Against the backdrop of slow FMCG growth and weak sales, clearing inventory has become a major issue for many companies and distributors. To understand the real situation of distributor inventory and help distributors properly handle inventory problems, Food Board conducted an in-depth survey to collect effective solutions for inventory backlog. Among the more than 500 distributors who responded to the Food Board survey, when asked "What measures are you taking to deal with high inventory?", 22.1% chose to negotiate with manufacturers to reduce purchase volumes, while 50.1% chose to ask manufacturers for policies to do terminal promotions. A distributor in Shanghai who operates a small dish business, after inventory products became near-expiry, had to throw away an entire truckload of products due to untimely handling. In East China, there is a widespread phenomenon of chain stores selling imported food at low prices, with prices only 15% of the purchase price. The only difference from normal products is that most of them have only two to three months left before expiration. From the above three phenomena, it is not difficult to see that with the current operating capabilities of food distributors, facing increasing inventory pressure, seeking support from manufacturers is still the first choice; once they lose the protection of manufacturers, some distributors often appear at a loss, even in a panic. Based on multiple interviews, Food Board believes that in the face of increasingly fierce market competition and growing inventory pressure, food distributors should rely on themselves rather than depend on others. In the short term, distributors can start with four strategies: increase channels, adjust structure, grab displays, and boost sales to quickly clear inventory; in the long term, distributors need to master the laws of off-peak and peak seasons, adjust stocking rhythms accordingly, and fundamentally get rid of inventory pressure. Adjust Structure, Increase Channels: Internal Adjustments and Advance Layout Adjusting structure and increasing channels is not difficult to understand literally: adjust the existing product structure and increase the types of operating channels. These two seemingly independent steps are closely linked in actual execution. When the product structure changes, the operating channels are likely to shift from circulation channels to supermarket channels or special channels; and when new channel types are added, the types of products represented must also be filled accordingly. For distributors with the ability to control all channels, they hold many well-known brands, but if they only cover one category, channel resources will inevitably not be fully utilized. Such distributors can operate cross-category products, for example, dairy distributors adding snack foods to fully utilize their channel resources. For distributors with relatively single channel resources, they need to make judgments based on actual conditions. For example, a condiment distributor in Shanghai has strong control over KA (Key Accounts) and covers East China in distribution. In the later product selection process, this distributor can add rice, flour, grain, and oil products. If the distributor is smaller, they should appropriately enrich the product line according to channel needs. Hunan distributor Zhang Zhihua initially focused on representing snack foods, including candies, jellies, and some bulk snacks. Last year, Zhang Zhihua made large-scale adjustments to his product structure: he gave up the distribution rights for most snack food brands such as jellies and candies, and successively took on a sports drink, a room-temperature lactic acid bacteria drink, and a functional drink, transitioning from a snack food distributor to a beverage distributor. "Previously, due to the large number of snack food products, sales were mainly in the form of box-opening sales, and labor costs remained high. A salesperson could visit seven or eight terminal stores a day, with monthly sales of only 30,000 to 40,000 yuan. Now, a salesperson can achieve sales of 80,000 to 90,000 yuan in one region," Zhang Zhihua revealed. Although the gross profit of beverages is only half that of snack foods, due to the increase in total sales, the profitability of the trading company and the efficiency and output ratio of salespeople have improved significantly. Moreover, due to the faster turnover of beverage products, Zhang Zhihua's capital utilization rate has greatly improved, and the return/exchange ratio has also decreased. Guangzhou Zhanqi Trading Co., Ltd. (hereinafter referred to as "Zhanqi Trading") mainly represents Chongqing "Sanwu Shiquan" hot pot base and Sichuan "Huitong" pickled vegetables series, and has successively established branches in Beijing and Chengdu to expand sales areas. In recent years, Zhanqi Trading has continuously adjusted its channel layout, gradually reducing cooperation with KA hypermarkets and vigorously expanding circulation and catering channels. This year, it made adjustments again based on product structure, targeting BC convenience stores and hiring professional operators. A relevant person in charge of Zhanqi Trading said that condiments are one of the household staples, and consumers are more accustomed to buying them at community stores near their homes. Therefore, the company now develops more retail terminals to achieve multi-channel coordinated development. Grab Displays, Boost Sales: Take the Initiative to Win the First Move If channels and product mix are parallel, then display and sales are causal. As the saying goes, no display, no sales. Only when products are placed on shelves in a certain display form at retail terminals can they stand out among many competitors. At this critical time of dealing with inventory, distributors need to break conventional thinking, integrate various resources externally, and motivate salespeople internally to grab display space and shelf space at terminals, laying the foundation for subsequent sales. Zhejiang distributor Ying Jincai has been representing "Xiangpiaopiao" milk tea, covering areas such as Yuhang, Deqing, and Xiasha in Hangzhou. To cope with declining sales and inventory pressure, Ying Jincai arranged a series of tasks from September to December 2015. First, grab shelf space and build the foundation. September's work focused on grabbing normal shelf space. To increase employee motivation, Ying Jincai stipulated that arranging one normal shelf space would reward the salesperson 0.1 yuan, ultimately achieving an increase of 5,000 normal shelf spaces year-on-year and 12,000 month-on-month. Second, multiple displays to create atmosphere. Starting in October, Ying Jincai directed employees to conduct multi-point displays, including case cutting, hanging racks, floor stands, etc., to create a mainstream hot-selling atmosphere at terminals. On the basis of grabbing shelf space and displays, Ying Jincai required salespeople to stock up at wholesale markets and build stack boxes before small stores showed large demand, opening up terminals and shortening the time for terminals to place orders. This time, his incentive policy was to reward one yuan for each empty box recycled. Due to the interlocking arrangements, product sales improved significantly in December. Of course, for distributors who have already formed large inventory pressure, talking about grabbing displays is too late. At this time, distributors need to find the fastest way to boost sales to clear inventory. Since traditional sales methods have failed, distributors can adopt combined sales methods during this special period. For example, product combination sales, price combination sales, channel combination sales, manufacturer-distributor joint sales (both manufacturer and distributor contribute some profits for sales), special channel sales, factory group purchase online direct sales, etc. Affected by weather and other factors, some Wahaha distributors had large inventories, which greatly impacted their capital and warehouse space. After negotiation between the manufacturer and distributors, Wahaha decided that each market would organize a 5-6 person "inventory unloading" team, while distributors would provide personnel and vehicles to sweep through circulation and retail channels, using numerical advantage to complete "inventory unloading" in the shortest time. To accelerate sales, Wahaha required provinces to organize case promotions and free tasting activities before National Day. Among them, the case promotion adopted a price difference promotion method: buying by the case could get a free parasol. The price difference between Wahaha beverages' ex-factory price and retail price is 15-17 yuan per case, and the cost of the parasol is about 9 yuan, so the promotion price difference is much higher than channel profits. Adjust Ratios, Lower Coefficients: Off-Season Buffer to Win Time In the food category, most products have off-peak and peak seasons. Although with the efforts of manufacturers and distributors, "off-season not off" has become a marketing trend, for distributors with inventory pressure, the off-season is a good time to reduce pressure. Well-known marketing expert Li Linchun said, When the off-season comes, it is sufficient for distributors to have goods in the warehouse that can meet 15-20 days of sales. In addition, some manufacturers are accustomed to holding ordering meetings in the off-season, pressing goods to the market through various promotions. This behavior will also be met with cold reception as inventory pressure increases. Cao Shengyang, general manager of Zhengzhou Yangming Food Co., Ltd. (hereinafter referred to as "Yangming Food"), has deep experience with manufacturers pressing goods in the off-season. In the early days, due to inadequate preventive measures, Yangming Company suffered certain losses. To reduce inventory pressure and purchase reasonably, the task of submitting orders to manufacturers fell on warehouse manager Wang. According to Cao Shengyang, Manager Wang is very cautious when placing orders, even conservative. His biggest characteristic is that in the off-season, he would rather let some single products be out of stock for a day or two than strictly control purchase quantities. Now, the process for Yangming Food to place orders is: First, business managers from each department report expected quantities, which are summarized by Manager Wang. He then compares recent sales and communicates individually with each manager. The following dialogue might occur: Manager Wang: You want 1,500 cases of this vinegar. When was the last time you sold 1,500 cases? How much did this product sell in the last purchase period? I think 1,000 cases is enough. Business Manager: The manufacturer requires a purchase of 1,500 cases to give promotional items and trial samples, so I decided to purchase 1,500 cases. Manager Wang: From the recent sales report, this vinegar is unlikely to reach your expected target. My opinion is to purchase 1,500 cases but not participate in the manufacturer's activities. Business Manager: Lao Wang, don't always rely on experience. What if we sell out this time and run out of stock? Besides, the manufacturer promised support policies! Manager Wang: That's their usual strategy. Well, if you want to order more, you can, but you must sign the order and guarantee that if returns or exchanges occur after the activity, you will take responsibility. You can't let it rot in the warehouse. Of course, if there is a stockout, I will take responsibility. Business Manager: ...Then let me think about it. In Yangming Food, if there is an accumulation of near-expiry products, the general solution is: Yangming Food sends a salesperson and a driver, and the manufacturer also sends personnel to form a small team. During the day at farmers' markets and on weekends at hypermarkets, they sell products at special prices. The expenses incurred by the team are borne by the manufacturer. Although this solves customer returns and inventory problems, both the manufacturer and Yangming Food's business managers find it very troublesome. When the manufacturer presses goods again, they will think twice. Of course, Manager Wang also has miscalculations. If there is a stockout, Yangming Company will also punish him. But compared to his contribution in controlling purchase quantities and reducing inventory pressure, the punishment for Manager Wang is almost negligible. With over ten years of industry experience, Manager Wang knows that in the off-season, it is better to have no goods than to have excess. Cao Shengyang pointed out, If a manufacturer forces goods to boost performance, distributors must require the manufacturer to provide promotional policies to help distributors sell; if it is a growth product or a high-quality enterprise pressing goods, distributors should take part of their own profits for promotions to attract large customers to distribute and share the pressure. "But distributors must always remember: do not stock up in the off-season, ensure cash flow. " Cao Shengyang said firmly. Check Data, Give Policies: Peak Season Stocking with Evidence The off-season ends, and the peak season is coming. Li Linchun believes that within two months before the peak season, distributors can convene ordering meetings with downstream secondary wholesalers and retail terminals. So, how to make the peak season stocking quantity more scientific and reasonable? Shanghai Huashi Trading Co., Ltd. (hereinafter referred to as "Huashi Trading") has the philosophy of rationally formulating orders through data analysis. Taking Spring Festival ordering as an example: First, Huashi Trading requires business managers and back-office staff to summarize and analyze the sales of each store and each single product. The first time period is from the first day of the twelfth lunar month to the thirtieth day of the twelfth lunar month, and the second time period is three months before and after the Spring Festival. All data from all hypermarket systems and all circulation customers that meet the conditions are collected and organized. Business managers then formulate the first ordering plan based on the data. Second, store supervisors with more than one year of work experience in each system review the plan. If they agree, they sign; if not, they modify it. Because business managers have limited energy and cannot be familiar with the actual situation of all stores, store supervisors are more familiar. Third, after the business manager and store supervisor reach an agreement on the plan, each store summarizes the order quantity, then each system summarizes, and finally it is summarized to the supermarket department, circulation department, and suburban county department. The data from the three departments is then handed over to the warehouse supervisor for review. After his confirmation, the accountant can prepare funds. According to Lu Pengfei, general manager of Huashi Trading, the work of summarizing data is extremely tedious, but it is a necessary task before every Spring Festival. He told the editor that signing on the sales task order creates pressure for every store manager. They will often pay attention to their own stocking quantity and the inventory in the store warehouse, and formulate sales plans based on inventory. Every product is different every year. Last year it sold well, but this year it may be worse. So you must look at reference data more and not blindly trust experience. Zhangshu Milk Powder Marketing Company (hereinafter referred to as "Zhangshu Company") relies on direct operation and franchising to open milk powder specialty stores in various prefecture-level and county-level cities in Henan, expanding rapidly. In terms of holding ordering meetings, Zhangshu Company stipulates that franchisees pay first and then purchase goods. "The payment goes to the manufacturer first, and the manufacturer produces according to the order. The goods gradually arrive at the franchise stores, ensuring fresh dates." Zhang Dongshang, deputy general manager of Zhangshu Company, told the editor that to reduce inventory pressure, the company strictly follows market demand and data submitted by franchisees when placing orders. In addition, the manager in charge of each area visits the warehouse once a week. If they find products with older dates, they immediately formulate policies to distribute them. "Now the company has introduced a '180 management system'. Products with a shelf life of more than 180 days are divided into yellow, red, and dark states. Warehouse managers check product dates every day according to the system. When some products reach the yellow or red state, the system immediately alarms, and the warehouse manager immediately notifies the marketing department to formulate a handling plan as soon as possible." Zhang Dongshang said that only professional people managing professional brands and keeping an eye on every product can prevent problems before they occur. Handling inventory, every distributor has their own methods, just like the Eight Immortals crossing the sea. But some thoughtful distributors say that by referring to the development models of advanced countries, further improving the sales system can solve inventory problems from the front end. "For example, Dell Company determines production based on orders, so there will be no oversupply, and producers and sellers will not be troubled by inventory pressure." Following this line of thought, food manufacturers undoubtedly need to continuously improve product quality and build strong brands to achieve the ideal state where demand determines production capacity. For now, distributors still need to rely on themselves to get through the inventory pressure. (Some distributor and company names are pseudonyms as requested by interviewees) Source: Food Board (ID: tyjspb) At the request of many distributor friends, the fourth B2B e-commerce inspection class of this public platform will go to Nanjing and Hangzhou from August 15-18 to inspect Qianmi Network and Alibaba Retail Link. Distributor friends interested in transformation can join us for on-site inspections: Activity process: Time: August 15-18

15th: Check in at designated hotel in Nanjing; 16th: Inspect Qianmi Network, take high-speed rail to Hangzhou in the afternoon; 17th: Participate in the "FMCG Distributor B2B Transformation Exchange Summit"; 18th: Inspect Alibaba Retail Link in Hangzhou; Distributor friends interested in transformation are welcome to join us to learn and inspect on-site: Organization Form ************1. Company visit

  1. Actual market case visit
  2. On-site explanation
  3. One-on-one communication************ Participating distributor friends only need to pay a registration fee of 200 yuan Other expenses are self-paid Note: This inspection is limited to distributors only Distributor friends interested can long press the QR code below to register. When adding, please note: "Fourth Registration". Non-participants please do not disturb Group photos of previous inspections: Group photo of the 3rd B2B e-commerce inspection, from top to bottom: Yunbao Shangmeng, Weijie Chengpei, Wanshang Yizhan. Group photo of the 2nd B2B e-commerce inspection, from top to bottom: Jinhuobao, Caiba, Yishang. Group photo of the 1st B2B e-commerce inspection, from top to bottom: Piduoduo, Beiquan, Yishang. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and down-to-earth tutorials for companies 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 | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operation management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation method strategy | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation | [Long press QR code to follow]