China's vast market means no single company can reach every corner with its own organizational capabilities alone. The shift from employment to partnership models—namely regional contracting—is an inevitable trend for efficient, low-cost channel coverage in FMCG. In fact, many domestic companies are learning from Jinmailang's "Four-in-One" model, but most are half-paralyzed or have completely disappeared. Based on my personal experience, here are nine common pitfalls in implementing regional contracting.

Unclear and Mismatched Rights, Responsibilities, and Interests in Regional Contracting

There is a question: "Who implements regional contracting? What are their rights? What are their responsibilities? What are their interests?" If these three points cannot be answered or clearly defined, no one will be willing to follow. An excellent distributor, even during the recent economic slowdown, has continued to grow in scale and capability, forming its own distribution system. The boss, manager, and salespeople are no longer in an employment relationship but a partnership model.

Let's first analyze the three key rights of different roles in a distributor's operation:

1. Distributor Boss Power: Product rights. The main responsibility of the distributor boss is to interface with brand owners, select products, and handle everything related to those products: a. Payment, shipping, warehousing, and delivery of products b. Advancing market expenses such as display fees and channel fees on behalf of brand owners c. Coordinating with brand owner personnel, managing manufacturer-distributor relations, and maximizing benefits while ensuring smooth cooperation Responsibility: Product positioning + sales support tools + distribution and sell-through methods + overall team cooperation willingness Interest: What should the profit share be?

2. Distributor Manager Power: Operational management rights. The main responsibility of the distributor manager is to efficiently operate around the market and manage personnel efficiency around the sales team: a. Around the market: improving sales revenue and operating profit through factors like distribution rate, profit margin, and competitive landscape b. Around the team: organizing daily sales work and improving personnel efficiency Responsibility: Implementation standards + execution authenticity + not just simple checks + achievement incentives Interest: What should the profit share be?

3. Distributor Salesperson Power: Sales and maintenance rights. The main responsibility of the distributor salesperson is route visits, order closure, customer relationship maintenance, after-sales support, and all other specific tasks around terminal outlets. Responsibility: Targeted outlets + displays that align with sell-through logic + regular and reasonable visits + communication-based sell-through

The above sets the tone for "regional contracting." Setting the tone is the core of the model. With a clear tone, you can: define goals, work proactively, and take responsibility.

Understand the Underlying Logic of Partnership Business Failures

1. Reasonableness of Profit Distribution Profit distribution is a complex art. The essence of "regional contracting" is a partnership business. The biggest killer of partnerships is unfair profit sharing. This requires the company to take the lead. Given China's vast territory and significant market differences, measures must be tailored to local conditions, not one-size-fits-all. At the same time, understand the distributor's business, follow the principle of more pay for more work, and convince with reason.

2. Transparency of Profit Distribution Make profit distribution transparent. Another killer of partnerships is the inability to disclose finances in real time. Who earned how much? How much each day? It's best to keep everyone informed at all times, because distrust from suspicion is the biggest internal friction. This requires support from terminal systems. Jinmailang's approach is a daily wage system.

Unclear Market Positioning Across North and South

Any model needs an adaptation period in the market, and no model can fit all markets. Therefore, give it time and room for adjustment. Take Jinmailang as an example: The "Four-in-One" model emerged in 2011, and the first two to three years were spent exploring and refining. This poses a severe test for the company's market and talent reserves. Moreover, "regional contracting" is only a tactical refinement; it needs strategic support from the company, otherwise it is like a tree without roots and cannot last long.

Examples: 1. Significant sales differences between north and south: This indicates differences in brand power and channel power. The initial income of grassroots contractors will also vary greatly, and local consumption levels must be considered. Therefore, support and assistance cannot be one-size-fits-all. 2. Significant personnel differences between north and south: Southerners are good at thinking, while northerners are good at doing. Therefore, work content and intensity cannot be one-size-fits-all. 3. Significant market differences between north and south: Southern CVS (convenience stores) are more developed than in the north, and most CVS require fees and credit terms, which small contractors cannot afford. Therefore, regional division rules cannot be one-size-fits-all. 4. Differences in competitive landscape between north and south: Each competitor has its own tactics and market strategies. The timing and amount of resource investment cannot be one-size-fits-all.

No Clear Profile for Recruiting Partners

Recruiting small bosses must have precise target audience positioning. The recruited small bosses must have a survival playbook. This is the most fatal flaw of "regional contracting": to meet assessment targets, companies convert existing employees into small bosses, which is also the biggest cause of attrition. Workers accustomed to five social insurances and one housing fund cannot become small bosses. The running of a rabbit is different from that of a wolf.

Here are a few points: 1. Clearly define the role and responsibilities of small bosses a. Responsible for outlet development and visits according to visit standards and task assignments from superiors b. Enjoy sales profit sharing and incentive allowances through display management and sales terminals c. Use the system daily for store visits to achieve process and performance targets d. Clarify four key tasks: new outlet addition, store visits, display management, and product sell-through With the above definitions and clear direction, team recruitment and operations become easier. Details should be tailored to reality to ensure partners meet the company's expectations.

2. Personal qualifications required for small bosses The core principle is an entrepreneurial mindset. All necessary conditions should be built around entrepreneurship. Define what kind of person is suitable for entrepreneurship and what conditions they need. a. Willing to endure hardship: Dare to face market changes and unknowns, have a sense of responsibility, not be timid or retreat. b. Want to earn more money: Around 30-40 years old, with a family, children in school, dreams for the future, not wanting to be constrained by a small circle, wanting to be their own boss. c. FMCG business expertise: Have market operation concepts, can leverage previous experience, plus company training, use the most suitable tools, and join the company's market expansion. d. Ambition to grow big: Dare to be first, first come first served, with the idea and determination to replace upstream distributors. e. Proficient in systems and people management: Manage cost input and performance output, use business thinking and digital tools to manage the business, and lead the sales team. f. Have small capital and can calculate: Willing to invest capital to buy goods for market operations, and calculate related expenses and income.

3. Where do these entrepreneurial people come from? Look at Jinmailang's positioning of small bosses:

Recruited People Lack Proper Survival Guidance

Recruiting people is the first step. I understand that many companies start "sheep-herding" management after recruiting small bosses. I suggest clarifying five things: 1. Training: Understand what to do + learn how to do it + what to gain in the process + what results to achieve 2. Expansion: New store entry + product introduction 3. Sell-through: Target outlets + standard displays + regular visits + product sell-through 4. Balance: Operating income + operating expenses 5. Departure: Reserve + check + handover

In summary, instill a mindset: Entrepreneurship is not easy, not everyone is suitable, and life doesn't necessarily require entrepreneurship to prove value. Entrepreneurship is a high-risk life step, especially now. You will encounter various troubles on the entrepreneurial path. But no matter what, once you choose entrepreneurship, you should stick to your ideas and actions, persist even when it's hard. Only by persevering and exploring can you see the rainbow after the storm.

No Rigorous Market Research Before Launching "Regional Contracting"

From my communication with managers of "regional contracting" companies, I understand that many operate "in the dark," without researching the target market before launch. For example: market competition landscape, comprehensive strength of competitor distributors, market operating atmosphere, etc. They don't choose which market to launch first and which later. What is the standard? Instead, they aim to meet "quantity" targets, relying on brand power to do business. How can they not fail? Here are some points for reference:

1. Research the wholesale market Through visits to wholesale markets, you can basically determine: a. Which of your products have brand power, and which products' channel profits can meet the distribution needs of the local market, giving you a preliminary judgment on product selection. b. The primary task for current recruitment is gift boxes. How to do it? Who will do it? What should it look like? You can have a rough idea. c. You can have a preliminary understanding of target distributors, focus your energy on visiting them, and even have initial ideas for communication scripts when visiting. d. Some wholesalers express strong interest in our products and are willing to cooperate. When communicating with distributors later, you can bring resources, greatly increasing cooperation sincerity and opportunities. This is the value of visiting wholesale markets. So, "paying respects" at wholesale markets is very necessary.

2. Research channels The significance of channel research is to first have a hypothesis (channels defined by the company based on product attributes), then use market information and consumer behavior to verify or overturn this hypothesis. Insight comes first, judgment follows. The key is that judgment requires the courage to admit "I was wrong."

3. SWOT analysis in market research Where are the opportunities? Where are the threats? What are the strengths and weaknesses? Analyze thoroughly. This is the "eyes" of operating "regional contracting."

No Market Coverage Plan After Launch

Jinmailang Chairman Fan Xianguo often says about the Four-in-One: "No outlets, no sales; no vehicles, no outlets. The survival foundation of small bosses is vehicles and outlets." On this point, many companies implementing "regional contracting" seem not to have put in enough effort.

1. Market layout planning Market layout is the prerequisite for outlet coverage. Of course, market research should be done beforehand. This involves factors such as the size of the area, regional division, route segmentation, manpower allocation, and implementation timeline, ultimately leading to a route planning and promotion plan.

2. Blank outlet breakthrough plan a. Define channel attributes b. Support for entry costs for outlets with different channel attributes c. SKUs to enter and suggested order quantities for each SKU d. Display standards and requirements e. Personnel incentive plans f. Sampling and tasting events

3. Systematic development and follow-up visits Outlet development and follow-up visits should be orderly. A common drawback of developing outlets first is focusing solely on development, leading to poor follow-up matching, like a bear picking corn—picking one and dropping another. So design a development and follow-up system.

4. Calculate market expansion demand Overstocking is the biggest killer of new product channel confidence. For new products in new markets, avoid overstocking at all levels, from distributors to terminal outlets. Aim for goods to just sell out or be slightly short. Therefore, demand calculation is crucial.

In summary: After launching the market, the first priority is to quickly and systematically advance outlet layout based on market research, and make a coverage plan. Small bosses believe because they see. If the first three months don't show results, they lose hope, making future work much harder.

Standardized Operations and System Operation for Small Bosses

Regional contracting cannot be "contract but not manage" or "replace management with contracting." Otherwise, it's just formal contracting. For smooth implementation, contractors must be given a complete set of methods to see the hope of wealth and reap the fruits of implementation, thereby achieving further market growth.

Earlier we discussed the outlet coverage plan. Next, small bosses in regional contracting can only achieve their goals through standardized operations and system operation.

1. Provide methods for performance improvement and follow-up measures For performance improvement methods, refer to my previous articles. Let me briefly mention three key points: a. Choose the right products and enter the right outlets: Actions around outlets include targeting outlet attributes and in-store SKUs & quantities b. Vivid displays: Actions around displays include category-related displays and specific multi-point displays c. Build consumption scenarios and consumer awareness: Actions around target consumers include digital profiling of target consumers and specific execution of promotional activities

Take Jinmailang's Boiled Water as an example: A market wants to promote Jinmailang Boiled Water, with a target of 10,000 cases per month. This is the first step, and also a goal for small bosses to strive for. After setting the goal, provide small bosses with methods to achieve it. The method could be requiring all outlets selling Boiled Water to place it right next to Nongfu Spring on shelves or in coolers, and use visual aids to explain the difference between boiled and raw water, highlighting the differentiated advantage, to shake Nongfu Spring's consumers. This is the second step, providing a feasible method to achieve the goal. With the method, establish a matching mechanism. The purpose is to stimulate small bosses' initiative. The principle is to turn management into incentives. Implementation could be: 2 points (convertible to RMB) for placing next to Nongfu Spring and following the visual requirements. This is the third step, ensuring execution of the method. Finally, set inspection rules. Managers are incentivized for achieving the target of 10,000 cases per month; small bosses are incentivized for following process indicators. If not achieved, negative incentives may be applied. This is the fourth step, the final step of the cycle. Only by ensuring the smooth operation of this cycle can performance be truly guaranteed, and managers won't just focus on results without caring about the process.

2. At this point, the mobile terminal management system for business operations must be mentioned To achieve effective control of covered outlets and rapidly improve operational efficiency, digital tools are essential to achieve two types of management: 1. External: Process management for regional contractors a. Real-time understanding of covered outlet information b. Real-time understanding of outlet display information c. Real-time understanding of outlet display cost investment results 2. Internal: Order process management a. Real-time understanding of outlet order indicator information b. Real-time understanding of inventory indicator information c. Real-time understanding of actual sales information

3. Outlets, displays, visits, and sell-through remain the core of work Summary: Many distributors and internal staff of companies using the "regional contracting" model report poor implementation, no improvement in market growth pressure, and extremely poor personnel stability. One of the root causes is the failure to standardize small boss operations and system operation.

The passion and attitude of small bosses in regional contracting are important, but more importantly, they need to be provided with methods, guidance, and support for implementation. Only then can we effectively prevent the bad situation of "contracting in form but not in spirit."

Lack of Online-Offline Interaction

It's No Longer the Four-in-One Era

Jinmailang's Four-in-One was launched around 2011, when online models were still in their infancy, so focusing purely on offline was sufficient. Now, with the penetration of internet thinking, the market has undergone tremendous changes, and consumer purchasing methods have changed accordingly. Therefore, "regional contracting" should begin exploring a model that integrates online and offline for small bosses.

For example: The mobility of small bosses with vehicles can effectively provide "home delivery services." Recently, I collaborated with a mini-program company on a "Three Cloud Model: Cloud Merchant, Cloud Store, Cloud Customer," which can effectively reach consumers and is efficient and energy-saving for new product promotion. These methods can give small bosses an extra edge.

Final Thoughts:

The above is based on my communication with managers of some "regional contracting" companies. These are personal views and open for discussion. Any model's promotion will encounter ups and downs. Short-term setbacks are not a problem. When Jinmailang promoted the Four-in-One, it also brought pain to the company, marketing team, and distributors. I particularly agree with a saying that Jinmailang Chairman Fan Xianguo often teaches us: "As long as the direction is right, don't fear the distance."