A well-designed compensation system for distributors makes it easier to build a spirited and invincible sales team, gaining a dominant position in market competition. However, the FMCG industry generally pays lower salaries compared to real estate, capital operations, and software sectors. The disparity between effort and reward is indeed a true reflection of the FMCG industry. Therefore, designing a relatively fair, inclusive, reasonable, and easy-to-manage compensation system is more conducive to the development of distributors. The talent in a distributor's team mainly includes sales personnel, comprising three major sales positions: sales manager, business supervisor, and sales representative, as well as back-office staff. The author will provide a classified explanation of the four types of positions in a distributor's team. The compensation for various staff consists of four components: fixed base salary, commission, benefits, and year-end bonus. Setting different compensation structures based on the characteristics of different talents helps tailor rewards to individual performance, ensuring that compensation aligns with job responsibilities, guaranteeing that positions match value, and maximizing the work enthusiasm of all positions.

  1. Compensation Design Tips for Sales Managers Sales managers allocate sales targets, plan expense distribution, set network construction indicators, plan and execute the distributor's marketing plans, supervise sales expenses, and evaluate, track, and assess various indicators of sales personnel. A sales manager is both the distributor's strategic brain and the primary executor of market strategies. A good sales manager must not only undertake overall performance planning but also be responsible for channel expansion, terminal maintenance, and team building. Therefore, the quality of the incentive system for sales managers basically determines the quality of the distributor's market performance.
  1. Base Salary Design for Sales Managers A sales manager's role is process-heavy but result-oriented. However, the base salary is a fixed component. The base salary is not primarily performance-based but serves as a basic guarantee for the sales manager's time and experience, without incentive effects. Generally, in the FMCG industry, setting a base salary of 2000-6000 RMB for sales managers is common practice, but this design needs to be determined based on the distributor's own business scale and profitability. Of course, when the base salary cannot be high, this should be reflected in commissions, benefits, and dividends. This helps build the sales manager's sense of belonging to the distributor.
  2. Commission Design Commissions for sales managers are divided into three types: annual sales commission, net collection commission, or company net profit commission, basically calculated at 1-3% of the completed task volume within the entire jurisdiction or region. This can be settled monthly or paid quarterly.
  3. Benefits Design: Benefits cover a wide range, including phone expenses, living allowances, office expenses, travel expenses, vehicles, social insurance, and holiday benefits. This should be set based on the distributor's strength; the more, the better, but if not possible, do your best. Phone expenses usually exist in the form of phone subsidies, ranging from 200-500 RMB. Travel expenses are mostly reimbursed based on actual expenses or included in the year-end bonus. Other expenses can be designed by the HR manager, referring to industry standards and considering actual conditions.
  4. Year-end Bonus: The year-end bonus is an affirmation of the sales manager's overall performance, including year-end dividends, year-end bonuses, or year-end profit commissions, existing in three forms. This is directly linked to sales performance. If a low-wage system is adopted, a dividend system must be adopted. If a high-wage system is adopted, the sales manager's value is reflected through year-end bonuses and year-end profit commissions.
  1. Compensation Design Tips for Business Supervisors Market share, inventory, stocking, wholesale classification, profit margin distribution, task breakdown by quarter, month, and day; discussing politics, society, life, listening to customers' neighborhood gossip, emotional entanglements, etc. A business supervisor is both a versatile person who pleases customers and a comprehensive talent who can lead the team, reasonably divide work, and achieve sales targets. The compensation design for business supervisors should focus more on motivating their enthusiasm in the work process.
  1. Base Salary Design for Business Supervisors The base salary for business supervisors in the FMCG industry is almost the lowest among all industries, generally ranging from 1800 to 3500 RMB. Excessively low wages are one of the main factors causing instability among business supervisors. However, the nature of the work also makes many distributors unwilling to raise basic wages, instead using commissions and benefits to stimulate the work enthusiasm of business supervisors.
  2. Commission Design for Business Supervisors The commission for business supervisors needs to be determined by the distributor based on the actual situation of their enterprise, with commissions ranging from 0.3% to 10%. In FMCG, commissions can mostly adopt piece-rate commissions, with amounts ranging from a few cents to a few yuan, depending on the product's turnover frequency and difficulty, reflecting the incentive nature of more work, more reward. For enterprises with relatively loose management, bonus distribution or job subsidies can also be adopted.
  3. Benefits Design for Business Supervisors Given relatively low wages, benefits should be fully guaranteed. The benefits for business supervisors mainly consist of communication subsidies, full attendance subsidies, travel expenses, living allowances, office subsidies, vehicle subsidies, and seniority wages. Currently, social insurance and basic guarantees are not well implemented for most small and medium-sized distributors, and benefit conditions are also very limited. This is also a basic reason for the instability of distributor business supervisors. However, within their capabilities, distributors establishing standardized and attractive benefit systems is conducive to employee stability and also beneficial to the enterprise's own image. Phone subsidies can be fixed at 50-200 RMB per month, and entertainment expenses usually adopt a proportional linkage form. Vehicle subsidies mostly range from a few yuan to dozens of yuan. Others can be left to the HR manager to design.
  4. Year-end Bonus Design for Business Supervisors Linking the income of business supervisors with the distributor's overall performance is also a common practice. For the year-end bonus for sales supervisors, methods such as year-end dividends, fixed bonuses, material rewards, and sales commission can be adopted. The year-end ratio and methods adopted should be measured based on the distributor's own scale, profitability, and incentive expectations. This part is mostly designed by the distributor themselves, and it's hard for others to intervene. For sales commissions, they must be paid promptly. This is the most direct reflection of the distributor's credibility in the eyes of business supervisors and is also a key link in leveraging the enthusiasm of business supervisors.
  1. Compensation Design for Sales Representatives Shuttling through streets and alleys to promote to terminal bosses and purchasing managers, cutting boxes, organizing shelves, making displays, on-site promotion, distributing expenses, copying orders, handling expired products, and a series of trivial matters are all the responsibility of terminal sales representatives. The pressure on sales representatives continues to increase, and over time, it easily leads to numbness and lack of enthusiasm. The happiness or unhappiness of sales representatives, and their positive or negative attitudes, directly determine the speed of market development and the quality of customer relationships.
  1. Basic Salary Design for Sales Representatives Sales representatives are the position with the lowest entry barrier, worst treatment, and poorest stability in FMCG. Regarding the sources of sales representatives, they are either students just entering the industry or old representatives with rich terminal resources. But regardless of their identity, their common situation is low fixed wages, poor benefits and guarantees, and being the most easily overlooked position. In the FMCG industry, the wages of sales representatives are generally below 2000 RMB. If measured by individual input-output ratio, the average salary in this industry is far lower than that of sales personnel in other industries. This is why the sales representative profession is one with frequent turnover, the highest job-hopping rate, and the lowest loyalty. Therefore, this compensation design should basically focus on ensuring terminal stability and channel stability. If distributors, due to cost risk considerations or affordability reasons, are unwilling to raise the basic salary of sales personnel, they must provide incentives through commissions. This increases the expectations of sales personnel, avoids the feeling that their value is not recognized, which dampens enthusiasm, and in turn, affects the distributor's control over terminals.
  2. Commission Design for Sales Representatives Tasks can be used as indicators; after completion, a commission of 300-800 RMB can be rewarded, or even higher, depending on the distributor's strategic goals for a stage. During the distribution period, it can be based on the number of outlets, and during the sales period, based on sales volume. Of course, the task design should reflect the achievability of the task, something a salesperson can accomplish with effort. Of course, commissions can also be based on the enterprise's net profit, provided that the net profit is positive. For distributors with unstable business, using net profit commissions can easily be seen by sales representatives as the boss drawing a big pie, which may have a negative effect. If profitable, using net profit commissions, the commission rate should be relatively high, around 30% of the profit from the tasks completed by sales representatives or lower is reasonable. However, similar to commissions for business supervisors, for sales representatives, information is not transparent, and grassroots sales personnel find it difficult to grasp the distributor's profit situation, so this design is mostly not favored by salespeople, and enthusiasm is limited. Of course, for salespeople, adopting piece-rate commissions or sales-based commissions is also feasible. The piece-rate commission ratio is designed based on product price and turnover speed; low-priced products have low commissions, fast-moving products have low commissions, and vice versa. Especially for small and medium-sized distributors, adopting the piece-rate system is the easiest to operate.
  3. Benefits Design for Sales Representatives The benefits design for sales representatives mainly focuses on motivating daily business enthusiasm. In addition to conventional social insurance, communication, lunch subsidies, travel subsidies, and entertainment expenses, competitive rewards can also be added, such as sales star, monthly champion, outstanding employee, and enterprise advanced worker.
  4. Year-end Bonus Design for Sales Representatives This is mainly reflected in red envelopes and annual commissions. Especially for enterprises with stable teams and good development momentum, setting up certain opportunities for equity dividends can further stimulate the enthusiasm of sales representatives. However, for many small and medium-sized distributors, this may be out of reach, but from these benefits, one can basically see the strength of a distributor. In addition to sales personnel, there should also be compensation design rules for another part of back-office staff. The work of back-office staff is equally important as that of sales personnel. For example, a warehouse manager is related to the distributor's inventory turnover speed, while a copywriter or planner is related to making products known to consumers or driving the atmosphere in stores, ultimately converting to cash; the role of finance is also self-evident. However, the work results of back-office staff are difficult to measure with piece-rate or hard indicators like sales personnel. At this time, the compensation standard basically only considers two factors: one's own affordability and industry norms. Part of this compensation design is left to the HR manager, and part is flexibly controlled by the distributor. But no matter what, it boils down to basic fixed salary + bonus commission + benefits. Having a good compensation method also requires flexibility The above rules apply to most distributors, but there are significant differences among distributors. Distributors can be divided into start-up distributors, small distributors, medium-sized distributors, and large distributors. For start-up distributors, fixed salaries are mostly lower than market rates, but there are exceptions for resource-based entrants into the FMCG industry who have higher strength and can quickly organize teams and attract talent by offering higher basic wages than peers. If distributors lack financial strength, they should maintain flexibility in bonuses. For key staff or ordinary employees, consider option models to boost morale and provide a goal and expectation. Here, we need to eliminate an unrealistic tendency to draw big pies. No matter how good the options are, if they cannot guarantee the team's basic living needs, they will not have an incentive effect, because at this time, future expectations often depend not on the distributor's trust but on the distributor's personal quality and credibility. Sharing the little money earned in the early stages of entrepreneurship is the biggest test of a distributor's credibility. A major reason why the FMCG team is prone to losing morale and falling into chaos is that some distributors only consider their own profits and losses, neglecting the team's growth and income. Especially in the FMCG field, the employee team mostly relies on resource accumulation, experience, and personal connections. Therefore, regardless of size, building one's own mindset is often more important than the compensation system. The above suggestions are a systematic compensation design, but managing people's hearts is the most difficult. Therefore, in implementation, distributors should not be rigid and should dare to break the solidified compensation design thinking. Especially when dealing with employees with special skills, they should have the courage to break the framework. Especially for special positions or special talents, they should dare to pay higher salaries than the same position. The compensation system should suit most people, but also consider some special cases. The FMCG industry itself is one that requires daring to think and act, constantly breaking conventions. Welcome to discuss your views and opinions with the author via email: 1721842826@qq.com The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting 1000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore a new chapter of cross-border integration! November 8-9, 2017 Chongqing Yuelai International Conference Center, Xinyue Hall Registration is now open. Long press the QR code below or click "Read Original" to register. Add friend and note "Conference Registration" Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: 2016 "FMCG + Internet" Summit Forum -END-