Returns are inevitable in any product business, and there are various reasons for them: one is due to product quality issues, and the other is due to market factors. The main market-related reasons for returns 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 difficult to promote, have low sales volume, and are time-consuming and laborious with little return—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 of new products, and eventually, no one distributes them. Over time, when 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 wide variety of products, they may neglect warehouse management, fail to follow the first-expiry-first-out (FEFO) principle, or rarely take inventory. When they discover near-expiry products at the bottom of the warehouse that cannot be sold, they demand that the distributor accept returns or exchanges. If the distributor refuses, it may damage the relationship or even lose the customer; if they accept, the distributor suffers unnecessary losses.
Returns from retail outlets. Whether it's a key account (KA) supermarket or a small retail store, near-expiry products can appear from time to time. 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 can result in near-expiry products in stores that are not regularly maintained. Additionally, store owners or staff may not have the awareness to manage products on a FEFO basis, and if our sales staff do not pay attention or fail to discover and regularly tidy the shelves, near-expiry products are more likely to occur in retail outlets. Furthermore, 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 has become 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 managed well, 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 FEFO principle in managing product inventory and shelf displays. Our sales staff should not only understand this themselves but also make the store 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 product displays in every store. Only then can new products generate sales and momentum. Otherwise, new products will only sit in the warehouse, and retail outlets will not see them, leading to a poor outcome. Therefore, the faster the distribution of new products and the higher the store coverage rate, the more beneficial it is 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 performance and use special offers or other promotional methods 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 to close, 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 arriving at a customer's location is check their 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 easily solved.
Therefore, market returns can be completely controlled and avoided, depending on the sense of responsibility of our sales staff and their control and execution in the market on a daily basis.
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