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Distribution is of great significance: it is essential for opening new markets and capturing market share, a key task for promoting new products, a powerful weapon against competitive product impact, the best way to train and develop sales personnel, and an important channel for gathering frontline market information. So how can we achieve effective distribution?

Pre-distribution Preparation

  1. Select the right products for distribution in the target market.

    • Understand local consumption habits, such as taste, specifications, and purchasing power.
    • Assess the competitive landscape: pricing, promotions, distributor strength, and distribution coverage.
    • Know your own company's product resources.

  2. Principles for setting channel prices for distribution products:

    • Reference competitor channel prices: For products with similar specifications and positioning, if competitors price at 25 yuan, set your price between 24.5 and 25 yuan. Pricing above 25 yuan may be rejected by secondary distributors, while pricing too low (e.g., 23 yuan) may create a perception of different positioning, leading to low-price selling and reduced profits.
    • Align with the product's strategic role: If it's a sacrificial product, allow minimal or no profit for distributors; if it's a long-term profit product, ensure adequate profit margins.
    • Communicate and negotiate with distributors to secure their support and cooperation. Avoid unilateral decisions that can strain relationships.
    • Aim for the higher end of the price range to leave room for future competitive responses. As products mature, per-unit profits decline; having margin allows distributors to invest in promotions during competitive threats. Starting with low margins risks losing distributor support in crises.
    • Reference neighboring markets to avoid significant price gaps that could lead to cross-regional dumping.

  3. Principles for setting promotional policies:

    • Tailor promotions to market needs: Consult distributors, secondary distributors, and retailers on preferred promotion types (cash vs. goods, immediate vs. cumulative redemption, etc.). Aligning with needs improves effectiveness and saves costs. For example, a sales rep once requested more budget, but investigation showed the promotional item was the same as a competitor's last month, so distributors had no interest. After adjusting the item, distribution volume increased fivefold without extra cost.
    • Set promotion intensity slightly above competitors, but not excessively, especially for new products. Overly aggressive promotions can lead to overstocking, causing distributors to dump products at low prices, harming the brand and market.
    • Follow company guidelines: Stay within budget to avoid running out mid-campaign, and align with company requirements for different product stages (e.g., initial promotions for secondary distributors, later for retailers).
    • Use flyers or posters with signed receipts from secondary distributors to prevent fund diversion and monitor effectiveness. This also protects sales reps from misunderstandings.

  4. Ensure distributor participation in the first distribution.

    • Persuade distributors to join personally to facilitate smooth completion and build their confidence.

  5. Plan distribution routes and organize inventory.

    • Assign separate vehicles to different routes to avoid overlap and waste. Ensure no areas are left uncovered. Schedule regular cycles for each route to maintain supply. Organize inventory based on route needs (e.g., more small packages where needed) and ensure the warehouse is fully stocked before starting.

  6. Carry promotional materials, samples, flyers with order phone numbers, work diary, calculator, market map, and distributor registration forms.

Details During Distribution

  1. When arriving at a location, identify the main sales areas.
  2. Choose the first store carefully and secure it at all costs to leverage the "herd mentality" and set an example for others.
  3. Handle different customer situations: If busy, wait; if talking or playing, avoid interrupting; if idle, start pitching.
  4. When presenting samples:
    • Highlight your product's strengths over competitors' weaknesses.
    • Emphasize company advantages.
    • Explain profit margins and selling points.
    • Observe the owner's reactions and adapt accordingly.
  5. Outcome handling:
    • If successful, remind about channel pricing, help unload, display products, leave order phone, and update records.
    • If unsuccessful, stay positive, leave samples and contact info, and try again later.
  6. Maintain confidence and adapt communication to different customer personalities, using appropriate praise.
  7. Key principle for new markets/products: Focus distribution points closer to the end consumer (small retailers, supermarkets) rather than only large secondary distributors. Also, target key consumption venues (e.g., schools for instant noodles) for focused distribution and promotion.

Post-distribution Service and Follow-up

  1. Summarize and analyze the day's work in a diary.
  2. Categorize customers and maintain detailed records.
  3. Monitor distribution cycles, product flow, and logistics; assist secondary distributors in deeper market development.
  4. Regularly contact and visit secondary distributors, provide training, and monitor pricing and cross-regional dumping.

Link: Six Elements of Distribution

  1. Plan and purpose.
  2. Overcome self-doubt, thick skin, and embrace challenges.
  3. Four Diligences and Two Quicknesses: diligent mouth, eyes, hands, legs; quick actions and reactions.
  4. Adapt and assertively distribute.
  5. Summarize regularly.
  6. Four Essentials: calculator, map, work diary, and distributor records.

Originally published in Sales & Management.