In the process of introducing a product to a regional market, the effectiveness of the initial distribution and whether it meets expected goals are often among the most critical factors determining the product's success or failure. Therefore, how to complete distribution most efficiently, and what are the techniques and key points, are subjects we need to study seriously. Moreover, we must educate the planners and execution teams of distribution more broadly to achieve effective and beneficial results. Nothing can be accomplished without norms or standards. Today, this article first shares with you the criteria for evaluating the success or failure of distribution.

I. Eight Manifestations of Failed Distribution:

1. Lowering the bar, consignment leads to sluggish sales, and the product quietly dies. When a new product enters the market, because retail points are uncertain about future sales and fear inventory buildup and capital occupation, they lack the desire to stock up, making distribution extremely difficult. Many sales personnel, to meet the company's target number of outlets or to quickly distribute and increase volume, or for other reasons, may directly agree to or tacitly accept consignment to reduce difficulty, increase distribution rate, and shorten time. However, for the retail point, consigned products carry no risk; if they sell, they earn a bit, and if not, they return them. So, without consumers specifically asking for the consigned product, it's better to sell more of their own stocked items to recover capital faster. Therefore, consigned products without active consumer demand often face a dead end at the retail point. When we discover that the product is completely stagnant at the terminal, any remedial measures taken later, possibly after a month, will be too late. Moreover, when we attempt remedial distribution, we find that converting consignment to outright purchase becomes exponentially more difficult. Hence, in the first round of distribution, we should insist on cash-on-delivery and not waver easily.

2. Insufficient coverage, market sales stagnate. Total sales in a regional market are accumulated from all individual retail points. When distribution breadth is insufficient, the cumulative sales from single points are inevitably low. Additionally, with insufficient breadth, the influence on the regional market is lacking, consumer visibility is low, and thus the pull effect on retail points is limited. Of course, we are not saying that terminals should not be selected and categorized during distribution. When necessary, a strategy of focusing on core stores first to achieve sell-through and then gradually expanding is acceptable. The key is to have clear and accurate execution goals and evaluation criteria for different distribution stages.

3. Excessive initial distribution intensity affects second-time stocking. How do terminal retail points view promotions? All merchants pursue profit, and for them, reduced profits are hard to accept. So, when later profits are lower than earlier ones, it becomes unacceptable. We know that product price space is limited, so the space for promotional expenses and profit is also limited. When doing initial distribution, to speed up and reduce difficulty, we often adopt heavy promotions. This intensity, if not careful, can occupy a large expense ratio, even exhausting all promotional resources and leading to losses. Such investment cannot be sustained because the company needs to profit and cannot continuously reduce profit margins; operations require office expenses; employees need salaries. Even if promotional budgets are insufficient, it's hard to increase them. Will retail points lower their demands? If we meet retail point demands, what about channel promotions, consumer promotions, and other ground promotion expenses? If retail point demands are not met, will they stock up? Therefore, we must control the intensity of initial distribution within a reasonable range. We cannot make it too high to pursue speed and reduce difficulty, as it will affect future promotional operations for channels, terminals, and consumers. In the short term, it will affect second-time stocking.

4. No follow-up actions, affecting sell-through, turning into half-cooked rice. We know a 50-square-meter convenience store carries thousands of product varieties; a small restaurant has at least 5-10 types of alcoholic beverages. Does entering a retail point mean consumers can easily see the product? How can consumers buy without understanding? We cannot have human promotions at all points; many points, especially small grocery stores and restaurants, rely on owners, clerks, and waitstaff to recommend. How do we motivate them? After sell-through, we cannot have enough manpower for direct delivery; how do we get second-tier distributors to deliver for us? These require planned, purposeful, and continuous actions. Otherwise, after distribution ends, without push or pull methods, the sales network cannot be quickly built, so how can sell-through happen? How can volume increase? If the product cannot sell through, it becomes stuck in the market, like half-cooked rice.

5. Wrong timing for market entry. All products have peak and off seasons due to seasonal changes, and consumers' purchasing power and demand curves for certain goods change with customs, holidays, seasons, and income. Therefore, for any product, the distribution period, market maintenance period, sell-through period, and volume growth period have relatively fixed time frames in a year (with exceptions, but not the norm). Typically, baijiu (white liquor) focuses on market infrastructure in July-August, terminal promotions and continuous sell-through in September-October. If delayed, it can directly affect annual sales because consumers form perceptions about their year's liquor consumption around October (what to drink is basically decided), and the year's market protagonist is confirmed. Companies not prepared by then will not have good sales performance that year. When entering the market, we must also consider consumer recognition and acceptance of the new product, their consumption concepts and habits, and whether their purchasing power is sufficient.

6. Heavy above-the-line promotion but weak ground support, causing counterproductive effects. Currently, new products enter the market mainly through above-the-line promotion to create pull, while ground support relies on distribution, sales network building, and promotions to create push, forming a combination of push and pull. In many cases, ground push can generate some sell-through because products are displayed at terminals, supply chains are smooth through the network, and promotions target consumers and channels. However, if there is only above-the-line pull and ground support lags, it results in the awkward situation of "shouting slogans loudly but having no rope to pull." Ground push must rely on alignment of organization, sales plans, resources, manpower, and channels. When ground configurations do not match market needs, the product cannot be quickly expanded on the ground, and thus cannot echo above-the-line promotion. Even if distribution is completed, due to mismatches in organization, resources, and channels, the entire distribution and promotion system cannot be established, ultimately failing to achieve sell-through. Channel customers will also form negative views, trust decreases, and eventually the product cannot achieve sell-through or volume growth, even dying in the market.

7. Distributing to a large number of ineffective outlets. After distribution, all products rely on sell-through at retail points to develop and survive. However, many terminal points produce different sales results due to location, customer income levels, main products, sales format (retail, wholesale), and owner's popularity. Some stores may not be suitable as primary targets in the market entry phase. Therefore, products will not sell through, and a large number of non-moving points cause inventory buildup and declining channel confidence. These low-activity customers or second-tier distributors might be key for future work, and with core stores driving, they could generate some sales, but early negative results will hinder future efforts. During the market entry distribution phase, such points are ineffective for us and should not be entered yet.

8. Overextended battle lines, low team morale, and loss of rhythm control. Any company's financial, material, and human resources are limited, and the depth and breadth of management and monitoring have limits. Therefore, market expansion must rely on the company's actual situation and current adjustment limits. If the battle line is too long, it inevitably generates large expenses for personnel, travel, market, storage, and management, causing financial strain and increased management difficulty. Insufficient management creates loopholes; financial strain prevents timely expense reimbursement, negatively impacting the entire sales team and distributor system, lowering morale. Low morale causes inventory buildup, worsening the situation. Overextending on the surface also means management and monitoring cannot keep up, preventing efficient and consistent progress. Control over market operation rhythm is lost, leading to fragmentation. Eventually, forced downsizing and contraction are necessary.

II. Ideal Distribution Results:

1. Complete distribution in the off-season. Only by completing distribution in the off-season is there time to conduct above-the-line promotion, terminal promotions, personnel interception, and consumer pull promotions during the transition from off-season to peak season, ultimately increasing volume in the peak season. If delayed excessively, when terminals are flooded with various products, distribution becomes more difficult, and the product may be ignored due to competitors' heavy promotions. Additionally, the cultivation period for channels, terminals, and consumers cannot be done deeply due to time constraints, ultimately affecting peak-season volume. Especially for liquor products, consumers easily form taste habits; once accustomed to a certain alcohol content or aroma type, it's hard to change. Typically, around October, consumers form the psychological hint of "what to drink this year." If consumer cultivation is not established by then, this year's sales are already "lost." Therefore, the off-season is the best time for distribution and terminal sell-through work.

2. Fast, concentrated, and grand; distribution itself is a form of publicity. Rapid distribution actions leave an impression of good product quality, favorable policies, and strong manufacturer strength, boosting customer and channel confidence. Dragging distribution appears to channels and customers as obvious "symptoms" of poor product and weak manufacturer, causing them to lose interest and resulting in unwillingness to sell. Concentrated distribution allows limited funds, manpower, and materials to be used most fully, improving efficiency and effectiveness. Ample support and logistics ensure the entire action is grand. A motivated distribution team, positive and efficient work, sufficient resources, and high momentum also reflect the company's professionalism and positive corporate image, making it easier for channels and customers to identify with. Thus, distribution itself is a form of publicity.

3. High rate of cash-on-delivery. First, only with cash-on-delivery do terminal points bear the risk of "self-financing." Under this pressure, store owners will proactively recommend to consumers, and owner recommendations are trusted by consumers, leading to product sell-through. Second, only with cash-on-delivery can companies or distributors recover funds promptly, avoiding the risk of default, effectively increasing capital turnover frequency and bringing more returns. It also boosts distributor sales enthusiasm, improves cooperation, and makes various tasks easier.

4. Combining points and surface, with sufficient breadth and good points. As mentioned, total sales in a regional market are composed of sales from individual points. Only when there are enough individual points with good sell-through can influence be formed on the surface. Only with influence and sell-through on the surface can the product survive and volume growth become natural. Otherwise, with only a few moving stores and a wide surface, products will accumulate in most points; if the surface is narrow, even good single-point sell-through won't create influence in the overall market, ultimately failing to increase volume.

5. Tight follow-up actions to achieve rapid sell-through. After distribution, if subsequent terminal or consumer promotions are not timely, sell-through cannot be pushed, and the product gradually becomes stagnant inventory. After distribution, if the sales network is not built timely according to actual needs, terminals will quickly become quiet without supply. Timely follow-up in publicity also has the effect of "striking while the iron is hot." Therefore, only when distribution is completed or basically completed, and follow-up promotions, publicity, and infrastructure actions are timely, can good and sustained sell-through be achieved. Moreover, at this time, the promotional influence of distribution is still active, the product is relatively fresh, and the enthusiasm of points and channels is still high, making rapid sell-through easier.

6. A shot of adrenaline for the team. Efficient distribution relies on the power of "people." A proactive and active distribution team undoubtedly brings hope and the best results. However, distribution work is full of boredom and pressure; heavy workloads, terminal skepticism, and setbacks can negatively impact the team. Therefore, positive incentive measures should be in place to improve the team's mental state and work enthusiasm. We believe that for frontline employees, material needs are the primary concern in daily life, so we advocate a motivation method with "material incentives as the mainstay and spiritual incentives as a supplement," serving as a "shot of adrenaline."

-END-

Domestic best FMCG distributor learning platform Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly

FMCG industry's most professional and practical knowledge base Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation | [Long press QR code to follow]