Preface: Hubei Quanjielai Trading is a company founded by the author, Liu Fen, in 2014. In 2014, she used 2 million yuan in startup capital from her parents to start a business in Yunmeng County, Xiaogan, as a Mengniu distributor, and has been doing so ever since. From the initial Yunmeng County, to the prefecture-level city of Xiaogan, this year she also took on the Yingcheng County market. In 2020, she received Mengniu's Outstanding Contribution Award (only 10 distributors nationwide received this honor).
The following is the "business wisdom" of Quanjielai Trading, personally narrated by its General Manager, Ms. Liu Fen, first published at the "Distributor Member Club · Fourth Boss Sharing Session," with slight abridgments.
This article is divided into three parts: Part 1: A Novice's Practice of Expanding Territory and Advice for Second-Generation Succession Part 2: A Post-90s Perspective on Management Methods for Frontline Sales and Promoters Part 3: Rational Approach to E-commerce Price Chaos: One Formal Meeting Resolves the Issue
A Novice's Practice of Expanding Territory and Advice for Second-Generation Succession In 2014, I took 2 million yuan from my parents to start a business in Yunmeng County. My parents were in the Libai (detergent) business, while I did Mengniu, completely unrelated categories. My parents were also "hands-off bosses," basically not interfering. I knew nothing, a complete novice. How to do the market? The method was simple: in the early stages, I did whatever Yili did. At that time, the Yunmeng market was chaotic, so I completely benchmarked against Yili. If Yili issued a policy in the morning (e.g., having frontline sales take photos of delivery notes for Yili Jindian, with a store policy of giving 5 cartons), I would study it in the afternoon and formulate a policy for Mengniu Telunsu, giving 6 cartons. I didn't understand anything, so I had no choice. Whatever price Jindian was, Telunsu would be the same. Completely benchmarking against competitors. Of course, some might ask, why not learn from other Mengniu distributors in other markets? My thinking was that each market has differences; the competitive environment, policies, and prices in other markets are completely different. Even if Mengniu is doing well in other markets, we only see the current results. When learning, don't learn what they do now; learn how they did it in the past. Because I knew nothing, I positioned myself as a salesperson, learning and growing with the team. At that time, I had no management experience. For example, in terms of salary, it was simple and crude: whatever Yili paid, I paid the same fixed amount, ensuring no big difference from peers. I didn't know about base salary, performance assessment, etc., and had no concept of losing or making money. I just felt that a few thousand yuan came in every day, which seemed okay. I recall that only after 2-3 years did I have base salary + sales commission, and now base salary + sales commission + market construction assessment, etc. Along the way, there were many jokes. Why mention this? The methods seem not clever, even a bit "stupid." But what I want to say is, many times we cross the river by feeling the stones, not knowing the right path. Of course, without the exploration and learning from 0 to 1, we wouldn't have the decent results we see now.
Following my entrepreneurial journey, I'd like to talk about second-generation succession. You can see my parents' approach: Don't ask me how to do business; go to Yunmeng yourself and figure it out. Don't ask me, and I won't interfere. If you have problems, find answers yourself. A small boat is easy to turn; making mistakes is not scary. This is what my dad often said to me, and it gave me confidence. Why is second-generation succession often unsuccessful? I think the core issue is not the second generation's willingness (it's already not easy for them to be willing to take over). The core lies in how the parents hand over. Because of my age, I've been in contact with many second-generation successors. I've found a major problem when parents hand over: they don't delegate authority, yet they think they have, feeling they've given everything. For example, during daily morning sales meetings, if the second generation says something, they get scolded by the father. The father does want to help, but sees everything as unsatisfactory. The second generation complains, "They say they want me to take over, but they scold me in front of employees every day. How can I have authority?" Another issue is team management. The existing team was brought up by the parents; they watched you grow up, used to call you uncle, now they call you "Old Wang" or "Old Zhang." Will they listen? The market must be won by yourself, and the team must be led by yourself! Regardless of the previous team situation, you must first reset. Therefore, for second-generation succession, I suggest three forms: First, independently take charge of a region or route, changing roles. Don't treat them as a child, but as an employee. In the form of training and experience, let them achieve results on their own, gain team respect, accumulate experience, and eventually be selected as general manager. Second, give them money to run an independent brand. This is similar to my path. Within controllable financial risk, let them explore on their own. Allow trial and error, give full freedom, as long as it's controllable. Third, directly start a new channel business, such as online e-commerce. Fully utilize existing company resources and the young person's knowledge, vision, and exposure to open a brand-new channel. In summary, either make them a salesperson or an entrepreneur; don't let them become an operator or manager right away, especially with "behind-the-curtain" interference.
A Post-90s Perspective on Management Methods for Frontline Sales Let me talk about my management of the frontline sales team. Monthly income (100%) = Base salary (30%) + Sales commission (40%) + Performance assessment (30%)
- Base salary: 2,000-3,000 yuan (different levels have different tiers)
- Sales commission: 1% of total sales + commission on key products (adjusted monthly)
- Performance assessment: 1,000 yuan for market infrastructure + 500 yuan for store activity rate (adjusted monthly) In my understanding, each module has different value: Base salary is labor security Sales commission is sales dignity Performance assessment is standardized actions Combining these three, this salary structure effectively drives frontline sales to push the market according to our plans.
Additionally, the milk category has a special aspect: near-expiry returns. Many milk distributors include near-expiry returns in performance assessment or link them to sales commission, but I don't. In my understanding, you can't have your cake and eat it too—wanting the horse to eat grass while controlling the return rate is impossible. So in the salary structure, I don't assess returns; I only assess the market construction process. What product, in what type of store, how many cartons to place, in which display position, and where to place it—all follow specific standards. That is, I assess the process, the specific actions. Of course, this doesn't mean we don't pay attention to returns. I use "systems" to require returns within a specified time; if not returned, there are penalties. If expired products appear in the market, there are heavy fines.
Besides salary design, I want to share some daily management insights: First, if a salesperson doesn't give us the desired results based on our planned work, my first reaction is not "he's lazy, he's not doing it," but "Did my supervisor and I not explain clearly? Is our mechanism designed unreasonably? Or is there a problem in his life or family?" My understanding is that since employees chose this job, they all want to do it well; no one deliberately wants to do a bad job. Don't deny your employees first; instead, help them solve problems with a supportive attitude. This is really important because it's the premise for our specific actions. Second, impose immediate fines for unmet goals. Many distributors have penalty systems for certain tasks, but they often reflect in salary, which I think is ineffective. My approach is: If goals are not met within the specified time, fine immediately (at the first moment), give the money to finance (or to the warehouse manager for large dates), and directly use it as a snack and fruit fund, spending it right away. If fines are reflected in salary, employees will think the boss took the money. Also, fines are not the purpose; the purpose is to get things done, not to put money into the company's pocket. Monthly salary also has a lag effect, so it's less effective. Third, during new product launches, supervisors should first test and verify methods, then give the frontline team clear and specific methods, not ambiguous ones. For example, for new product distribution, clearly tell frontline sales: the price system, how many cartons to stock in different store types, how to display, whether to set up red packet group incentives, store profit margins, and when to return. Make it 100% clear. We don't let frontline sales test or pilot because the milk category has a short shelf life, and different new product order quantities correspond to different manufacturer policies, so there's no time for frontline sales to spend more time on pilots.
E-commerce Price Chaos—Rational Approach One Formal Meeting Resolves the Issue Regarding e-commerce price chaos, I'd like to talk about this. Indeed, as a dairy category, a daily necessity, whether it's big promotions on JD, Alibaba, Pinduoduo, or offline community group buying like Xingsheng Youxuan and Meituan Youxuan's flash sales, dairy products are the first to be affected. I believe e-commerce price chaos also troubles distributor bosses. Next, I'll share my understanding and approach. First, "face" e-commerce price chaos. My understanding is: That's God's business; we just do our own thing. Distributor bosses are anxious: e-commerce price chaos, they buy at 60 yuan per carton, e-commerce sells at 53 yuan per carton. What to do? A large part of the anxiety is "you're looking at them." Why not just not look? We do need to pay attention to e-commerce platforms, but what can we change? Can we take their goods? Can we stop stores from stocking? We admit the impact is significant, but as distributors, we can't decide, so we don't look. For example, domestic oil prices rise, determined by the international market. Since we can't change it, we focus on our own things. From the earliest KA stores, to online e-commerce, to CVS, community group buying, and now discount supermarkets, the emergence of new channels is beyond the manufacturer's control, let alone us distributors. There are many things in this world we can't decide; instead of worrying, we should do our own thing. For my own business, my judgment is: Even if the sky falls, there are taller people to hold it up. Xiaogan is a third- or fourth-tier city, so it won't happen that fast. If external changes come, we certainly won't be the first to fall. Looking back, we should ask ourselves about our own market: Have we really fully exploited it? Yili is still there, other brands are still there, and sales are growing. That's my attitude and view on e-commerce price chaos.
Now, let me talk about my specific approach. How do we learn about e-commerce price chaos? Often from frontline sales team feedback. Why do they report it? Because we distributor bosses are also paying attention. To address this, on August 1, 2022, I held a very formal meeting with all my sales team. At the meeting, I said seriously: "Let me be honest with you all. Regarding e-commerce price chaos, your boss, me, also doesn't have the ability to solve this problem. If you insist on solving it, I'm sorry, but please find another boss. Let's reach an agreement: from today's meeting onward, we won't discuss this matter; we'll just do our own thing. Additionally, if consumers buy on e-commerce platforms and stores are just pickup points or group leaders, we won't care; but if store owners order from e-commerce platforms and then sell, while also taking our display fees, we will terminate the display agreement and switch them to ordinary partners." After this meeting, the entire company, from top to bottom, stopped discussing e-commerce price chaos and focused on our own business.
In Conclusion The above is part of Ms. Liu Fen's sharing at the "Distributor Member Club." Due to space limitations, we can't elaborate on everything. Therefore, at the First China FMCG Distributor Conference in Shenzhen from October 9-11, we will invite Ms. Liu Fen, General Manager of Hubei Quanjielai Trading Co., Ltd., to give a keynote speech on site. Interested friends, don't miss it!