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Distributors care most about profits. Every distributor is thinking about how to make their business sustainable, growing, and profitable. But reality is harsh: most distributors are troubled by slow sales growth.

Currently, distributors' sales growth faces several hurdles: the first is 10 million yuan; some distributors have struggled for years without breaking through 10 million. Then the second hurdle is 30 million, the third is 50 million, and the fourth is 100 million. Many distributors have exhausted their efforts but still cannot break through 100 million. So why is distributor sales growth slow, hard to break through, and often not reaching 100 million?

“Management loopholes, poor team execution, lack of good brands, bad sales models.” Perhaps every distributor has a different answer. When we don't do well, we must reflect: Why am I not doing well? What factors are affecting my performance? Below, I will analyze the reasons from four aspects:

Human Factors: The Ceiling of Bosses and Executives

Many distributors fail to grow big and strong. The root cause is not the product, the team, or market expansion, but the boss of the company. What kind of boss determines what kind of enterprise; how much capability determines how big the business. The boss is like a ceiling: the height of the ceiling determines the scale of your business and the height of your employees. The speed at which the boss learns and changes determines the scale of enterprise development. If sales haven't reached 100 million, the boss definitely has a problem.

Another important reason is the ceiling of the executive team. In China, there are two prominent phenomena in business.

The first is using “family soldiers” (relatives or trusted insiders). For the boss, family soldiers have three advantages: they are trustworthy, less likely to leave, and low cost. Now, half of distributors still adopt family management systems, which is detrimental to future development.

The second is “old faces.” In many distributors' core management teams, there are always old faces. No new people have joined the team for 3-5 years. Interestingly, when problems arise, these old faces often point out problems, while new people discover innovative and change-oriented methods. Old faces always find problems when answering questions, and the problems they mention are alarming; they transmit too much negative energy. Newcomers are different: to prove themselves, they constantly seek methods and opportunities to drive sales growth. Therefore, when hiring, bosses should bring in more talent, avoid absolute family management, and let fresh blood become the continuous driving force for company development.

Product Factors: How to Pick Gold from Old Products?

“People are the same, but the products they represent are different; ultimately, the product determines the person.” “Choice is greater than effort; make a good choice, not just any choice and then work hard.” Distributors should remember these two sentences. All distributors who have grown strong and big have their own core weapon: good products.

So, how to select good products and pick gold from many products?

Below, I will introduce a method called the “featured product determination method.” We all know that all products that sell well in the market follow two rules: the first is “first,” and the second is “unique.” The so-called “first” means brand: the first brand in each category usually has the largest market sales. Almost all distributors with sales over 100 million have first-line brands. Brand is the distributor's weapon; the weapon determines your future. In a county-level city in Henan, a distributor representing Wahaha achieved annual sales of 220 million yuan. This is the advantage of big brands.

The “unique” means that the product is not a brand, but its characteristics are very distinctive, still attracting consumers to buy. Every consumer has consumption beliefs, which come from “first” and “unique.” When selecting products, distributors must ask themselves two questions: first, “Does the product have unique characteristics?” second, “Can it make consumers remember you among many?”

The so-called product characteristics can be briefly summarized into four features: first, uniqueness of raw materials and functions; second, uniqueness of core technology; third, standard differentiation in packaging; fourth, differentiation in product shape. To make your product stand out and be remembered and recognized by consumers, it must possess at least one of the above points. Therefore, most manufacturers should also upgrade and innovate from these aspects.

When selecting featured products, distributors often have several major misunderstandings:

The first misunderstanding is “fake selling points.” A tractor with a BMW logo is still a tractor. There was a “walnut milk” drink on the market with the slogan “Smart choice, wise choice,” retailing at 18 yuan per box, with 20 cans per box. But based on the current walnut price of about 30 yuan per jin, this drink contains almost no walnut ingredients. Although it uses the slogan “smart, wise,” the product itself does not have this selling point, so this beverage brand has not succeeded to this day.

The second misunderstanding is “the selling point does not associate with the product itself.” No matter how well the product is promoted, if the slogan doesn't make consumers think of the product, it is the most failed. In most cases, consumers buy products not for the product itself, but for the selling point and feeling.

The third misunderstanding is “copying the selling points of first-line brands.” There are many companies making “old jar pickled cabbage noodles” in the market today, all with slogans like “authentic pickled cabbage, refreshing.” But because the “Uni-President” brand has already taken root in people's minds, other products find it hard to break through in the market no matter how they imitate.

The fourth misunderstanding is “quality does not support the selling point.” There is almost nothing of good quality and cheap in the market. If you want a BMW brand with a QQ price, it is almost impossible.

Market Capacity and Competitive Landscape: Category Space Determines Development Scale

What is market capacity? I once met a distributor in Henan who started business in 2006, representing only two small brands, and never saw improvement. This year, he represented a well-known brand of vermicelli. In the first month, he shipped a truckload and quickly exceeded 100,000 yuan. Due to brand influence, the product was quickly accepted by the market. He confidently said, “At this rate, I will break 1 million in a year.” But in the following months, his product turnover became slower and sales became difficult.

As we all know, the category space for vermicelli is very small. When distributors choose products, they must consider whether to choose a large category or a small category. In recent years, you will notice that many distributors of functional drinks, water, and milk have sales reaching tens of millions. So category space determines your market size.

The second point is the competitive landscape. As mentioned earlier, if the market capacity is small, sales cannot increase. But it is not true that large market capacity guarantees sales. Take plant protein drinks as an example: this category has been very hot in recent years, but competition is also fierce. Fewer and fewer companies can survive and develop sustainably; most face serious growth bottlenecks due to following trends and imitation. Secondly, you must consider whether the category you represent aligns with current trends. For example, carbonated drinks: Coca-Cola and Pepsi are large categories, but the growth of carbonated drinks has been slowing. Taking on carbonated drink products still faces difficult sales growth.

If the category is declining, individual efforts cannot change it. But there are some special phenomena: the entire category is declining, but one single product is rising. For example, instant noodles: the industry has seen slowing growth in recent years, and consumers define instant noodles as junk food. But one single product has developed particularly well in the past two years: Uni-President's old jar pickled cabbage noodles. This product led a new major flavor and deeply influenced the competitive landscape of instant noodles, with sales reaching 5.7 billion yuan last year.

Mechanism Factors: How Many Employees Believe in You Determines How Successful You Are

A distributor once told me, “In my company, there are 8 employees, but the 8 of them together are not as good as me alone.” The reason for this result is actually a problem with the company's mechanism. Many distributors complain every day: business is not moving, employees have no motivation, labor costs are rising, but the output is decreasing.

Here, I will tell an interesting example. We have all watched “Journey to the West.” In it, Sun Wukong caused havoc in heaven and defeated all the heavenly soldiers and generals. But when he went to the West to fetch scriptures, the biggest difficulty was that he couldn't defeat many demons, often asking for help from heaven. The most incredible thing is that these demons were the pets of the heavenly soldiers and generals, and the gods eventually had to come down to subdue them. Think about it carefully: there is a contradiction. Sun Wukong could defeat the gods but not the demons, and the gods eventually had to subdue the demons. Why?

These heavenly soldiers and generals are like those working for the Jade Emperor, while the demons below are like entrepreneurs, being their own bosses, so of course they are different from employees. Generally, distributors who cannot grow big have employees who think, “We are working for the boss. We have struggled with the company for ten years, started the business with the boss, and now the boss drives a BMW and lives in a villa, while we still earn a base salary of 2,000 yuan.” They are all thinking whether it is worth it. On the contrary, some distributors make employees feel that they are starting their own business, and employees are working for themselves.

For example, in Xinxiang, Henan, there is a distributor representing first-line brands like Yili and JDB. Last year, his sales reached 120 million yuan. As the business grew, he also made significant changes: he made his accounts public every month, including purchase prices, single-product gross profit, and profits, and divided the business into divisions with contracts, adopting an employee shareholding system. Profits were distributed to employees proportionally as rewards. Now his company is no longer his sole concern; every employee treats it as their own company, and sales growth has become faster. So good mechanisms create good employees and ultimately achieve good enterprises.

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About us: WeChat name: FMCG Distributor Professional Consulting Management Account introduction: 20 years of experience in FMCG distributor operations and management, specializing in distributor internal affairs.

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