Pain point! When I mention "returns"! I know many distributors get a headache. But you can't help but read this article. Yes, returns are annoying. With limited product profits, if we can't reduce and control the return rate, then all our hard work and efforts will be in vain. However, it's normal that where there are shipments, there will be returns. But how to effectively reduce and control product returns? Below, I'll share with you some better methods for handling such issues.

  1. Returns caused by 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 are requirements but they are not taken seriously, thinking that new product promotion is difficult, has low sales volume, is time-consuming and labor-intensive, and not worth the effort, then the boss and salespeople may develop a fear of difficulties 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 reasons to request returns.
  2. Adopt different assessment methods in different periods. For example: Summer is the off-season for leisure food, so it's suitable to adopt a salary structure of high base salary + low commission, focusing on market development without special sales assessment. Autumn and winter are the peak seasons for leisure food, so it's suitable to adopt a salary structure of low base salary + high commission, focusing on sales assessment. This can avoid distributors' salespeople stocking up in summer to complete tasks and earn commissions, ultimately leading to returns due to overstocking.
  3. Returns from secondary wholesalers. Secondary wholesalers sell a variety of products, and sometimes neglect warehouse management, not following the first-in-first-out principle, or rarely taking inventory. When they find near-expiry products at the bottom of the warehouse that cannot be sold, they request the distributor to accept returns or exchanges. If the distributor refuses, it may harm the relationship or even lose the customer; if they accept, the distributor will suffer unnecessary losses.
  4. Returns from terminal stores. Whether it's a KA supermarket or a small terminal store, near-expiry products occasionally appear. The main reason is that sales staff do not maintain and follow up properly, resulting in near-expiry products. For example, not conducting periodic visits according to the planned route, skipping stores, and some stores that are not maintained for a long time are prone to near-expiry products. Also, if the store owner or staff lack awareness of first-in-first-out product management, and if our sales staff are not attentive or fail to notice and regularly tidy up the products, then terminal stores are more likely to have near-expiry products. Additionally, during holidays, overstocking can cause returns from supermarkets. Regardless of the cause of near-expiry products, distributors must resolve them for terminal stores.
  5. Frequently visit the market and ensure first-in-first-out for products. Visit the market more often, and don't just deliver goods and then ignore them. Every time you enter a store, remember to check the production dates of products, placing new-date products at the back of the shelf and old-date products at the front.
  6. Establish a reasonable price system and profit distribution. If prices are too high, product turnover is slow; if profits are too low, distributors won't actively promote the product, and turnover will also be slow. Slow turnover results in more returns.
  7. Products past two-thirds of their shelf life should be collected promptly. Timely convert bagged products into bulk sales, and collect bulk products to concentrate on stores with good sales for special offers or promotional activities. So, how can we effectively control and avoid this?
  8. Require secondary wholesalers and terminal stores to strictly manage product inventory and shelf displays according to the first-in-first-out principle. Our sales staff should not only understand this themselves but also make the owners and staff of secondary wholesalers and terminal stores understand this principle. Moreover, they should help them develop a habit of consciously managing inventory and ensuring safe stock levels.
  9. When new products arrive at the warehouse, they must be distributed to terminal stores as quickly as possible, generally within one week. After distribution, sales staff must ensure attractive displays in every store. Only then can new products generate turnover and sales.
  10. When products are two to three months away from their expiry date, concentrate these products in local supermarkets with good sales and use special offers or other promotional methods to sell them in one go, thus greatly reducing the possibility of returns.
  11. When sales staff visit customers daily, in addition to specifying areas, performance targets, visit routes, number of stores to visit, number of deals to close, and minimum transaction volume per store, also include assessment of attractive displays. The above is for reference only; when putting it into practice, you need to adapt to actual circumstances. Sometimes distributors and terminals are like cats and mice, and there must be many more good ideas. Feel free to leave us a message and share your good methods. Source: Efficient Operation of Distributors -END-