Business is getting tougher! This is the common sentiment among many food distributors. From a professional perspective, operational methods and product selection are the two core elements of successful food distribution. Many distributors have good ideas and methods through continuous learning, but their performance remains mediocre, often due to mistakes in product selection. Below, we focus on how food distributors can sift through the dazzling array of options to find gold.

The following minefields must be avoided:

  1. Don't fantasize about blockbuster products; there are no more free lunches. Many food distributors hope to find a blockbuster product that sells like crazy without effort. In fact, this is a common human weakness—laziness—and is irrational. We are in an era of product explosion; the probability of a naturally born blockbuster is nearly zero. Any product becoming a blockbuster is inseparable from effort. There are no more free lunches. The only business where you can count money while lying in bed is prostitution.
  2. Don't blindly follow concepts; hype concepts no longer work. The phenomenon of a product selling out overnight due to hype only happens when supply is below demand. In the current environment of obvious oversupply, every brand is trying to outdo others, and everyone is creating concepts. Who would consumers believe? Moreover, the experienced 70s, 80s, and 90s generations are the main consumers now, and they are naturally good at creating concepts. When superficial tactics fail, marketing returns to practicality. The food industry has returned to competing on product strength. "A good product is truly good!" Remember this.
  3. Don't blindly follow trends; you might not even get a sip of soup. Distributors often look at each other, see what products sell well, and then find similar ones, but the results are often not ideal. The biggest profits always go to the first movers; this is an eternal truth. Following trends requires strategy. You must return to the essence and study the product: is this category driven by high promotional spending, or does it have inherent consumer demand? If it's a category driven by high spending, following the trend may result in the trend passing before your dream of wealth even begins.

Sharpen your gold-panning skills:

  1. Spot the potential for hot sellers. As mentioned earlier, there are no naturally born blockbusters, but a hot-selling product is significant for distributors—not just for profit growth, but also because hot products can help distributors enter more channels and enhance the company's image and status. Therefore, betting on the future is a key test of a distributor's wisdom and vision. This is important! Important! Important! Important things must be said three times! Hot sellers are most likely to occur when consumer needs are unmet, so products with hot-seller potential appear in two situations: first, new categories that meet the potential needs of most consumers; second, old categories that need upgrading because they no longer meet consumer needs. Both situations are rare, so don't give up if you encounter them. For example, cup milk tea was a new hot beverage category, and new flavors and high-quality braised eggs are upgrades of old categories.
  2. Follow the right backer. Stand on the shoulders of giants to leverage their strength. After selecting a product, you must evaluate the manufacturer's hardware strength, sales team, R&D capabilities, and other soft strengths. Not every manufacturer can bear the burden of growing a category. For example, small factories that only cut costs to compete on price are destined to fail, and large factories that don't treat the product as their main business will never have leaders available when you're in trouble. As is well known, the most profitable distributors in the apparel industry are those who follow the right backers, and the same applies to the food industry.
  3. Know how to evaluate product strength. Products with strong product strength don't worry about sell-through; in other words, even if you do poorly, you won't lose money. Distributors who know how to evaluate product strength have the least risk and are most likely to seize opportunities. Many distributors use old perspectives to look at new problems. For example, a few years ago, many people looked at 1-yuan small fish snacks and said, "These few fish fry selling for 1 yuan will be killed by 5-cent products sooner or later!" But we all saw the result. Evaluating product strength requires considering the following aspects: Quality is the key to life and death and an important factor in long-term profitability. Consumption motivation refers not to product appeal but to whether the product has universal consumption occasions, timing, or existing consumption habits. For example, ham sausage with instant noodles, peanuts with alcohol, and spicy food with herbal tea are all consumption motivations. With motivation, there is a market! Appeal is measured by whether the product's features are enough to induce trial purchases from unfamiliar consumers. Only with appeal is there a basis for promotion; otherwise, sales will fall into the quagmire of over-reliance on promotion. The cereal war is an example. Packaging and appearance: People rely on clothes, and products rely on packaging. Whether the product (physical) can directly attract saliva, whether the packaging material has texture, whether the appearance is beautiful or the design is distinctive—these are important. In a society that values looks, appearance determines treatment. You know what I mean.
  4. Ensure sufficient operational space. Many distributors equate operational space directly with gross margin and everyone likes high-margin products. This is a misconception due to lack of operational thinking. Operational space is an important indicator of whether a product can be developed and make money from the market. Distributors with ideas know that those who rely on manufacturers will have an increasingly hard time. Part of the price difference is used to resist competition. A reasonable price difference is enough; it's not that the higher the better. Products with absurdly high margins often have problems.
  5. Ability to respond to competition. When selecting a product, you must comprehensively examine the brand's ability to respond to competition. In other words, who are its main competitors? This is very important. For example, facing a super-large enterprise coveting the category, facing price wars from small factories without the ability to build brand image, or facing severe homogenization without the ability to innovate—these are all dead ends.
  6. Choose cheap or expensive? After determining a product category, you often face multiple brand choices. Many people prefer high margins, many prefer cheap, and some say expensive ultimately defeats cheap. Actually, all have merit. Master Kong's tea drinks defeated competitors with low prices and promotions; Youlemei's high margins once pressured Xiangpiaopiao; Apple phones sell on being expensive. So don't get tangled up in this issue. If you're stuck here, go back and review the previous five points.

Source: Houde Food This platform will soon organize several experience-sharing salons titled "How Distributors Should Operate B2B." We will invite some domestic distributors who have already been operating for a while to share their experiences and how they operate in their local markets. Interested distributors can long-press the QR code below to add the author's WeChat to participate in the sharing and exchange: When adding, please reply with the keyword: 操盘 - END- The best domestic FMCG distributor learning platform Focuses on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]