In 2015, many FMCG companies saw poor sales performance, with the worst suffering significant declines and the better ones barely maintaining sales but unable to escape the clutches of losses. In the unfavorable economic environment, some excellent companies achieved growth, but both growth rates and profit margins declined sharply. The media began to exclaim that the largest wave of layoffs in history was imminent. In 2015, the growth rate of total retail sales of goods dropped significantly; there were more monks, but the porridge didn't increase, putting even greater pressure on the "surviving" sales personnel. Although the e-commerce wave has been strongly eroding traditional sales channels in the past two years, offline channels still account for about 80% of the consumer goods market. Thus, FMCG companies are still desperately seeking ways to complete sales tasks offline. To push or not to push? To boost sales in physical channels, most companies focus on increasing coverage and improving per-outlet productivity. Increasing coverage is relatively easier. However, while headquarters repeatedly sounds the call to "go deeper into third- and fourth-tier cities" and even townships, regional sales staff are trembling with caution. Some veteran salespeople even tell newcomers, "Don't rush, take it easy, or you'll get hurt badly!" Why is this? A recurring story A certain FMCG company decided to launch an aggressive coverage expansion to maintain three consecutive years of high growth. They offered generous distributor coverage incentives and organized a strong sales team to help distributors achieve deep coverage. To make newly opened stores generate sales faster, the company proposed the slogan "Occupy the terminal": by investing heavily in display fees, they required achieving the largest shelf space and largest inventory in stores. Then came dramatic results: In the first month, sales in all regions surged, performance was excellent, and everyone was jubilant. The factory even questioned why they hadn't added production lines sooner. In the second month, sales growth slowed significantly, and meeting targets became challenging. Distributor inventory was normal, and both inbound and outbound shipments remained busy, seemingly all was well. In the third month, distributor shipments began to slow, previous orders arrived one after another, warehouse pressure suddenly increased, and performance struggled to reach 100% completion. In the fourth month, distributor inventory pressure became enormous, and they were also holding a pile of prepaid expense claims. Factory shipments dropped sharply, requiring salespeople to "give their all" to generate a bit of sales. The killer was that personnel and terminal display costs remained high! Under the threat of "losses," various internal "reflections" began to emerge. In the fifth month, adjustments began to show: personnel cuts, policy tightening, and expense reductions. Salespeople deemed "ineffective in completing tasks" were adjusted or laid off from the bottom up, causing widespread anxiety. In the sixth month, the nearly emptied channel inventory began to take effect, and sales rebounded slightly but remained below the same period last year. Due to sales personnel changes, leftover issues with distributors and retail terminals in some regions surfaced, intensifying conflicts between the manufacturer and customers. Newly assigned salespeople found that in newly developed markets, distribution became increasingly difficult, terminal cooperation was worse than six months prior, and persuading distributors to cooperate often ended in arguments. In the seventh month, the entire market strategy had quietly shifted from "aggressive coverage" to "ensuring existing volume"... In the eighth month... Regional sales personnel continued to be replaced, after all, "poor execution" is the easiest "problem" to "discover" and "handle." However, many salespeople said these markets were beyond saving no matter who came... Sorry, the above story is made up by me. Any resemblance is purely coincidental! Because in the past five years, I've seen, heard, or experienced such stories no fewer than four times. These stories occur in both small and medium enterprises and industry leaders; in both private and foreign companies. Veteran salespeople who have weathered these waves often become very cautious, "once bitten, twice shy." Things are never that simple "We never have such problems!" Perhaps many haven't experienced such torment, but they've more or less walked through these craters. Why can't regional sales staff be directed? Why are distributors always unhelpful? Why do terminals only care about collecting money and not recommend our products? Not to mention that these "troublemakers" were once passionate; the reasons vary from company to company and are far more complex than they appear. If you analyze carefully, you'll find many problems seem familiar. What problems? Wrong direction: tactical diligence ultimately fails to compensate for strategic laziness. For some companies, effective coverage (or weighted distribution) is already high, and the marginal contribution of expanding coverage depth and breadth is low. The Chinese market is always tempting, with terms like "urban-rural dual structure," "vast township market," and "per capita consumption still far from developed countries" appearing not only in industry analysis reports but also in corporate policy documents for large-scale coverage. However, these "pies" aren't as tasty as imagined. Some companies don't further examine their actual product distribution, don't study which "blank markets" truly suit their products, or what products and services are needed to satisfy these "blank markets." They simply think, "Put the products in more places, and people will naturally buy them!" This mindset not only prevents companies from carefully considering which markets to cover but also leads them to overlook more important opportunities—product and service improvement—ultimately resulting in thankless efforts. Right direction, wrong product: you can't force what doesn't work! For example, if the product doesn't fit the local market, spending big money won't achieve effective sell-through, leading to massive channel returns that severely damage channel partners' confidence. Right direction, wrong pace: you won't survive to see victory. The product is good, and there are indeed many blank markets, but moving too fast leads to failure under short-term profit pressure. Companies often overestimate sales growth from new markets while underestimating the resources needed. In many cases, new markets require substantial resources for cultivation. If these markets' share increases significantly in a short time, profits from mature markets will be heavily eroded, and company profitability will plummet quickly. Without proper pacing, spreading too wide too fast will eventually force the company to abandon expansion plans due to profit or cash flow pressures. Additionally, consumer acceptance in new markets takes time. If companies relentlessly pressure distributors and terminals to meet monthly sales targets without allowing enough time for market digestion, they'll drag customers down. Right direction, insufficient support: unable to do what's needed. Why haven't blank markets been occupied? Often it's not that our vision is poor, but "I really can't do it." Lack of regional customer base, high distribution costs, insufficient regional management personnel—these issues often encompass comprehensive capabilities from production to storage, transportation, and sales. In rapid market battles, the weaknesses of the entire management system are exposed! If these key capabilities aren't improved in time, the frontline sales team will die on the beach. Right direction, lacking sell-through skills: half-paralyzed. Almost all regional salespeople have told me, "What we worry about most isn't distribution, but how to drive sell-through!" While launching large-scale coverage campaigns, companies are very conflicted about investing in terminal sell-through. It's not that companies don't know they need to focus on sell-through, but they lack good methods. After over 30 years of development, most marketing management decision-makers are well-versed in terminal factors. However, many "successful experiences" are applied dogmatically. A typical example is "stack goods like a mountain": many believe that as long as you place products in the best position with the most stock, they'll sell. So regardless of the store type, they grab the largest display and the biggest shelf space. But at this point, after paying huge display fees, the company can't afford promotional activities or personnel incentives. The result is products sit "quietly" at the terminal, while stores care more about how much fees they collect, then return unsold stale goods to the company. Due to slow sell-through, terminals gradually lose confidence in the product, and eventually, in-store placement and displays are lost. Products either get cleared out or barely survive in a corner. Channels hold grudges After the vigorous distribution campaign, company policies often undergo major adjustments, and channel customers' trust in the company drops significantly. Worse, the company's reputation spreads quickly in a region; not only are old customers offended, but new customers are also reluctant to cooperate. So when a new regional manager arrives in such a market, it feels like stepping onto a lifeless saline-alkali land where nothing grows! That's how markets get killed. ... The key is people, the key people Facing such difficulties, the accumulating negative emotions in the team are often the company's biggest enemy. A desperate salesperson can leave a company or region with frustration, which does no good for the enterprise. In reality, many outstanding companies have staged brilliant comebacks. These markets not only revived but often became new model markets. The decisive factors in this process are first the entrepreneurs' never-give-up spirit, objective self-reflection, and decisive courage. The entire marketing team also puts in extraordinary effort, especially those bold yet meticulous, innovative, and responsible team leaders who become the company's pillars. It is because of these persistent people, along with scientific methods, strategies, and systems, that companies can find a path to rebirth. -END- The best FMCG distributor learning platform in China Dedicated to providing professional, practical, and actionable tutorials for companies 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 corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 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]