Improper Shipping, Improper Delivery, Overstocking, and Failure to Follow FIFO at Retail: How Can Distributors Reduce Excess Near-Expiry Products?

I. Near-expiry products at the distributor level: possible causes and countermeasures:

1. Inappropriate product assortment may be the main cause. Due to insufficient prior estimation or the desire to boost sales performance, distributors may have stocked products they shouldn't have. As the ancients said, "When you fail to achieve your goals, seek the cause within yourself." The answer lies in self-reflection.

First, look around to see if any neighboring market can help you sell through the stock. Don't think about using company policy to return it to headquarters.

In 1977, Konosuke Matsushita, the god of management in Japan, bypassed his son-in-law (the current president) and promoted Yamashita Toshihiko to lead Matsushita Electric. This was because Yamashita had the grit to swallow his pride, solve problems himself, and not trouble the head office.

Matsushita said, "Before promoting him, I didn't know him well. When he was president of a subsidiary, a labor dispute occurred that became unmanageable. Most people would have complained to head office executives, but he said nothing and resolved it alone. The standing shareholders thought he was eccentric, but he left a deep impression on me. Promoting him to president was my personal gamble; the sudden promotion was also hard on him." In 1983, Matsushita Electric's total profits reached 189.11 billion yen, nearly double the 97.68 billion yen in 1977 when Yamashita took office.

Everyone welcomes someone who can operate independently without troubling their superiors. I hope you can cultivate such a quality.

Conduct on-site promotions, bundle several bottles together, and sell at a discount. For near-expiry items like condiments, cooking oil, rice, flour, and meal ingredients, you can find small-scale foodservice outlets to sell at a discount, or use them as promotional giveaways for foodservice channel purchases. These are all viable methods. Your hard work and determination will earn the distributor's understanding, and they may help you in critical moments.

If you still can't sell them, the last resort is to ask your supervisor for help.

Therefore, veterans always say "prevention is key." To truly achieve this, you must think carefully before acting. If you can't figure it out yourself, consult colleagues, leaders, and customers.

When launching a new product, coordinate with the company's launch plan and stock moderately. The key is to order slightly less than the expected sales volume, and when it's almost sold out, quickly reorder. If the company allows returns for new products not sold within six months or a certain period, then order the expected sales volume to avoid stockouts.

2. Near-expiry products due to improper storage or failure to follow FIFO. This is usually caused by the distributor storing products in a corner of the warehouse without noticing, or by the distributor's downstream customers returning products due to improper storage. If your supervisor hasn't commented, you should understand that the distributor is responsible for this. All you can do is express sympathy.

At the same time, you should inform the distributor of the company's return/exchange policies and ask them to inform their customers. If you can find some resources to compensate the distributor, it can be a consolation. However, first ask yourself why you don't regularly check the distributor's warehouse conditions and care more about your products. The distributor will appreciate your enthusiasm and cooperate better.

(3) Near-expiry products due to improper shipping by the manufacturer.

Most FMCG products have a shelf life, especially food and beverages, so expiration dates are strictly enforced. However, sometimes a product with a one-year shelf life may be shipped two or three months after production. Due to transportation time (e.g., a month on the road) and the time it sits in the distributor's warehouse, the expiration date approaches quickly.

In such cases, the manufacturer should bear at least half the responsibility. Handling this is complex, so prevention is best: instruct the distributor to check the production date upon receipt. If the production date is early and there's a risk of creating many near-expiry items, they should contact your supervisor immediately to resolve the issue before it occurs.

(4) Near-expiry products due to improper delivery.

If the transportation department sends goods to the wrong location and then re-ships them to the correct location, causing a large number of near-expiry products, this should be reported to the manufacturer's logistics department to negotiate compensation with the carrier.

Once the causes of near-expiry products are identified, the focus and key details of daily work become clear. You won't worry about running out of topics when visiting distributors.

II. Countermeasures for wholesale and retail outlets

Near-expiry products found in the channel, including supermarkets, hypermarkets, small retail stores, and wholesale outlets, may have the following causes and countermeasures:

(1) Due to overstocking or poor sales.

Try to master the sales data of target outlets and control the quantity and frequency of deliveries. For existing near-expiry products, first help move them to fast-selling channels. For those close to expiration, use the methods described earlier. However, note that these plans should be approved by your company before implementation. Never handle them arbitrarily, and don't let distributors do so either.

(2) Due to failure to follow FIFO at wholesale or retail terminals.

In this case, don't easily blame them for irresponsibility, as it won't help. Helping them dispose of the products to recover losses is better than making them bear the cost. If you really make an issue of it, the section chiefs, warehouse managers, department heads, and stock clerks responsible for ordering will have their bonuses deducted and face criticism. They will realize their mistake.

If you help them dispose of it, they will be grateful and will support your company's products in other ways. If you don't help and instead criticize them, your nightmare may begin—it's not worth it.

Note: Don't accept returns; exchange the products instead. There's a difference.

III. Special precautions

Do not agree to or support distributors altering production dates for temporary convenience, as this can cause huge losses.

A large food distributor in Shanghai had a small area dedicated to altering production dates on near-expiry products. They were exposed by Xinmin Evening News and lost all credibility. Fortunately, our routine work was solid, and none of our brand's products were involved, as the newspaper also reported the brands of several companies whose products were altered by this distributor.

Six years later, tragedy repeated in Qingdao, Shandong. A highly influential condiment distributor was sentenced to several years in prison for altering dates—truly not worth it.

Some distributors alter production dates, and after the actual shelf life expires, consumers unknowingly buy the products and discover quality issues, causing both the distributor and the manufacturer to pay a heavy price. Sales personnel represent the manufacturer, so never do anything that harms the manufacturer's interests.

-END-

The best learning platform for FMCG distributors in China

Dedicated to providing professional, practical, and actionable tutorials for enterprises 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 the corresponding content.

Reply with number 1 to view the complete knowledge base.

[Long press QR code to follow]

Join QQ/WeChat groups: Click: Read Original