Returns occur with any product, and there are various reasons: one is due to product quality, another is due to market conditions. The main market-related reasons are as follows:
Returns due to poor sales efforts. When new products arrive at the warehouse, if there is no strict requirement for sales staff to distribute them, or if there is a requirement but it is not taken seriously—thinking that new products are hard to promote, have low sales, and are time-consuming and not worth the effort—the boss and salespeople may develop a fear of difficulty and be unwilling to actively promote new products. This leads to slower and slower distribution, and eventually, no one distributes the new products. Over time, when the new products become near-expiry, the boss starts to worry and finds various excuses to demand returns.
Returns from secondary wholesalers. Because secondary wholesalers sell a variety of products, they may neglect warehouse management, not follow the first-expiry-first-out principle, or rarely take inventory. When they find near-expiry products at the bottom of the warehouse that cannot be sold, they ask the distributor for returns or exchanges. If the distributor refuses, it may harm the relationship or even lose the customer; if they agree, the distributor suffers unnecessary losses.
Returns from retail outlets. Both KA stores and small retail shops may occasionally have near-expiry products. The main reason is that sales staff do not maintain and follow up properly, leading to near-expiry stock. For example, not following planned routes for periodic visits, skipping stores, or missing stores; some stores that are not maintained for a long time are prone to near-expiry products. Also, store owners or staff may not have the awareness to manage products on a first-expiry-first-out basis, and if our sales staff do not pay attention or fail to discover and regularly tidy the shelves, then retail outlets are more likely to have near-expiry products. Additionally, during holidays, overstocking can lead to returns from supermarkets. Regardless of the cause, distributors must resolve near-expiry issues for retail outlets.
Therefore, effectively controlling and avoiding near-expiry products in the market is a very important task in our daily market management. If this task is managed well, it will positively promote the healthy development of the market for both manufacturers and distributors; if not, it will harm not only the manufacturer and brand but also the distributor. So, how can we effectively control and avoid this?
Require secondary wholesalers and retail outlets to strictly follow the first-expiry-first-out principle in managing product inventory and shelf displays. Our sales staff should not only understand this themselves but also make the owners and staff of secondary wholesalers and retail outlets understand it. Moreover, they should help them develop a habit of consciously managing inventory and maintaining safe stock levels.
When new products arrive at the warehouse, distribute them to retail outlets as quickly as possible, ideally within one week. After distribution, sales staff must ensure attractive displays in every store. Only then can new products move and generate sales. Otherwise, new products will just sit in the warehouse, and retail outlets won't see them, leading to poor outcomes. Therefore, the faster the distribution of new products and the higher the store coverage, the better for the growth of new products.
When products are two to three months away from their expiry date, concentrate these products in local supermarkets with good sales and use special offers or other promotions to clear them in one go. This greatly reduces the possibility of returns.
When sales staff visit customers daily, in addition to specifying areas, performance targets, visit routes, number of stores to visit, number of transactions, and minimum transaction volume per store, they should also be assessed on attractive displays. The prerequisite for good displays is to always know the customer's inventory. Therefore, the first thing sales staff should do upon arrival is check the customer's inventory. The benefits of checking inventory are: first, to avoid old stock; second, to prevent stockouts; third, to expand display space; and fourth, to increase sales. As long as our sales staff do their work meticulously and maintain and serve the market properly, the problem of near-expiry products at secondary wholesalers and retail outlets can be solved.
Therefore, market returns can be completely controlled and avoided, depending on the responsibility of our sales staff and their control and execution in the market.
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