Click the image for details Author | Liu Chunxiong Source | Teacher Liu's Forum (ID: liuchunxiong1964)
- Near-expiry products are deadly Currently, the biggest harm to distributors is near-expiry products, not stocking up. Of course, some say near-expiry products are caused by stocking up, but I don't fully agree.
How harmful are near-expiry products? Let's put it this way: in FMCG, almost all categories face this problem. This is the universality of near-expiry products.
Once, at a sanitary napkin company, many distributors raised this issue. The factory owner said the problem didn't exist, but the distributors said it did. If even the sanitary napkin industry has near-expiry products, which FMCG category doesn't?
Second is the severity of near-expiry products. A 5% exchange rate is normal, and 10% or more is not uncommon. Short-shelf-life products are even more common.
Third is the large loss from handling near-expiry products. In the past, handling near-expiry products was relatively simple: reduce the price by a few yuan per piece. Now it requires "buy one get one free," and some even need to be destroyed. The volume of near-expiry products is so large that some merchants simply organize large-scale activities to deal with this problem. Because handling near-expiry products causes large losses, the already thin profit margins are further compressed.
- Where does the harm of near-expiry products come from? Near-expiry products are born from stocking up. This view is widespread.
So, is it okay not to stock up? No. Because if you don't stock up, sales will immediately decline. Therefore, it's better to handle near-expiry products than not to stock up.
But we used to stock up too; why weren't near-expiry products so severe? This is because the relationship between manufacturers and distributors has changed qualitatively.
In the past, manufacturers and distributors also stocked up at stores, but once the goods entered the store, responsibility shifted to the store, and the store would worry.
Now it's different: no matter how much stock the distributor pushes, the store doesn't care, because the store is not responsible.
On one hand, the upstream is stocking up; on the other hand, the store is not responsible. If the upstream manages inventory improperly, near-expiry products will form.
I also found that because the stocking volume is large, the cycle for factory and distributor salespeople to visit terminals or make deliveries is greatly extended, which naturally leads to problems in terminal inventory management.
- What are the conventional methods? Since the store is not responsible, the responsibility lies with the upstream supplier. Therefore, there are roughly two conventional management methods.
One is to require salespeople to strengthen terminal inventory management. For example, strengthen the assessment of salespeople's exchange of goods and enhance their sense of responsibility.
The other is to handle near-expiry products well and minimize losses.
These two methods: the first is in-process management, and the second is post-event management. They have some effect, but they are not fundamental solutions.
- New thinking for solving near-expiry products In the early days, occupying warehouse space and stocking up had two main purposes: one was to occupy store funds; the other was to occupy warehouse space. It was also effective in the early days.
As promotional thresholds increased, the scale of occupying warehouse space grew larger. Therefore, we need to reflect.
I think occupying store funds is correct, but occupying warehouse space is meaningless now. Moreover, if a promotion occupies store funds, it's not necessary to push all the goods into the distributor's warehouse at once, unless it's a product with a very long shelf life, like baijiu.
The new thinking is: only occupy funds, not warehouse space. Through rhythmic distribution, ensure the terminal is not out of stock.
- New thinking, new methods Before the 2017 Spring Festival, some distributors in a county accidentally discovered new thinking and new methods for solving near-expiry products when applying B2B.
The new method has two keywords: bus-style distribution, and only occupy the store, not the warehouse.
The so-called bus-style distribution means scheduled delivery, for example, once every 5 days or once a week.
Why bus-style distribution? Because bus-style means fixed time and fixed route delivery, with a fixed cycle, so stores can accurately predict the order quantity when ordering.
Only occupy the store, not the warehouse, is the new thinking. Because as long as you occupy the warehouse, the store doesn't worry. If the goods are in the store, the store owner will worry about putting them on the shelves, and when the shelf is out of stock, they will proactively restock.
Only occupy the store, not the warehouse, requires accurate prediction of order quantity. As mentioned earlier, because it's bus-style distribution with a fixed cycle, the order quantity is relatively easy to calculate. There won't be a large amount of goods pressed in the store, and the store owner won't allow a large amount of stock in the store either.
- New methods, new effects According to the above new methods, if operated properly, three effects will be formed.
First, the goods are fresher. Because the goods are fresh, sales actually increase. In the past, stocking up produced near-expiry products, which affected sales.
Second, near-expiry products are fewer. With fewer near-expiry products, profits naturally increase.
Third, the interference of near-expiry product handling on prices is smaller. Handling near-expiry products not only squeezes normal sales but also affects normal prices because of the ultra-low prices.
Extended reading: New Distribution's "7th B-end E-commerce Study Tour" is recruiting!
Activity process:
June 19-23: Suzhou · Shanghai · Hangzhou 19th: Check in at designated hotel in Suzhou; 20th: Visit Suzhou Medline; 21st: Visit Shanghai Hd; 22nd: Visit Hangzhou Wangcang; 23rd: Return or free arrangement for sightseeing;
Introduction to the platforms to visit:
Medline Youshang Software, a well-known domestic information system provider. In 2015, it launched the "Medline" brand. Medline, based on Youshang Software products, with artificial intelligence technology as the internal force and efficient operation as the breakthrough, helps distributors build a new B2B business model. It has provided software technical services to distributors in more than 50 cities across the country.
Hd Company Shanghai Hd Information Engineering Co., Ltd. (hereinafter referred to as: Hd Company) is a domestic first-class management consulting and software R&D company for commercial circulation, e-commerce, and modern logistics solutions.
Since its establishment more than 20 years ago, it has always been committed to creating modern commercial management models for customers. Hd's systematic products and solutions with independent intellectual property rights have strong competitiveness in the three major formats of chain retail, commercial real estate, and warehousing logistics. It has supported more than 500 well-known large and medium-sized commercial enterprises and group users in 30 provinces and cities across the country. It is the largest retail software provider in China.
Wangcang Zhejiang Wangcang Technology Co., Ltd. was established in June 2011. It is the earliest and currently the only large-scale independent fourth-party intelligent warehousing and distribution service provider in China. Wangcang has always been committed to innovation, implementation, and daily operation of refined and collaborative solutions for e-commerce enterprise warehousing and distribution. Today, Wangcang has the ability to provide solutions from B2C e-commerce warehousing and distribution to B2B+B2C full supply chain integration (warehousing and distribution).
Relying on its self-developed adaptive warehousing and distribution comprehensive management system, combined with years of warehouse construction and in-warehouse management experience, as well as self-developed equipment, Wangcang has formed comprehensive competitive advantages. Wangcang's system can seamlessly connect to all sales platforms, enterprise ERP, logistics transportation and express resources, and in-warehouse operation resources (such as equipment, labor, warehouse area application, etc.). Through our services, the efficiency of a single warehouse can be greatly improved, and resource interaction, allocation, and flow between warehouses can be achieved. Through big data, we provide value-added services such as supply chain optimization and supply chain finance for cargo owners. At the same time, through open systems and management advantages, we provide franchise business for warehouse owners.
Organization form 1. Company visit 2. Actual market case visit 3. On-site explanation 4. One-on-one communication
Participating distributor friends only need to pay a registration fee of 200 yuan Other expenses are self-paid Long press this QR code or click read the original text to register Long press the QR code to add WeChat to register
Group photos of previous study tours: 6th B-end E-commerce Study Tour group photo, from top to bottom: Zhongke Shangruan, Shuhai Supply Chain, Yunmei Shares, Yishang Logistics. 5th B-end E-commerce Study Tour group photo, from top to bottom: Huiwangxing, Beiquan, Tongying Tianxia, Quanshihui, Zhongke Shangruan. 4th B-end E-commerce Study Tour group photo, from top to bottom: Alibaba Retail Link, Qianmi Network.
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