Review of Previous Section In the previous section, we focused on the eight key considerations for dealer selection:

  1. How to prioritize the criteria for dealer selection
  2. Emphasize the quality of dealer selection
  3. Especially for new dealers, adjustments should be made decisively; the market waits for no one
  4. Is a long or short product line better for a dealer?
  5. Leverage the desires of second-tier customers
  6. Manufacturers with sufficient manpower may consider inducing dealers from other industries with ample capital to enter the new industry
  7. Be wary of the phenomenon of state-owned dealers
  8. Application of the dealer evaluation form

This section will use a scenario simulation to demonstrate the action process for a salesperson selecting a dealer in an unfamiliar city!

Practical Action Training: Action Process for Dealer Selection in an Unfamiliar City So far, we have learned about manufacturer-dealer relationships, dealer selection thinking, and further refined that thinking into specific standards, actions, considerations, and even evaluation tools for dealer selection. However, after mastering these knowledge and skills, trainees may still feel lost and not know where to start when they arrive in an unfamiliar market. To truly enable trainees to learn dealer selection, we need to go further and provide them with an action process, telling them what specific actions to take after getting off the vehicle in an unfamiliar market, so that they can apply the thinking, standards, and actions learned earlier to practice.

Common Mistakes in the Action Process of Salespeople Selecting Dealers in Unfamiliar Markets I. Preconceived Notions Performance 1: Salesperson A, before going to the target city, has already asked peers about the names of several major local dealers and plans to select one from among them. (Preconceived notion: The dealer must be selected from among the well-known wholesale dealers.) Performance 2: Salesperson B goes straight to the wholesale market after getting off the vehicle, thinking that whichever wholesale dealer has an impressive storefront and a wide variety of products is the candidate dealer. (Preconceived notion: The dealer must be located in the wholesale market.) In actual work, when we are about to develop a dealer in a city, we should first consider in which regions and channels of this market our products should be sold, and then look for customers who have supply networks in the target terminal channels. As for strength—it is enough to meet our set regional requirements; too large may not be a good thing. Therefore, the "famous" star customers in the market may not be the first choice, and Salesperson A's method is biased. Salesperson B also makes the mistake of empiricism. Excellent dealers in a city are not necessarily in the wholesale market. More and more shrewd customers have retreated and closed their wholesale market stores, turning into trading companies. Smaller ones are located in residential areas, and larger ones in office buildings. On the contrary, customers who persist in wholesale market storefront business are often old wholesalers with relatively outdated concepts and a motive for cross-regional dumping (especially in wholesale markets near long-distance freight bus stations). Such customers do not have strong awareness and networks for terminal distribution.

II. Hasty Visits "As soon as an expert makes a move, they know if there is skill." When a salesperson arrives in an unfamiliar city and is eager to find a dealer, they often go directly to visit the "candidate dealer" without conducting a detailed investigation and analysis of the local market. Experienced customers will sense from talking with such a salesperson that they are very unfamiliar with the local market, leading to two negative results: a) The dealer may take advantage of the salesperson's unfamiliarity with the local market to exaggerate the difficulty of market development and the market investment of competitors, asking for exorbitant prices. b) Many dealers, when choosing products, place more importance on whether the manufacturer's salesperson is sincere and professional. The salesperson's various "layman" behaviors may cause the dealer to "look down on" the salesperson (and even the manufacturer), directly leading to cooperation barriers.

III. Not Paying Attention to Negotiation with New Dealers and Igniting Cooperation Willingness The most difficult task in dealer selection is how to foster the dealer's willingness to cooperate, solving the problem of "you love her, but she doesn't love you." In this aspect, many salespeople lack sufficient attention and preparation. After locking onto the target dealer candidate, they simply introduce the company's products and policies to the other party and wait for their willingness to cooperate. Especially in the new market development stage, the dealer's cooperation and attention/investment in the product determine the success or failure of the market. The motivation for the dealer to fully invest comes from three aspects: 1. The dealer believes the product can sell. 2. The dealer believes that distributing the product can make money. 3. It can bring benefits beyond profit (such as training, network expansion, etc.). Salespeople should, based on their company's actual situation, prepare sufficient materials, scripts, and rehearsals for these three driving forces, and then negotiate and motivate the dealer. Compared to the simple and straightforward approach of just explaining the company's policies, the former often yields unexpected good results. Don't worry about whether you have enough eloquence. Business negotiation is not hosting a show; it doesn't matter if your eloquence can entertain the other party. The key is whether you are fully prepared to showcase the benefits and interests you can provide. The more prepared you are, the better the results.

Example of the Dealer Selection Workflow I. First, the salesperson conducts an overall visit to the various channels in the local market to achieve the goals of "know yourself, know your competitor, and know the environment."

  1. Know the Environment By asking owners of small stores/wholesale stores, asking other salespeople from peers, and consulting materials, establish a concept of the basic situation of the local market, and then through field visits and observations, establish initial perceptual understanding, grasping the following information: a. Local population, administrative divisions, income levels, and pillar industries; b. How many wholesale markets are there, where are they distributed, and what are the goods flow directions of each wholesale market (some wholesale markets specialize in external regions, some specialize in covering the urban area); c. Approximately how many small stores, supermarkets, hotels, and the general situation of channel fees such as entry fees; d. Other market characteristics of the local area (e.g., several large residential areas with strong purchasing power, large units, etc.).
  2. Know Yourself Term explanation: Natural sales: Refers to a situation where the manufacturer has not yet set up a dealer in a certain place, but several local wholesalers have already self-picked up the manufacturer's products from other places to sell locally. Understand whether there is a "natural sales" phenomenon in the local market. If so, three things need to be confirmed: a. Which product item of our product is naturally selling locally? If this item is naturally circulating into the market, it indicates that there is demand for this item in the market. Perhaps in the next step to attack this market, this item will be the vanguard for the first shot. b. Who is self-picking up our company's products from other places to sell? This customer proactively self-picks up and operates our company's products, indicating interest in our products and already making a profit from them. They may be the future dealer candidate. c. During the natural sales stage, what are the selling prices and profits of our products at each level of the channel? Generally speaking, during the natural sales stage, the first-tier wholesalers who self-pick up products from other places have higher profits, while the second-tier and small stores have lower profits. To increase sales after setting up a dealer, it is necessary to readjust channel profits so that the profits of the first-tier and small stores are significantly improved.
  3. Know Your Competitor During market visits, identify your main competitor (with similar packaging, price, and efficacy to your product). Understand three things: a. In which channels does the competitor sell? What are the best-selling and worst-selling product items? The competitor has been selling locally for some time, and their market performance can serve as our "guiding light." Studying which items sell well, which sell poorly, which channels they perform well in, and which channels are still blank is extremely valuable for formulating our product/channel strategy. Example: The competitor's 500ml PET orange juice and 355ml paper-packaged apple juice sell extremely well, while their grape juice in various packages almost doesn't sell at all. Currently, the competitor mainly sells in convenience stores and has almost no distribution in school channels. Analysis: The fact that the competitor's 500ml PET orange juice and 355ml paper-packaged apple juice sell well indicates that the local market can accept similar products. The fact that the competitor's grape flavor doesn't move at all seems to suggest that grape flavor is not well accepted locally. Compared to the competitor, our company's 500ml PET orange juice has no advantage in packaging, price, etc. However, our 355ml paper-packaged apple juice has a photographic packaging appearance that is more glossy than the competitor's, and the price is lower, giving us a certain advantage. Conclusion: Use our company's 355ml paper-packaged apple juice as the first choice for new market development, quickly distribute it, and seize the competitor's network. The 500ml PET apple juice will be the second item for follow-up. In channel selection, pay attention to seizing the school channel that the competitor has ignored! b. The prices and profits of the competitor at each level of the channel. If our company's products want to overtake the competitor in the local market, we must rely on channel power. Design our price system based on the competitor's channel profits at each level, at least pleasing one channel (e.g., second-tier profits higher than the competitor), forming a pattern where that channel excludes the competitor and promotes our product. c. How far has the competitor's reach extended locally? Does the competitor have a dealer locally? How many factory personnel are stationed here? Have they set up an office or branch? Which level of the channel have they directly visited? Understanding the competitor's manpower investment locally and knowing which level of the channel they have controlled can serve as a reference for our own force deployment in the area. Benefits of the Salesperson Knowing Themselves, the Competitor, and the Environment
  4. It makes the salesperson no longer appear as a newcomer or layman, establishing a professional image in front of dealer candidates, indirectly promoting the dealer's willingness to cooperate;
  5. It provides a basis for formulating our product/channel/price strategy locally and finding the key points to support the successful launch of our product;

II. Terminal Investigation to Find Target Candidate Customers First, through the work in the previous step, determine in which channel of this market our company's products will be sold, and then conduct terminal focus investigations in these channels. Look for star customers who have terminal supply and distribution capabilities in several channels, obtain a list of dealer candidates, and then conduct further in-depth interviews, using the dealer evaluation and screening methods and standards described in previous sections to further filter and obtain the prospective dealer. Example: Determine that our company's juice will be sold in county town retail stores, wholesale markets, and 15 township wholesale/retail stores in external regions.

  1. Visit urban retail stores and ask, "Who delivers beverages to your store?" and "Which wholesalers in this city deliver beverages and other small commodities to retail stores?"—obtain a list of star customers supplying the county town retail channel;
  2. Similarly, obtain star customer lists for the county wholesale channel and township sales points;
  3. Identify the overlapping parts of the three lists;
  4. The customers in this overlapping area are those with terminal supply capabilities in all target channels—dealer candidates;
  5. Ask salespeople from other manufacturers/other wholesalers about the reputation of these "dealer candidates"—whether they have had account disputes with other manufacturers, whether they have a bad reputation for dumping goods, price cutting, or intercepting promotional items; exclude problem customers with a bad reputation and lock onto the true dealer candidates;
  6. Use the dealer evaluation form to conduct a series of actions such as making appointments, on-site interviews, storefront observations, and warehouse inventory checks for each dealer candidate, conduct in-depth evaluation, and finally find the prospective dealer.

III. After Full Preparation, Negotiate with the Prospective Dealer to Ignite Their Confidence and Motivate Their Willingness to Cooperate Most prospective dealers will hesitate when approached by an unfamiliar manufacturer about distribution rights (especially for unknown products), and many will use excuses such as "no time," "no energy," "insufficient funds," "can't focus on it now, let's talk after the New Year" to put it off. In fact, analyzing the dealer's psychology, no dealer "really doesn't want to take on a new product." The various excuses and hesitation they show are just illusions. In reality, while the dealer says "I don't want to cooperate," they are thinking, "I really want to do it, but I'm not sure if this product can make money." What the salesperson needs to do is make the dealer believe that taking on this product will definitely not lose money, and that sales and profits are guaranteed. How to achieve this?—Go to the dealer with a launch plan! Specific steps are as follows:

  1. After locking onto the prospective dealer, the salesperson first conducts a detailed investigation and record of the prospective dealer's personnel, vehicles, transportation capacity, and network, so as to be well-informed during negotiation.
  2. Organize and analyze the information collected in the "know yourself, know your competitor, and know the environment" step to preliminarily formulate a promotion plan for our company's products locally, including the following key points: a. Which product item of our company's products will be the vanguard to attack the market, and why? What advantages does this item have compared to the competitor? b. In which channel will it be sold, and what are the prices at each level of the channel? Why design it this way? What are the benefits? c. How many large promotions will be conducted in the first 2 months of launch? Specifically, the personnel, location, method, investment, etc., and it is best to estimate the sales volume that will be completed in this stage and the profit the dealer will achieve in this stage. d. What cooperation does the dealer need to provide? e. The company's service and policy guarantees to address the dealer's concerns (such as distribution rights, return/exchange commitments, etc.). g. Prepare physical evidence to show the company's promotional/policy support (such as dealer contracts, posters, promotional policies, gift samples, etc.).
  3. Communicate the self-designed new market development plan with superiors and obtain their support. To establish authority in front of customers, salespeople should never easily make promises beyond their authority. If the company does not approve, it will lead to dealer resentment. The new market development plan involves company investment, so the salesperson must obtain approval from superiors, be well-informed, and then negotiate and motivate the prospective dealer.
  4. After the new market development plan is approved by superiors, the salesperson should be fully familiar with the launch plan, design the scripts, rehearse repeatedly, and then go to negotiate with the prospective dealer. During the negotiation, fully demonstrate how our products are suitable for the local market and have advantages over competitors; how the channel selection uniquely hits market gaps; how the price setting ensures that each level of the channel makes money, promoting channel promotion willingness; when the company will invest personnel, vehicles, and resources to help the dealer with promotional promotion work. What promotion will be done in the first wave, and how much sales volume will be completed. What promotion in the second wave, and how much sales volume... Ultimately, following this new market development approach, the product will be pushed up step by step! Your new market development plan should make the prospective dealer feel after listening that it is a "very reasonable and feasible successful action plan, and following this plan, the product will definitely succeed." Then naturally, their willingness to cooperate will be high, and they will invest in market development with a hundredfold enthusiasm! The prospective dealer will become a loyal dealer.

Preview of Next Section In the specific process of new market development design and communication, the following problems will be encountered:

  1. What if the salesperson has poor communication skills and doesn't know how to motivate the dealer?
  2. What if the dealer is dismissive of the salesperson's new market development plan?
  3. What if the dealer doesn't believe the salesperson's new market development plan can be implemented?
  4. ... The solution to these problems is related to the salesperson's negotiation skills. The next section will focus on these topics, providing specific scripts and action steps for the salesperson during the negotiation and motivation of the dealer in the new market development plan.

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