Click 'Read Original' for details. " Inventory, fuel costs, and wages are the three boulders weighing down distributors. In a market environment where costs keep rising, distributors must solve these three problems to make money. " Market competition is intensifying, and the entire FMCG industry has entered a true era of thin margins. However, downstream expenses such as delivery, labor, and warehousing are increasing at a rate far exceeding official GDP growth. Upstream manufacturers are becoming increasingly harsh and tough, while downstream supermarkets pile on various fees. If this trend continues, bankruptcy may be "just around the corner." Market capacity is declining, operating costs keep rising, and manufacturers, in order to stay competitive, leave us with increasingly "reasonable" profits. Under the combined influence of internal and external factors, distributors seem to be in a desperate situation, and many once-thriving distributors are starting to retire or switch industries. But in the current market economy, are there still untouched pieces of cheese waiting for you? And entering a new industry requires even more effort. So the best choice is to stay in the familiar industry, find good methods, and adapt to the current competitive environment. So to make money, you must first control costs. To control costs, you must first truly analyze where your costs are and what your main expenses are. Through consulting several distributors, the three major stones weighing on distributors are: inventory, wages, and fuel costs.

  1. How to cut inventory? A market with monthly sales of 500,000 yuan typically maintains inventory of around 250,000 yuan. This means you have 250,000 yuan tied up in the warehouse every day, generating no value. If you could control inventory to 100,000 yuan, you would have 150,000 yuan of liquid capital to invest. But how can you control reasonable inventory without affecting normal sales? First, we need to understand what is reasonable inventory. Some customers say to keep it within 40%, and at most not exceed 60%. These are judgments based on experience, but experts tell us: Safety stock = (daily maximum sales - daily minimum sales) × order cycle. If your market has monthly sales of 600,000 yuan, with a maximum daily sales of 40,000 yuan and a minimum of 15,000 yuan, then your inventory should be (40,000 - 15,000) × 3-day order cycle = 75,000 yuan. If you don't believe this and think it will lead to stockouts, I can responsibly tell you that our company basically achieves this. If you follow your experience, then with company sales of 60 million, inventory should be 30 million, but in reality, the company's maximum inventory is only 6 million. How does the company do it? It's simple: arrange production according to your orders, and the products produced are already sold. But how can distributors achieve this? You need to predict your sales demand for the next three days. To do this, you need to fully understand the sales situation of the customers you do business with, and you need to establish channel sales tracking, using sales tracking to forecast sales for the next three days—that is, online management. If you can't do this, your inventory cannot be reduced, and if you do reduce it, you will face stockouts.
  2. How to control fuel costs? Many distributor bosses manage fuel costs based on sales or comparisons with other vehicles, without specific evaluation indicators. Vehicle A sells 7,000 yuan with fuel costs of 110 yuan, while Vehicle B sells 4,000 yuan with fuel costs of 40 yuan. Which vehicle performs better? Some say A, some say B. Neither is reasonable because without standards, you cannot evaluate whether value is created. After communicating with many distributor friends, a typical vehicle running to townships has daily fuel costs of 60-80 yuan, sales of 4,500-7,000 yuan, visits 30 customers, closes 12-15 deals, with a closing rate of around 50%. How to control fuel costs? It's actually simple: don't visit customers who don't want goods. This saves time and avoids the fuel loss and wasted time from stopping and starting. How to make effective visits? It's also simple: divide areas, build routes, and classify outlets. Some stores are visited every three days, some every six days, some every half month... Vehicles should strictly follow routes and visit according to outlet level, spending limited time on the most valuable customers. If some townships are truly remote, and a vehicle spends more than 3 hours on the road (round trip), how can you operate effectively? It's simple: find a special agent in that township to handle operations.
  3. How to optimize personnel and resource allocation? Many distributors also allocate based on past experience rather than the current number of outlets or channel forms. Because many distributors don't even have basic channel data, how can they talk about channel management? If you don't know your channel status, how can you know how many people to allocate and what salary levels? Some channels may already have over 90% distribution coverage and need maintenance; you can assign a worker at 2,000 yuan to complete replenishment. Some routes have many blank outlets and need salespeople with strong development skills, possibly requiring a salary of around 5,000 yuan to hire slightly more capable sales staff. Some routes have many special outlets, so you need to arrange people with strong negotiation skills... Your vehicle allocation should also be based on the number of outlets and sales forecasts, avoiding the situation where some customers get on the vehicle but don't bring back sales, and the vehicle is idle half the month. If you divide areas, build routes, and classify outlets, you can standardize visits and reduce fuel costs. If you implement online management, you can minimize inventory and cut inventory costs. Only when you truly understand your channel situation can you reasonably allocate vehicles and personnel, and control or eliminate unnecessary waste and blind resource increases. Only with complete outlet data can you make targeted responses in distribution rate, product items, and flavor management, thereby increasing sales and profits. Money is earned, not saved—that was true in the early market economy. As times evolve, you not only need to know how to earn money, but also need to improve your process management to cut unnecessary cost waste and increase overall profits. If you want to cut costs and increase profits, you must replace the traditional habit of relying on feelings or memory with the modern marketing system that Coca-Cola, Pepsi, and even Master Kong have long been using: inventory outlets, classify outlets, online management, and standardized visits. Distributor friends, are you ready to standardize visits, cut costs, and increase profits to welcome the spring of profits? If you believe the above viewpoints, it means your profits have already started to increase. Source: Distributor's Home -END-