30+ industry experts, 100+ B2B platform founders, and 800+ manufacturer and distributor friends gathered in Fuzhou to discuss the internet transformation of the FMCG industry. Distributors are now called "precision distributors," but facing strong manufacturers, terminal dominance, and profit-driven small shops, the pressure on precision distributors is increasing day by day. As a text message puts it, "outwardly glorious, inwardly anxious." With the double festival approaching, the old topic of boosting sales in the peak season has become a common greeting among distributors and manufacturers. Below is a phone call between the author and Lao Gao: Li Manager: Lao Gao, have you stocked up? Lao Gao: I've stocked 2 million. Li Manager: You usually sell only 500,000 a month. Can you sell 2 million? Lao Gao: I know I can't, but I have to stock up. Here's a real recording of a moment in a phone call with General Manager Zhang, a distributor for a certain brand: Manager Wang of a certain brand (hereinafter referred to as Wang): Zhang, the double festival is coming. Are you busy lately? Distributor Lao Gao (hereinafter referred to as Gao): Manager Wang, I'm still at the warehouse arranging for loading. The festival is coming, and we have to ship tomorrow. What instructions do you have? Wang: Lao Zhang, take care of yourself. Loading is a small matter; you can delegate it. Why do it yourself? Lao Zhang: It's already past 8 PM. I came to check on things; everyone is working hard. Just tell me what you need. Ha ha! Wang: Lao Zhang, how much can you stock this month? Lao Zhang: (answering off-topic) 1 million. Wang: What? Only 1 million? That's too little. This month you need to stock at least 2 million to ensure you complete the annual target! This is the double festival peak season. If you don't stock up now, when will you have the chance? Zhang: Manager Wang, you know the market situation. For our products, I originally estimated I could stock over 1.8 million this month, but low-price channel diversion has come, with prices close to factory prices. Look at the warehouse now—it's full, and we can't ship out. What can we do? Wang: Aren't you loading now? Sales are good, right? Zhang: We're busy, but we only ship out tens of thousands of yuan a day, mostly to small convenience stores and retail customers. Shipments are too slow. Wang: Yes, slow shipments and low-price diversion—I know all that. But Lao Zhang, difficulties exist, but we must push through. You failed to complete last month's target, and you promised to complete this month's target. Now you're saying there are problems again. Lao Zhang: Look at our actual situation. Once diversion comes, my terminals are dead; they don't want goods. I'm worried to death. Wang: Diversion isn't just in your area; other areas have the same situation, but they can exceed their targets this month. Only you have many excuses. Fine, I don't care how you do it, but you must ensure you complete this month's target. Otherwise, this month's market support fees will be canceled, and we'll consider whether we can continue cooperating. You decide for yourself. Then he hung up. Lao Zhang: Hello? Hello... He awkwardly turned off his phone, calculating that if he didn't pay for goods, he would lose about 50,000 yuan in display fees he had already paid this month. That's a significant loss. He had worked hard for years to distribute this brand. If cooperation really ended, what would happen to his company? If he stocked another 1 million in goods, it would inevitably cause inventory pressure, extend the shelf life, and the loss would be unimaginable. On the left is a cliff, on the right a precipice. What choice will Lao Zhang make? From the above conversation, it's clear how difficult the situation is for distributors facing strong manufacturers. How can distributors avoid being forced to stock up? In my opinion, all avoidance actions are based on the distributor's control and understanding of the terminal market. The following is a practical analysis: I. Reasonable and Justifiable Stocking Excuses and Avoidance Strategies Excuse 1: Seasonal stocking for the peak season. FMCG products have little differentiation, but sales fluctuations between off-peak and peak seasons are very obvious. Seasonal stocking for the peak season is natural. The key here is the quantity. Several methods can be used: First, the same-period comparison method, comparing sales with the same period last year or the previous festival. Second, the natural growth method, considering national economic growth points, local consumption growth points, and year-on-year growth compared to the off-peak season. Third, the promotional resource estimation and pull method. By using these three methods, distributors can calculate a relatively accurate stocking quantity, avoiding impulsive overstocking during the peak season, which could lead to inventory pressure and unnecessary losses. Excuse 2: Stocking before price adjustments. In recent years, with rising raw material costs, the FMCG industry has seen a wave of price increases. However, price adjustments are sensitive, and manufacturers are cautious. It's understood that hard price adjustments (i.e., adjustments without any pull or change) are rare. Usually, they change packaging or specifications to provide a reason for the price adjustment, making it acceptable to consumers. In such cases, it's important to understand the situation. If it's a hard adjustment, you can stock up; if it's a disguised adjustment, it's not advisable to stock up. Excuse 3: Stocking with purchase gifts or benefits. When facing profit temptations, distributors should first consider the costs. If the cost is too high, even if it means giving up temporary high profits, they must stay clear-headed to avoid stockouts and overstocking. Excuse 4: Promotional pull, requiring more of a certain item this month. When facing specific, visible manufacturer support, distributors often get excited and blindly order goods. At such times, it's better to calm down, not act rashly, and analyze the promotional pull effect systematically based on their own sales data before ordering, to avoid inventory buildup. Sometimes it's hard for distributors to refuse the above four stocking requests. Here, I emphasize that I don't oppose these four types of stocking, but I don't advocate them either. To avoid overstocking, you must know the flow, volume, and sell-through cycle of goods. Only then can you avoid overstocking and stockouts. II. Unreasonable Stocking Excuses and Avoidance Strategies For example: Monthly sales are 100,000 yuan, inventory is already over 300,000 yuan, but the manufacturer still demands completing a 300,000 yuan target this month. The following situations often occur: Zhang Fei type: "You must stock up and complete the task, or we'll change distributors." This approach is usually used by newcomers to the marketing industry or people from other industries who have had short-term training and follow orders without technical skill. There are also experienced salespeople, but they usually don't say harsh words; if they do, they are prepared. Avoidance: Only by controlling the terminal can you have a say and communicate equally with strong manufacturers. Understand market sell-through. Be soft but firm, use the word "delay." Don't say you'll stock up, don't say you won't, just don't pay, but show that you're trying hard to stock up. Build terminal customer files, know who you'll sell to. If they really want to change distributors, you have evidence to convince the manufacturer: "My market, my terminals are in my hands. My distribution coverage is high, but goods aren't moving." This approach is passive and may lose face, but at least it avoids direct conflict and preserves your distribution rights for now. Liu Bei type: "If we don't complete this month's task, the company will fire us. Please, for the sake of our long cooperation, complete the task this month." Avoidance: Turn the tables on them. Address them respectfully as "leader," reason with them: "Look, we can only sell this many cases of this single product each month; we have this many cases in inventory; if we stock more, we won't sell them this year and will have to throw them away. Forget it, I won't stock this month. But our relationship is good. If the company gives you a hard time, I'll talk to your boss and make sure you don't get fired. As for the lost salary, your salary is less than 100,000, right? If I sell these goods, I could even pay you some salary." The salesperson will feel warm inside, but would they dare take the distributor's salary? And if you don't pay, would they ask? This way, you preserve the relationship and give the salesperson face, making them feel like an insider. Insiders naturally consider the pressure of inventory buildup. Zhuge Liang type: "How much inventory do you have? How much can your terminals sell? If I give you some promotions, how much more can you sell? So how much should you stock?" Avoidance: This type is hard to refuse because the salesperson has detailed data on your outlets. If you don't stock up, you have no reason. But if you control the terminal and know the sales of downstream customers and potential consumer demand, you can verify whether the salesperson's claims are true. You can also assess how much of your inventory the proposed promotions can move. Based on your understanding, you can argue your case and explain why goods aren't moving. Your professionalism will convince the salesperson. In summary, distributors and manufacturers are both interest communities and have their own needs. For example, manufacturers want market, then sales, then profit. Distributors want profit, then sales, then market. The content is the same but the order is different, so the short-term goals differ greatly. This directly explains why manufacturers push stocking and distributors resist and avoid it. Of course, there are many other ways to avoid stocking; these are just my personal views. Theme Review: To avoid forced stocking, you must control the terminal market to ensure no stockouts and no overstocking. Only by regularly stocking can you ensure customers get fresh goods and maintain continuous profits. New Food Era · New Distribution — 2016 China "FMCG + Internet" Summit Forum — This is a grand event focused on how the FMCG industry channels will transform under the trend of Internet+ Agenda 09:00-09:30 Registration 09:30-09:35 Opening by host 09:35-10:05 2016 China FMCG Industry Trend Analysis Report — Zhao Bo 10:05-10:25 Transformation Strategy and Path for FMCG Enterprises — Liu Chunxiong 10:25-10:45 Opportunities and Challenges from FMCG Channel Reform — Liu Zhao, CEO of Waiqin365 10:45-11:25 Alibaba Retail Link Full Empowerment — Guo Kunkun, Alibaba Retail Link 11:25-12:00 Roundtable Forum — Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Distributor Transformation: City Distribution Trends — Wang Qi, CEO of Weijie City Distribution 14:00-14:30 Roundtable Forum — Why Should Distributors Transform into Logistics? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy — Su Xiaoxin, VP of Zhongshang Huimin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy — Yang Lixiang, Zhanghe Tianxia (Topic TBD) 15:30-16:00 Supply Chain Finance as a Lubricant for B2B to Drive Traditional Business — Chen Xian, CEO of 51 Order 16:00-16:30 Principles and Approaches for 2B Investment — Xu Xiaoping, Founder of ZhenFund (Guest TBD) 16:30-17:00 Small Retail, Big Opportunity: China's Retail Transformation and Upgrade — Wang Jianfeng, GM of E-commerce Division, Yurun Group 17:00-17:30 Roundtable Forum — Who Will Be the King in FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner For manufacturers and distributors looking to transform, this grand event is not to be missed. Interested friends can long-press the QR code below or click "Read Original" to register. Registration: Long-press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]