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As the company's transformation deepens, future channel operations will be built around dealers establishing a distribution management platform. In this context, distributors become a key part of the channel. The development and management of distributors will significantly impact the company's business performance, so it is necessary to sort out and standardize the relevant modules in distributor operations.

I. Classification of Distributors

  • Urban distributors: Customers with certain network coverage in urban areas and the ability to cover and maintain the network.
  • Channel distributors: Customers specializing in one or more channels with channel operation capabilities.
  • Regional distributors: Customers who distribute to terminals at the county level and have the ability to operate regional markets independently.

II. Selection Criteria for Distributors

  • Terminal service capability: Strong coverage and service capability for downstream, covering a certain number of stable terminal stores with good performance.
  • Cooperation willingness: Strong recognition of the company and a strong willingness to cooperate.
  • Agent products: The products they represent match the target distribution network and channels of our company.
  • Own strength: Equipped with warehousing, transportation, and operating funds, with dedicated personnel serving downstream channels or terminal stores.

III. Steps for Distributor Development Step 1: Regional/Channel Scanning: Scan the region/channel based on dimensions such as population, market capacity, terminal stores, and market share. This yields strategic regions/channels, key regions/channels, cultivation regions/channels, and chicken-rib regions/channels. The first two types are key and should be prioritized for coverage with significant investment. The third type can be covered but not with key investment at present. The fourth type is not considered for development for now.

Step 2: Customer Scanning, Matching, and Layout: Match existing dealers based on the classification of regions/channels. Some regions/channels are directly controlled by dealers and are stable without adjustment. Other regions/channels are not covered by dealers or have poor performance, so distributors need to be set up for management. This results in an overall layout plan.

Step 3: Distributor Search: Search for distributors that match the region/channel according to selection criteria and identify potential customers. Main search methods are as follows:

  1. Visit terminal stores to trace upstream customers.
  2. Visit wholesale markets.
  3. Peer introductions.
  4. Recommendations from existing customers.

Step 4: Distributor Negotiation: Conduct in-depth interviews with potential customers (must be on-site) to understand their actual needs. Explain the industry development, company status, brand history, development prospects, product structure, and market strategy. Communicate on key points such as regional division, price system, contract policy, cost investment and sharing, market improvement plans, and expense verification. Then reach an agreement on how to start the market, how to develop channels, what support is needed, and what cooperation matters need to be handled.

Step 5: Sign the tripartite agreement and related attachments to complete distributor development.

Note: Steps 3, 4, and 5 above require the participation of dealer personnel.

IV. Relevant Terms for Distributor Cooperation

  1. Distribution items and price system: The region and customer determine the distribution items. The price system is shown in the "Distributor Price System Table." The region can make minor adjustments based on regional characteristics (considering the difference between front-end and back-end for downstream customers, the terminal price can be adjusted by 3-5%).
  2. Task signing and rebates:
  • Tasks are reflected in the tripartite agreement and can be adjusted quarterly based on actual conditions.
  • Monthly rebate of 3 points is borne by the dealer, and it is paid in the following month as long as the distributor achieves the task.
  • Quarterly assessment of 2 points: When signing the tripartite agreement, the three parties should confirm the assessment items and sign and seal (see "Distributor Quarterly Assessment Items Table"). After the quarter ends, the dealer pays in the following month. This part of the cost needs to be reflected in the dealer's "promotional aid expenses."
  1. Market action projects and cost investment: (Content not provided in the original text)

V. Daily Management of Distributors

  1. Company personnel and dealer personnel jointly manage and serve distributors, but in principle, dealer personnel take the lead.
  2. Regular visits to distributors are recommended at least once a week to track the execution of action plans and visit downstream stores.
  3. Relevant cost investments, policy communication, and financial transactions must be checked and have receipt procedures.
  4. Monthly collection and analysis of distributor inventory data and downstream terminal information.
  5. Quarterly business review with distributors, which can be conducted in the form of on-site meetings for sharing.

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