Recently, I conducted research in several county markets with populations of 600,000 to 900,000 in Henan, Hubei, and Guangxi, and found that distributors with annual sales of around 10-15 million are almost all encountering growth bottlenecks. Sales declined to varying degrees in 2014 and 2015, and some veteran distributors have even seen consecutive declines for years. Through research, market visits, entering enterprises, and communicating with distributors, I found commonalities among distributors facing growth bottlenecks:

  1. Team: About 10 people, five or six salespeople, five or six vehicles; the rest are drivers. Core backbone are basically relatives; wages are not high but relatively stable.
  2. Internal management: Mostly the wife keeps accounts, rarely independent financial accounting personnel. Basically, no financial or inventory management software is used; the father and wife work together. There is a warehouse keeper, but accounts are often unclear, and warehouse management is chaotic.
  3. Products: Represent one or two main brands plus three to five small brands. Single brands typically have annual sales between 3-5 million, with no growth for years; in the past two years, main brands have begun to decline.
  4. Team management: Basically no morning meetings; performance pay is base salary plus commission. Base salary is very low, and commission varies by product. Some sales teams use terminal POS machines, a few use manufacturer terminal machines for terminal management, but most still rely on handwritten orders.
  5. Capital and revenue: Annual profit is not high but relatively stable; capital mostly comes from early accumulation, with low debt ratio and little financial pressure.
  6. Bosses: Mostly over 35, with low education but rich social experience and good local connections. They feel their management is adequate and believe the sales of their represented brands have reached the market's limit, making further growth difficult.
  7. Downstream wholesale: Long-term cooperative relationships with good customer relations; sales mostly rely on promotions or ordering meetings. Analysis: 1. High output per vehicle, but shipments are mainly volume products, with a low proportion of high-margin products. 2. Bosses socialize a lot, rarely go to the market, and dare not go because once they do, a pile of problems emerges. 3. Basically rely on selling goods to support; if products rise, they rise; if products fail, they fail. 4. A pile of expired goods in the warehouse, a pile of terminal customer complaints, and business performance is mixed. 5. No market management, no terminal action. Employees lack motivation, and bosses lack direction. 6. Cannot add people or vehicles; if added, they cannot increase sales, cannot manage, and cannot sell more. 7. Annual income is relatively high locally, so motivation for development is insufficient. The reasons for the above phenomena are mainly that food and beverage distributors mostly started from scratch, relying on a rapidly growing product to reach this scale. Bosses have low education, lack professional marketing and enterprise management experience, and operations basically follow the early entrepreneurial system with few changes, adding people where needed. Achieving 10-15 million with the existing model is already commendable. Distributors are aware that the current model cannot support higher sales scales and that change and professionalization are needed. It is not that distributors do not want to develop; some have tried introducing sales POS machines, hiring accountants, adding inventory management software, establishing standard rules and regulations, and strengthening sales team management, but these still cannot solve the team and sales bottleneck. They know they are not professional and that systematic change is needed, but making money is not easy, risk tolerance is low, and they dare not change easily. Like frogs in warm water, they know it is not working but have to wait for death... Conclusion: In the next three years, China's economy will continue to decline, operating costs will rise, and the internet's impact on traditional industries is huge. Soon, some distributors will begin to see losses and cliff-like sales declines. 10-15 million is the growth ceiling for food and beverage distributors. Distributors of this scale are like rowing against the current in a turbulent, winding river: if they do not advance, they retreat! Suggestions for distributors in this situation: Either transform or reform. Transformation is not deeply discussed here; most distributors have deep feelings for the distribution business that made them wealthy, and if the business is not too difficult, they generally do not change industries easily. This article offers some reform suggestions for distributors in this situation, hoping to help those with the above problems: For distributors with ambition to develop, reform should be slow rather than fast, and the number of reform projects and improvements should be few rather than many. Internal adjustments can be made in stages and planned. Specific adjustments generally fall into the following stages: Stage One: Sort out the financial accounting system: Hire independent financial accounting personnel, adopt standard financial and inventory management systems, clarify accounts, monitor accounts receivable, manage goods properly, form standardized and institutionalized financial information support forms, and make decisions based on financial data for purchasing and sales. Stage Two: Change market terminal performance: Add people and vehicles, use software for scientific route management of terminals, and build a flexible market service system based on actual market conditions. Change team performance evaluation system: Transform salespeople's functions from selling goods to selling services; the core is no longer just selling but doing actions that make consumers buy. Around this functional change, adjust the salary and assessment system. On the basis of the original base salary plus commission, add multiple assessment indicators such as outlet development, terminal merchandising, item distribution, and shelf display. Use sales terminal systems to effectively manage salespeople. Change management model: Select or hire excellent people as supervisors to assist the boss in team management, institutionalize all processes, and change target tracking from monthly to daily. Use computers, projectors, and other tools to increase management visualization, and use sales software to increase sales and monitoring efficiency. Quantify terminal service content to achieve standardization, traceability, and easy execution. After completing the above, distributors' operating costs will generally rise sharply, mainly due to increased operating costs, increased personnel and vehicles, and no significant profit growth. At this time, many distributors will not be able to sustain it. The core issue is that the purpose of reform is not to adjust the organizational structure based on existing sales; it is the basic work for future sales growth. Stage Three: Change product structure: Use the financial system to analyze and evaluate the input-output ratio of products, including capital investment, turnover rate, and profit margin. Based on the characteristics of main products, create product portfolios and appropriately increase main agency items. Establish a budget system: Distributors can make development budgets based on their financial strength and development goals, i.e., how much sales and profit to increase in fiscal 2016 on the existing basis. Can my existing products support this increase? How many more outlets, vehicles, and personnel are needed? Should I add brands? Can the existing organizational structure support this goal? All resources should be adjusted and supported internally around the budget system. After financial sorting, changing performance evaluation, and doing budget management well, once the three major systems are in place, distributors' sales growth can be effectively planned and developed according to actual budget indicators. Although distributor enterprises are small, if they develop, they need all the necessary functions. Of course, the core of all this is talent. Distributors' temples are small, and it is generally difficult to retain excellent marketing and management talent, which requires distributors to rapidly improve their own quality and management level. If sales below 15 million rely on selling goods, then above 15 million, it must be about seeking benefits from management. Here I provide a 38,000-word rules and management process template from a trading company with annual sales of around 50 million. Interested friends can reply "规章制度" to download. -END- Content Selection Reply with the following keywords to categorize and read related articles: Sales Supervisor, Second-Tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer 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, Channel Conflict, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Investment Attraction, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Pressure Stock, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Ordering Meeting, Team Management, Training, Work Report, Work Report.