In 2016, the state advocated "mass entrepreneurship and innovation" and introduced a number of favorable policies to promote entrepreneurial development. All industries have shown strong growth momentum, with asset-light operating models such as internet and micro-commerce emerging one after another. Today, I want to focus on how early-stage FMCG distributors can walk steadily and well under the macro-favorable policies.

I. Sources of FMCG Distributors

Analyzing the current situation, there are generally three types of people who become distributors:

First, factory sales personnel transitioning to become distributors. Their advantage is that they understand the manufacturer and can grasp the manufacturer's needs to obtain resource support. They also have a wide network of friends and certain information sources. The disadvantage is that they need to quickly adjust their mindset; previously they were mainly assessed on performance, but now they need strong cost awareness and improved comprehensive operational income and expenditure management.

Second, delivery personnel who previously worked for an established distributor become distributors themselves. This group generally believes that their former boss earned a lot and wants to start their own business to earn more income. Their advantage is that they have familiar customer relationships in the downstream sales channels and strong execution ability. The disadvantage is that their ability to coordinate and operate at the management level is weak; they lack methods for managing personnel, customers, warehouses, cash, etc., and they cannot well understand the manufacturer's strategic approaches.

Third, those who transition from other industries. They generally believe that the FMCG industry is not saturated and that people need to consume daily. Their advantage is that they have certain funds and are bold in thinking and doing. The disadvantage is that they do not understand the industry, often take methods from others to use, and may rely more on trial-and-error management.

II. Initial Practices for New Distributors

Regardless of which aspect they transition from to become FMCG distributors, they are all smart people with ideas. This industry has two aspects to grasp:

One is hardware: delivery vehicles, warehouses, funds, etc.

The other is software: that is, the docking work of the upper, middle, and lower levels:

Upper means communication and negotiation with upstream manufacturers; middle focuses on management; lower means the construction of downstream channel sales. As for how to deal with the upper level, according to the analysis of hardware facilities, you can choose to operate products from small and medium-sized manufacturers (large factories are not easy to cooperate with), and find three products to position. Do not define solely by sales volume, but pay attention to profit.

At this time, it is not a matter of development, but how to solve the problem of survival. Therefore, you must seriously put the word "profit" first.

For the lower channels, do not seek a wide and comprehensive approach, but be precise and accurate.

Generally, there are five major sales channels in a region: KA, circulation, group buying, OTC, and special channels (schools, internet cafes, restaurants, hotels, KTV, etc.). When acting as an agent for products of small and medium-sized enterprises, the initial channel introduction should focus on actual sell-through, not on image and display.

Small and medium-sized enterprises generally give fees based on sales volume, while large enterprises have assessment requirements for image building. For example, if you act as an agent for instant noodles with dry-eating noodles as the entry point, choose special channels (schools, internet cafes) as the key breakthrough. You can follow the fifteen-character policy: "Grasp special channels, continue publicity, do terminal work, activate second-tier distributors, and hold ordering meetings." Schools gather thousands or even tens of thousands of concentrated people. When doing promotions and buy-one-get-one-free offers, you will quickly see sell-through and returns. Moreover, the invested funds are relatively concentrated and focused, with obvious effects. After establishing a "base" market, you can see the product's strength and also have a stable rear channel.

Even if some slow-moving products appear after large-area distribution, they can be handled to maintain a controllable situation. During operation, you must have cost awareness. Investment is not scary; what is scary is investing without knowing whether there is a return. Investing in channels with sell-through is the best approach.

III. Regularly Conduct Product-Consumer Interactions

In a market with homogeneous and abundant products, you must clearly know that distribution rate ≠ sell-through rate, and sell-through rate ≠ reorder rate. Therefore, according to the attributes of the products you represent, you should persist in carrying out ground promotion activities, i.e., tasting and buy-one-get-one-free activities. You can set aside time each month to do eight activities, choosing Saturdays and Sundays. You can choose to carry them out in the residential areas or recreational areas of the target consumer groups. Do not just push products to channel customers, but continuously work on consumer purchases, letting consumers know, recognize, and approve your products, and buy from channels to drive product sales. This work must be persisted for at least three months before there is a response in the channels, because small and medium-sized enterprise products have weak appeal, and tasting and buy-one-get-one-free offers will have better results.

IV. Be Psychologically Prepared for Hard Work

Entrepreneurship is a matter of outward glory but enormous inner sacrifice. Planning, decision-making, and execution bear all consequences, because you cannot afford to hire people for those positions, so you must face it yourself. Do not think it is easy. Every choice determines the next step. In terms of mindset, you must know that it takes half a year to see benefits, one year to have small achievements, and three years to achieve success. You must not engage in gambling behavior.

V. Consider and Care About Family Feelings

Entrepreneurship is not something that happens overnight. Before starting a business, you must consider the family's endurance. Entrepreneurship is for a better quality of life, not to make you rush forward regardless of your family.

Finally, suggestions for entrepreneurial distributors:

1. Do things according to your financial capacity 2. Do not seek completeness, but seek stability and precision 3. Be able to accept temporary failure 4. Entrepreneurship is a life, not a revolution 5. Only by surviving can you talk about development and planning

I hope these suggestions are helpful to entrepreneurs. The development process has three stages: the first stage is doing everything, even if it means channel crossing or dumping goods, to ensure survival; the second stage is doing some things and not others, choosing matching products to operate, looking a bit further; the third stage is not doing some things but doing others, needing to understand giving and taking, seizing trend products, and then you can move up a step.

If even one point or one sentence above is helpful to you, I feel that writing it is valuable!

2016 ~ Surviving is success!

-END-

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