Many dealers have encountered this problem: products are selling well at the terminal, but when it comes to settling accounts, they find no profit flowing back and can't make money. Why? In fact, this is not a problem with the product itself, nor is it closely related to the channel network. The following seven issues require careful reflection by dealers.

  1. No concept of profit Many dealers only have the concept of price difference between purchase and sale, but no concept of profit, resulting in weak cost and expense awareness, and profits are eroded by uncontrolled costs and rising expenses. Profit is the sum of operating revenue minus all costs and expenses. Many dealers only know revenue, but rarely consider costs and expenses, so they don't know how to design a reasonable price difference for products. Often dealers report that the price difference seems good, but after deducting costs and expenses, the price difference shrinks significantly, or even operates at a loss.
  2. Prioritizing market grabbing over profit Often, dealers are forced by their position in the market to be squeezed by enterprises, peers, downstream, and emerging channels at all times. At the same time, many enterprises are small in scale and have limited risk resistance, often reinvesting the profits they have earned into competition to preserve their survival space. In this situation, many dealers choose to prioritize grabbing market share, and few dealers take a longer view, turning enemies into friends, integrating resources from all aspects, and forming resource alliances.
  3. Difficulty in obtaining benefits from management It is said that "benefits come from management." Market management, personnel management, product management, financial management, inventory management, price management, vehicle management, etc., can all generate revenue, but many dealers are unable to achieve this because they encounter too many obstacles in the operation process. Poor management of payment collection, not collecting what should be collected, and the interest loss on payments may offset profits and even result in losses; poor price management leads to lower selling prices and increasing profit loss; poor personnel management leads to overstaffing and profits being eroded by excessive wages; casual spending without accounting leads to expenses exceeding income; aimless and unrestrained entertainment of factory representatives and leaders, which is not beneficial to business and produces no benefits... It is precisely for these reasons that dealers have no profit to speak of.
  4. Too much friction and loss in various links The internal system of a dealer is not harmonious. For example, inappropriate goods occupy a large amount of capital, which may cause a shortage of another best-selling product; vehicles are frequently repaired, and large repair costs must be paid. If a major accident such as a vehicle hitting someone occurs, the loss is even more severe; there is also excessive product damage, and the manufacturer does not provide subsidies; product loss goes unnoticed and cannot be accounted for; expired products are not checked and have to be sold at a discount; the delivery orders issued by the front office are not delivered by the transport department, and even if delivered, they are unwilling to collect payment, and the warehouse is even more unwilling to accept returned defective products; the warehouse also does not pay attention to fire and theft prevention, and a fire can destroy years of accumulation by the dealer. Profit is like flowing water; it leaks a little here and a little there, not obvious at the time, but eventually it dries up. Dealers must look one step ahead, think one step ahead, and pay attention to the coordination and thoroughness of internal operations.
  5. Limited marketing level, often not knowing how to do promotions For example, a dealer can only invest one yuan in a market, but doesn't know how to invest three yuan; when they should wait and see without promoting, they make a big price cut; they don't actively develop new markets, but prefer to stubbornly hold on in the most competitive areas. Although dealers are flexible in operation, they often lack systematic methods. They solve problems more by "making decisions on the spur of the moment," and even when considering problems, they are one-sided. Dealers should learn and comprehend advanced experiences from manufacturers, or receive more relevant marketing training.
  6. Lack of reasonable product structure Without a reasonable product system, there is no profit structure system. Dealers look for new products every year, but even if they find a good product, it may not match the existing products, and they cannot build a product structure that maximizes profits for the dealer. Many dealers fall into this trap: selling drinks on one side and slippers on the other; they have multiple famous brand products, but none of them make money, and there is no high-profit product. This shows that products are important, but product structure is even more important.
  7. Inability to obtain profits from soft services This is the biggest reason why dealers' profits are not ideal. Currently, some dealers have weak service awareness, insufficient understanding of consumers, and insufficient service to downstream customers. Some sitting merchants even do not deliver goods, leaving second-tier distributors or terminals to pick up goods themselves; or they do not accept returns or exchanges, causing economic losses to consumers or downstream customers; there are even more irresponsible behaviors, such as untimely delivery. As intermediaries, service is the basic quality of dealers and also the magic weapon for dealers to quickly gain differentiated advantages. If service is not done well, dealers naturally cannot obtain profits from the soft level. Where have the dealer's profits gone? Not in the hands of the manufacturer, nor at the consumer's end, but with the dealer themselves. To obtain these profits, dealers must still work hard, manage diligently, and continuously explore a profit-making path that suits them. Click Read Original to see more highlights of the 4th FMCG + Internet Conference... -END-