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In recent years, with the rapid development of the food industry, more and more distributors have entered the food industry, dreaming of achieving great success. However, facing fierce market competition and pressure from competitors, how can new distributors compete with established local distributors and achieve rapid growth?
New distributors refer to those who have not previously been involved in the food industry, or who were sales personnel for food companies or distributors, and after a period of training and accumulation, have transitioned to become entrepreneurial distributors. Their emergence is a product of the development and progress of the food industry. This article specifically refers to new distributors who have transitioned from sales roles to become their own bosses. Their current situation is as follows:
They have potential and ambition to surpass established players, but due to "shallow experience," they lack experience in product selection, market operations, and team management. In the company's development, they may be rash, impetuous, and unrealistic, hoping to achieve success overnight.
The business is just starting, and the company's brand image and influence have not yet been established. With low visibility, little influence, few customers, and limited products, a trust relationship between the company and customers has not yet formed.
They have a serious "wait, rely, and demand" mentality. Since the company is just starting and has limited resources, they feel inadequate in market operations and hope manufacturers will provide more support to help them through difficulties. As a result, they frequently ask manufacturers for policies, expenses, and support, which leads manufacturers to have negative views of them.
Lack of personnel. In the startup phase, the company is small, with unclear prospects, making it difficult to attract experienced employees.
Case Study
In a certain prefecture-level market, Mr. Li originally worked as a salesperson at his uncle's trading company. After two years of hard work, he rose from an ordinary salesperson to a sales manager, responsible for the sales of a national beer brand and a provincial famous beer brand. He was familiar with nearly a thousand retail stores and C/D-class restaurants in the city and had good relationships with them. Feeling confident, Mr. Li believed that with such excellent network resources, he should start his own business.
Soon, at a provincial sugar, tobacco, and liquor fair, Mr. Li found a beer company and became its agent for the city. After some deliberation, he poached two of his subordinates and set up a new company. He was confident that with his previous relationships with terminals, his agency beer brand would succeed and make money.
However, after several months of market operations, the terminal network and employees he had hoped to leverage not only failed to bring benefits but collectively betrayed him, leaving Mr. Li in deep reflection...
Analysis
Mr. Li's entrepreneurial experience is quite representative. Using Mr. Li as an example, let's analyze the main problems new distributors encounter during their entrepreneurial journey:
1. Blind Product Selection
He chose products without conducting detailed research on the manufacturer's product quality, marketing capabilities, and brand promotion abilities. For example, Brand A offered attractive conditions during the recruitment phase, boosting Mr. Li's confidence. He thought that with his terminal relationships and strong manufacturer support, Brand A would succeed locally and bring substantial profits. But after paying and receiving goods, he found that the new product had low brand awareness, little influence, inadequate brand promotion, and outdated marketing methods. The distribution work was not as smooth as he imagined. The promised support from the company was delayed, and with his limited resources, the product encountered strong resistance during the distribution phase.
2. Overconfidence in Previously Accumulated Network
Pursuing profit is always the nature of channels. When Mr. Li was a sales manager, he had good relationships with terminal stores mainly because the company had built a solid commercial reputation over years of operation, and the beer brands he sold were nationally and provincially famous, bringing substantial profits to terminals. His relationships were based on the company's strong platform. As the saying goes, "Once the person leaves, the tea gets cold." Now that Mr. Li has his own company, terminal stores perceive that the current products have low awareness, little influence, and are not accepted by consumers, thus not bringing them profits. Additionally, they are unfamiliar with his new company's financial strength and business credibility, so the previously accumulated terminal network betrayed him.
3. Serious "Wait, Rely, and Demand" Mentality
Since Mr. Li's company was just starting and had limited resources, and he encountered rejection from his original network during product development, he hoped the company would support him. He frequently asked for expenses, policies, and support. However, the company believed that Mr. Li had not achieved the distribution and sales targets he had promised. Instead of providing support, they developed negative views, fearing that their investment would be wasted. As a result, market operations reached a stalemate.
4. Position Changed, but Mindset Unchanged
Previously, Mr. Li was an employee; he only needed to follow company rules and do his job well, without worrying about the company's operations, finances, or social relations. Now, as his own boss, he must consider the company's development direction and daily operations. Mr. Li was like a passenger on a bus, able to look around or sleep, but now he is the driver, responsible for all passengers. His position changed, but his mindset did not. The company's performance was poor, and promised employee benefits were not fulfilled, leading employees to betray him.
Recommendations
In response to the problems encountered by Mr. Li during his entrepreneurial journey, we propose solutions from the following aspects:
1. Choose Suitable Manufacturers and Products
Select new products from first-tier brands that suit you, as well as promising small and medium-sized brands that are on the rise.
Because large brands have high requirements for distributors' capital, vehicles, personnel, networks, and public relations capabilities, new distributors need not pursue large brands. Even if they manage to partner with a large brand, they may be "abandoned" due to lack of a sound network, sufficient funds, and standardized management. First-tier brands periodically launch new products to fill market gaps. Although these new products may not have high sales volume, there is market demand. Choosing these new products in the early stages can enhance your position and status in the industry. As you learn experience and skills during market operations, successfully managing the market will lay a solid foundation for future development and eventually partnering with first-tier brands.
Additionally, besides mature and large brands, the food industry has many small and medium-sized brands on the rise that also need to build networks. Although their brand power and appeal are not strong, their selection criteria for distributors are relatively lenient. After careful investigation and analysis, choose brands with excellent product quality, high integrity, long-term planning and promotion plans, detailed market operation plans, complete promotional materials, reasonable and formal sales contracts, certain personnel support and market sales strategies, and a willingness to work hand-in-hand with distributors. By leveraging each other's strengths and developing together, you can also ride the fast track to success.
2. Concentrate Resources, Cultivate Intensively, and Replicate
Most new distributors in the startup phase have limited capital, single financing channels, low company visibility and influence, poor operational capabilities, and slow network construction, distribution progress, and sales growth. To survive, establish a foothold, and grow stronger in the fast-paced, complex, and ever-changing market competition, you must focus your human, financial, and material resources on key areas. First, do a small market well, then replicate the success to achieve a "spark can start a prairie fire" effect, such as a few streets or a township. This not only speeds up distribution but also improves sales personnel's practical training, enhancing their business skills quickly.
3. Continuously Develop and Progress to Gain Manufacturer Support
Actively expand the market to maintain a trend of increasing and growing product sales, making the manufacturer feel at ease, reassured, and satisfied. Enhance your value, increase your bargaining power with the manufacturer, and strive for their support. For example, actively cooperate with the manufacturer's various product promotions and sales activities, avoid cross-regional sales, and refrain from low-price dumping, so the manufacturer always feels you are reliable. Do not casually switch brands, complain, or suppress the manufacturer's product sales. Regularly provide reasonable suggestions to the manufacturer on new product development, product quality, pricing, and service.
4. Change Your Mindset and Improve Your Management Skills
With the rapid development of the food industry, new distributors face both entrepreneurial opportunities and risks. Therefore, identify your shortcomings and find motivation to learn. For example, learn from more successful distributors, discuss marketing, management, and product issues with the manufacturer's sales supervisors and representatives, participate in marketing and management training organized by companies, and proactively invite companies to train and guide your sales team.
- National brands lead the high-end market, while local brands dominate regional markets. Seize opportunities when they arise; if none exist, create opportunities to partner with large brands.
When cooperating with large enterprises, seize the opportunity, even if you suffer some losses or endure some frustration initially. Large enterprises have stable product quality and sales, so you don't have to worry about market fluctuations. Additionally, their management is relatively standardized; as long as you follow their operational strategies, they generally won't harm distributors. Of course, profits from large brands may not be as high as small brands, but they have high volume and fast turnover, helping you expand your network, stabilize business resources and partners, and elevate your business level and management capabilities. Therefore, for long-term development, maintain long-term cooperation with large brands and enterprises.
Local products, especially famous local products, should be firmly held. With the development of the food industry, especially the rapid rise of local brands, distributors who seize promising local brands can grow quickly in the short term.
- Train your sales personnel to build a hardworking and motivated sales team.
Employees don't need to be numerous, but they must be capable. The biggest cost in business is not expenses but putting untrained employees into the market. Untrained employees not only fail to produce results but can also disrupt the market. For employees, carefully arrange a business training plan covering five aspects: product knowledge, sales skills, sales processes, sales policies, and key points. If you lack experience in this area, you can request relevant training materials from the manufacturer.
- Establish a stable sales policy to give employees a sense of purpose.
The formulation of sales policies is crucial. Clearly communicate in writing to sales personnel that if they achieve certain performance levels, they will receive corresponding rewards. Salespeople often calculate their returns, so a good sales policy is essential. Two things need to be done: first, formulate sales and incentive commission policies for sales personnel; second, establish commission policies and implementation and verification systems.
- According to manufacturer requirements, execute terminal management, brand promotion, and promotional activities.
The manufacturer's requirements for terminal distribution rate, visual merchandising, inventory management, price stability, brand promotion, and promotional plan execution are aimed at helping distributors earn stable and long-term profits. Distributors should not have any thoughts of bargaining on these matters. As long as distributors actively cooperate with the manufacturer and establish a deep distribution terminal network, the manufacturer will provide full support.
Mr. Li adjusted his company's operational strategy according to the above recommendations. The entire company made every effort to operate a famous local brand. Sales increased from over 1 million yuan in the first year to over 6 million yuan in the second year. The brand's operation was like a Chinese parasol tree, bringing benefits to Mr. Li and attracting golden phoenixes.
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