Outstanding payments and 'triangular debts' between manufacturers and distributors have largely been curbed with the development of the market economy and the improvement of the national financial system. However, distributor receivables in the channel, especially at retail terminals, are increasingly spreading, and this phenomenon has become a threat to the development of FMCG (Fast-Moving Consumer Goods) distributors. A large amount of retail terminal arrears leads to broken capital chains and difficult cash flow for distributors. But the characteristics of these retail terminals—numerous, scattered, and chaotic—result in, first, difficulty in collecting debts; second, many bad debts due to store closures, transfers, bankruptcies, and runaways. At the end of the year, when distributors calculate their accounts, they either find they have earned a pile of IOUs or that the money they thought they earned has gone down the drain. As a result, our distributors are suffering terribly. Why does this phenomenon occur? After extensive visits and analysis, the FMCG website has drawn the following conclusions: I. Causes of Distributor Arrears at Retail Terminals The reasons leading to distributor arrears at retail terminals are roughly as follows:

  1. Blind pursuit of channel flattening and deifying terminal success Market competition is becoming increasingly fierce, and upstream enterprises begin to pursue their own channel flattening. Under this general trend, enterprises do not guide distributors' channel operations based on each market's specific conditions, but always command all distributors in all markets to start their own channel flattening, the so-called downward shift of market operation focus. As a result, FMCG distributors' workload becomes overwhelming and operating costs rise daily. This work not only fails to bring distributors good business performance and profits, but instead leads to declining performance and profits. More seriously, originally relying on second-tier wholesalers and sub-distributors for sales, after operating retail terminals, they offend the original second-tier wholesalers or sub-distributors, causing sales to decline. This 'monopolistic' approach violates the basic model and path of commercial circulation, ignores the irreplaceable role of each circulation link, and leads market operations into a deadlock.
  2. Distributors lack effective management capabilities for retail terminals Through long-term channel operations, most FMCG distributors have developed the ability to manage second-tier wholesalers and sub-distributors. However, due to a lack of direct communication and understanding with retail terminals, most distributors have insufficient understanding of retail terminal characteristics, resulting in single and erroneous methods for developing, operating, and managing retail terminals. With changes in commercial circulation models, distributors' operations in super-terminal markets are even more passive. In addition, because retail terminal outlets have the characteristics of being numerous, scattered, and chaotic, the difficulty of development, operation, management, and utilization is high. Distributors and their staff only 'run single orders' to deliver goods, but do not know how to collect accounts and control them. This causes a large amount of retail terminal arrears to be lost amid bankruptcies, runaways, closures, and transfers.
  3. Distributors have not found the fulcrum to leverage retail terminals Everyone knows the lever principle: if you can find a fulcrum, someone can lift the Earth. But FMCG distributors have not found the fulcrum to leverage in the development and operation of retail terminals, resulting in passive operation of retail terminals. This blind operation can be said to be difficulties that distributors have created themselves. Due to a lack of analysis and judgment of retail terminals, or limitations of the products they operate—that is, the products themselves are not suitable for retail terminal market operations—they end up lifting a rock only to drop it on their own feet. During my visits, I encountered a distributor who complained bitterly. Because the second-tier brand he operated entered many supermarket terminals, and he spent a lot on entry fees, display fees, and barcode fees, but within less than two months he was squeezed out by first-tier brands. What made him even more miserable was that he developed more than 400 retail terminals in the urban area, gave display awards and display fees, and hired a group of people to inspect and guide the retail terminals. As a result, even though the product packaging was worn out, the products still did not sell. When he asked the retail terminal staff, they said: 'We cannot not sell the goods from the top second-tier wholesaler; otherwise, the top second-tier wholesaler will no longer deliver other products to us.' In the end, no matter how he worked, his products were still returned.
  4. Over-pressing goods on retail terminals, exceeding their payment capacity Pursuing distribution volume, thinking that once distributed it is sold, without recognizing that excessive distribution is actually a warehouse transfer; only products that are digested are 'net sales.' FMCG distributors must fully understand the actual product digestion capacity of each outlet. Otherwise, they can only use two methods to press goods: first, credit—'I unload the goods, you write an IOU, and I leave'; second, promotion—'If you want it, I'll give it to you, as long as you can take more of my goods.' In fact, retail terminal operations mainly pursue distribution coverage, not the volume received by a single outlet, because only with wide distribution coverage and high market penetration can products quickly achieve circulation and consumption. No matter how many products are distributed, if there is not enough consumer exposure, it is difficult for products to sell well. II. Prescriptions for Distributors' Retail Terminal Arrears In business, it may be impossible to have absolutely no arrears, but it is definitely possible to have no bad debts in the end. Distributors must do the following work well to prevent retail terminal arrears:
  5. Do not blindly develop and operate retail terminals; act according to your capabilities Before deciding to develop and operate the retail terminal market, FMCG distributors must ask themselves: Can I, or should I, develop and operate the retail terminal market? To answer this question, distributors must take stock of their resources. If they have the following three elements, they can proceed with retail terminal development and operation; otherwise, they must make a cautious choice. These three elements are: First, the products they operate have an advantage in retail terminals, or the products they operate are first-tier brands in the industry; Second, they have sufficient manpower, transportation, operational capability, and management capability; Third, the products promoted and operated have sufficient profit margins. It is worth reminding: no distributor operates retail terminals for long-term development and operation, especially our large circulation wholesalers. We develop and operate retail terminals more to form terminal retail prices and to achieve consumer awareness, recognition, and purchase of products as quickly as possible.
  6. Find the fulcrum to leverage retail terminals, and never use arrears as a price Retail terminals propose arrears mainly because they are not attracted to the products you promote, or the sales policies outside the product are not enough to attract their attention, or they cannot generate strong business desire. You only use arrears as a trump card to attack retail terminals when you have no other measures or methods. To be honest, it is often the person promoting the product who lacks confidence or does not know how to dig out the product's own selling points, leading to continuous concessions. Otherwise, promoting the product would definitely ignite the retail terminal with your own passion, thereby resolving the opposition between buyer and seller and coming together to reach a transaction. At the same time, positioning the consumer group of your own product is also a fulcrum to leverage retail terminals. If we can introduce the broad or unique consumer group of our product to retail terminal sellers, and then tell them how to introduce it to these consumer groups, this in itself is a good fulcrum.
  7. Unload goods in appropriate quantities, less per delivery but more frequent deliveries Because retail terminals mainly focus on retail and have limited strength, we must decide how much to unload each time and how often to deliver based on their actual sales capacity. Never put excessive inventory pressure on them. As long as we follow the principle of less per delivery and more frequent deliveries, I think retail terminals will not owe you money for ten or twenty yuan.
  8. Establish an account management system and responsibility system for retail terminals Problems are not scary; what is scary is not being able to discover problems or find the cause of problems. Similarly, having retail terminal arrears is not scary; what is scary is not having a complete retail terminal account management system and responsibility system. If we can establish an account management system and responsibility system for retail terminals, even if there are accounts, they will not cause losses or threats. So, how to establish an account management system and responsibility system for retail terminals? First, establish a 'prohibition' against retail terminal arrears, to prevent casual agreement to arrears; second, establish a responsibility system of 'whoever owes, whoever collects, and collect within a time limit'; finally, establish a special dynamic tracking system for retail terminal arrears, dynamically managing the arrears objects and whether arrears are collected as agreed, urging daily and demanding hourly. Reply with the following keywords to classify and query related professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Distributor Game, Product Slow Sales, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misunderstandings, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Orders, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Pressing Goods, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Debriefing Report.