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Many trading companies are adept at navigating the market in their startup phase, but once they step onto a bigger stage, they become lost. This shows that a dealer's management upgrade should start with team management.
Example: Mr. Wan, who comes from a food background, is a well-known dealer in his locality. In the early days of his business, he and his wife, along with relatives like his nephew, worked hard for several years in traditional channels and achieved considerable success, living a comfortable life. The several brands he distributed also grew rapidly, from a few million in scale to over ten million. Mr. Wan once proudly boasted: "Six years ago, when I attended the annual meeting of Company A, the chairman personally came to toast me."
But in recent years, not to mention meeting the chairman, Mr. Wan finds it hard to even see the regional manager. Indeed, the manufacturer's perspective has changed. As the company grows and becomes more standardized, with a more detailed personnel hierarchy and clear responsibilities, basically any issues in the dealer's market can be resolved by the regional manager or below. The regional manager only visits the market once a year to check the implementation of key plans and visit major clients. Mr. Wan, who cannot see the regional manager, fails to notice his own problems and simply blames Company A for not being cooperative.
Let's look at Mr. Wan's company: it has grown from the original 3 people to multiple sales staff, 1 internal clerk, dozens of promoters, 2 accountants, and fixed positions like warehouse keepers and drivers. Since the combined sales of several brands exceed 12 million, and the number of channel outlets has grown from 120 five years ago to 1,200, it is impossible not to hire people and maintain the market.
But in reality, sales have hovered around 12 million for the past three years, and this year they even dropped by 20%. Although there are over 10 sales staff, at least 3 leave each year and are replaced. Recently, two core staff were poached by competitors, and one left to start his own business, becoming the boss's rival. Such a situation with key personnel leaves Mr. Wan in a difficult position, trapped in a dilemma. These are accumulations of long-term problems, and such incidents are all too common in the dealer community.
When the company is small, it is easier to manage: the boss acts as the main force, family members assist, and with flexible human touch, a good product can earn a share of the market. However, when the scale reaches over ten million, requiring a dedicated sales team, finance department, and other staff, and management needs to rise to a higher level, bottlenecks often occur: new product promotions fail, sales growth slows, and staff turnover is unstable. It seems that for dealers, growing bigger becomes increasingly difficult.
Besides the dealer boss needing to improve his own quality and management skills, the main reason is that the team's strength has not been fully utilized. The company's operational rules have not been truly implemented, leading to the situation where they are adept at navigating the market but lost on a bigger stage.
Beware of Multi-Headed Leadership
The phenomenon of multi-headed leadership among dealers arises partly from historical entrepreneurial reasons, where family members are the main force, and partly from a lack of institutionalized management. Accustomed to a human touch and verbal decisions, the dealer boss and his wife cause subordinates to lose confidence. When the boss and his wife give inconsistent or even conflicting orders, employees are caught in the middle, and rules change frequently or even conflict. For example, the boss is responsible for sales, while the wife handles vehicles. The boss asks a salesperson to visit a certain route today, but the wife needs the vehicle for another task. Without proper communication between the boss and his wife, the salesperson has to spend energy on maintaining harmony. Over time, they become physically and mentally exhausted, and with poor sales and low income, leaving is normal. Therefore, a dealer company should first simplify personnel relationships in areas like personnel and financial management, allowing employees to focus on market sales and not be affected by internal management issues.
Moreover, if the chaotic multi-headed family management is severe, it can harm the dealer company's reputation, making it difficult to attract talent. New employees may also leave early due to imperfect systems.
Rough Performance Assessment Kills Sales Passion
Some bosses still use rough assessment mechanisms, such as a veteran dealer of well-known washing and chemical products who incentivizes based on payment collection points for all products, or simple adjustments to commission rates. Even for new products, there is no scientific regulation; it's a one-size-fits-all approach based on experience.
This simplifies things for the boss but harms the market and the team. For sales staff, they naturally prefer to sell what is easy to sell. Rough assessments for new products usually fail because they do not ignite passion for the new products, and there is no benefit tied to them. People are accustomed to doing simple things; if you want the team to take on responsible tasks, you need to provide good incentives.
A scientific salary system is a stabilizing force for maintaining team passion. A rough commission system makes the team feel no difference in income in markets with similar sales, and no pressure. Only with competition and comparison will they become more proactive. Therefore, for new product operations, you can shift from a "basic salary + commission" model to a task-based system, subdivided into task completion salary, market performance salary, and overachievement bonus salary, so that there is a clear income difference between those who do well and those who don't. This will motivate sales staff to strive for the additional salary they can earn. For example, market performance salary includes shelf presence rate salary, new outlet development salary, and visual merchandising salary, which can add up to a considerable amount. This will push them to carefully complete the groundwork before launching new products. At the same time, provide necessary insurance and welfare benefits. With basic security, sales staff can settle down and face higher market demands. For newly launched products, to ensure shelf presence, offer a special "shelf presence rate" award. High incentives, but with a clear time limit, generally no more than 3 months. After 3 months, the high incentives stop, and assessment becomes stricter. If the basic shelf presence is not achieved within 3 months, there should also be assessment, with clear rewards and penalties. In principle, for new product promotion and development, focus more on rewards than penalties, and provide more incentives.
In summary, let capable people earn more income from new products and be more willing to sell them. Only then can the dealer company's new product distribution succeed and the sales scale grow. Otherwise, new projects are not defeated by competitors but strangled by internal staff.
Internal Incentives to Retain Talent
When excellent sales staff are poached by competitors, it is usually because the competitor offers a higher salary, a higher position, or tangible hope. People naturally aim higher. To some extent, the retention of sales staff is a matter of company structure. Imagine: if there are good benefits, good income, good promotion paths, and even profit sharing, would they leave? Therefore, dealers should set up promotion thresholds, build a good platform for capable people, meet the development needs of excellent staff, and retain talent to create greater value.
Employees who leave to start their own businesses are usually the most capable, with good customer resources and relationships in the channel. Coupled with repeated attempts to advise the boss for development without results, and sometimes the boss letting down core employees, they eventually go solo. If the company has a suitable profit-sharing mechanism, making key staff feel like "bosses in employee clothing," and they can receive year-end dividends when the company performs well, they gain a sense of belonging and increase their work enthusiasm. With a stable core team, the company's development has a guaranteed foundation. The core strength is the foundation for the company to grow on a larger platform.
Professionals Do Professional Work
To break through development bottlenecks, dealers must dare to reuse professional talent. For example, hire a dealer operator. Some dealer company bosses feel the management difficulty, with many staff, high market standards, and limited energy, but they still need to adapt to the market pace. So they hire a well-regarded professional manager from the industry to operate the business, breaking through the bottleneck, while they only control the financial aspects, forming a good complementary relationship with the professional manager. In China, dealer companies with annual sales over 100 million basically have professional operators to complete the upgrade, through professional institutional management and market advancement.
Generally, professional operators command high salaries. Some companies with less severe problems may not be able to afford an operator for now. They can also poach manufacturer business managers with good character and rich practical experience to join and assist in the upgrade. For example, many successful dealer companies in the industry hire manufacturer business managers to run their marketing departments, standardize operations, improve efficiency, and cultivate more professional talent, thereby raising the overall quality of the dealer company.
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