---
title: "How Distributors Can Seek Efficiency from Management"
description: "After years of development, as company scale expands with increases in sales, products, personnel, and vehicles, large distributors in the increasingly competitive FMCG industry must strengthen management to increase profitability. This article refers to large distributors located in first- and second-tier markets, with numerous brand resources, many vehicles and sales staff, and annual sales exceeding 100 million yuan, operating as companies. Despite company scale and sales growth, their actual profits have not increased correspondingly. Case: In a prefecture-level city in Hebei, Boss Zhang's company operates over a dozen beer and liquor brands, with a warehouse of over 2,000 square meters, nearly 100 employees, and more than 20 delivery vehicles. With sales exceeding 100 million yuan, operating costs have risen faster than performance, leading to shrinking net profits despite growing business."
author: "师顺宽"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-11-08"
language: "en"
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# How Distributors Can Seek Efficiency from Management

> After years of development, as company scale expands with increases in sales, products, personnel, and vehicles, large distributors in the increasingly competitive FMCG industry must strengthen management to increase profitability. This article refers to large distributors located in first- and second-tier markets, with numerous brand resources, many vehicles and sales staff, and annual sales exceeding 100 million yuan, operating as companies. Despite company scale and sales growth, their actual profits have not increased correspondingly. Case: In a prefecture-level city in Hebei, Boss Zhang's company operates over a dozen beer and liquor brands, with a warehouse of over 2,000 square meters, nearly 100 employees, and more than 20 delivery vehicles. With sales exceeding 100 million yuan, operating costs have risen faster than performance, leading to shrinking net profits despite growing business.

> After years of development, as company scale expands with increases in sales, products, personnel, and vehicles, in the increasingly competitive FMCG industry environment, large distributors must strengthen management to increase efficiency.
This article refers to large distributors located in first- and second-tier markets, who after years of development, control numerous brand resources, have many vehicles and sales personnel, and operate as companies with annual sales exceeding 100 million yuan. As company scale and sales increase, their actual profits have not correspondingly increased.
> **Case**
>
> In a prefecture-level city in Hebei, Boss Zhang's company operates over a dozen brands of high-, medium-, and low-end beer and liquor, with a warehouse of over 2,000 square meters, nearly 100 employees, and more than 20 delivery vehicles. They have dozens of distributor and secondary wholesaler customers in the urban area and surrounding counties. With company development in recent years, sales have exceeded 100 million yuan, while various operating expenses have risen simultaneously, even with cost increases outpacing performance growth. As a result, the business appears to be growing, but actual net profit is decreasing. Boss Zhang is deeply troubled by this...
> **Problems Encountered During Company Development:**
**1. Unclear Product Line Strategy**
Distributors know that "best-selling products are not profitable, profitable products do not sell well, and products that are both profitable and sell well are rare." Although Boss Zhang operates over a dozen brands of high-, medium-, and low-end beer and liquor, he has not properly balanced the ratio of profitable and non-profitable products.
**2. Poor Channel Management**
The sales network is not solid; management is limited to simple selling, focusing on expanding the network and routine delivery, without implementing scientific channel management. This leads to many network points but few core customers, and channel defection or usurpation occurs frequently.
**3. Incomplete Department Setup**
Sales personnel lack corresponding management systems, with no supervision or restraint mechanisms. Long-term absence of systematic management fosters lazy and weak work habits among sales staff, such as failing to assist customers in building terminal outlets in county markets, price discrepancies, and false expense claims, wasting company resources.
**4. Poor Personnel Quality and Skills**
There is no comprehensive human resource management system covering job requirements, recruitment, training, and promotion. The company rarely arranges professional training, and even when training is provided, it lacks specificity and professionalism, yielding poor results.
> **Strategies to Seek Efficiency from Management:**
**1. Reasonably Adjust Product Structure**
Conduct profit analysis of the company's products. Based on sales volume, profit margins, and brand influence, differentiate and reasonably combine products. Determine which products are "high volume, low profit" for building the sales network and stabilizing customers, which are "low volume, high profit" as sunrise products for future profitability, and which are "high volume, high profit" golden products. Aim to increase volume while maintaining existing profits. Regularly update the product structure annually to make it more rational.
**2. Strengthen Channel and Inventory Management**
Tapping channel potential is an important method for distributors to increase efficiency. Channel potential tapping involves intensive cultivation and classified management of channels, then allocating support resources based on sales figures to further release channel potential and strength. Only then pursue expansion. Avoid blindly pursuing growth and expanding territory, as a weak foundation may lead to losses, like Genghis Khan's western expedition where front-line expansion was undermined by weak rear defenses, losing hard-won territories. Distributors can manage customers by classification: first, establish distribution cooperation alliances with customers, providing appropriate rewards based on annual sales. Second, establish a return and exchange system to swap slow-moving products for customers. Third, regularly hold distributor association meetings to communicate and build relationships. Fourth, strengthen work guidance and assistance to customers. Fifth, establish backup customers and promptly replace unqualified distributors...
Large distributors often handle many categories; if inventory management lags, it can lead to large quantities of near-expiry or expired products. Many manufacturers' contracts stipulate no returns for non-quality issues. Therefore, distributors must manage inventory well, track purchase, sales, and stock data promptly, strictly follow the first-in, first-out principle, prevent near-expiry products, and eliminate expired products to avoid unnecessary losses.
**3. Strengthen Personnel Management and Training**
Establish a comprehensive and smooth system: "People are the primary factor." The quality and level of personnel determine the outcome of work. Establish and improve internal management systems, assessment systems, and reward and punishment systems. Clearly define job responsibilities, requirements, work content, and processes to achieve standardized management "binding people with systems."
Establish a training system, formulate training plans, and enhance the specificity and effectiveness of training. Pre-employment training for new employees is also crucial. Simultaneously, introduce policies to encourage employees to pursue self-improvement in their spare time, attend various training courses, and continuously enhance their overall quality.
> For a company, there are essentially four types of problems: personnel issues, performance issues, short-term issues, and long-term issues. Generally, personnel issues should be addressed first. If one blindly pursues performance issues before thoroughly resolving personnel issues, either performance itself will be difficult to solve, or even if performance issues are resolved, it will be only temporary relief with lingering aftereffects. In short, personnel is the fundamental issue. Sometimes, overemphasizing digital management and focusing solely on performance issues without addressing personnel issues leads to a deadlock where no problems are solved.
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> Especially as company managers, they must strengthen their own development. The abilities to identify problems, set goals, find good strategies, organize and coordinate, persuade, motivate subordinates, develop subordinates, and self-renew are all essential for managers. Regardless of your qualifications and experience, without these eight basic abilities, you cannot become a qualified manager.
**Source: Business Expert (ID: htsxy88)**


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