Foreword:

It's said that there are still about half a month until the 2017 Spring Festival, which is roughly 40-plus days away. This is the busiest time for the FMCG industry, as both manufacturers and distributors are fully engaged in the intense Spring Festival peak-season sales campaign.

Channel stocking and inventory pressure are essential tasks at this time each year. Distributors are experiencing both pain and pleasure—why? The pleasure is that the traditional peak season can triple regular sales. However, early channel stocking is the foundation for achieving the Spring Festival sales peak. The pain is the perennial issue: many terminal retailers want products with next January's date. So, the question arises: What should we do this year?

Many distributors are telling manufacturers to ship goods dated January 2017. Some even prefer to keep their warehouses and channels empty, stubbornly waiting for January shipments, ignoring the earnest persuasion of the manufacturer's sales staff.

If this were a habitual practice, there might be some justification, but this year, if you're still waiting desperately, you're being foolish!

Manufacturer Production Capacity Issues:

Looking at this year's calendar, unlike previous years, the 2017 Spring Festival falls on January 28. If shipments are scheduled for January, considering the shortage of logistics and labor after entering the twelfth lunar month, manufacturers actually have only about 20 days for production and shipping. If all distributor orders are crammed into those 20 days—especially for small and medium-sized enterprises with limited production capacity—supply will be severely strained. Even if they manage to ship before the New Year, the massive backlog of orders in a short time will inevitably lead to product quality issues and logistical or delivery oversights. Moreover, if you receive goods after the 20th of the twelfth lunar month...

Rising Raw Material Costs:

Many distributors are aware of the soaring prices of food raw materials this Spring Festival. Increases in corrugated boxes, white sugar, milk powder, palm oil, flour, transportation costs, and labor costs have caused significant headaches for many companies, disrupting their original production and sales plans. By December, some companies, unable to bear the rising operational costs, have started issuing price increase notices to distributors. The key issue is that this upward trend is uncertain and may continue. If shipments are delayed to January, the consequences are predictable.

Time is Money:

Early stocking is one of the decisive factors in winning the Spring Festival sales battle. Remember, you're not the only one competing. In today's fiercely competitive FMCG market, where consumers and terminal retailers have no shortage of product choices, a step behind gives competitors an opportunity. Terminal retailers won't wait foolishly for your product. To maximize early stocking, you must first have the goods. If you bet everything on January, you'll miss the optimal time for stocking and can't even guarantee that the manufacturer will ship in early January.

Don't Be Foolish:

This Spring Festival, if you're still telling the manufacturer's salesperson that you won't accept anything but January-dated goods, and telling terminal retailers to wait a little longer for new stock in January, then when the upstream can't ship and the downstream is already filled with competitors' products, who will bear the blame?

Source: FMCG Home (ID: lp800315111)

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