product, then cut policy, then cut supply, then reduce overall policy, then cut several products. For repeat offenders, if another distributor can better serve the region, let the offender "freeze" in the cold palace.
Cross-regional selling is difficult but not impossible to solve. The key is the manufacturer's attitude. Distributors ultimately seek profit; if the upstream is clear, the downstream will not be muddy.
Source: FMCG Elite Club (ID: FMCG-CLUB)


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