Difficulties Encountered by Distributors in Assessment and Management (1) Sales staff are all long-term employees, management is human-oriented, few rules are set, and penalties for some employees are hard to enforce. (2) Staff shortages during peak seasons. (3) No process-based performance indicators; personnel serving sub-distributors lack business functions (mainly delivery). Direct-supply outlets are too few, below 10%, so we need to increase the direct-supply rate and cultivate staff quality. (4) No assessment for those serving second-tier wholesalers; staff lack market development ability, purely doing physical labor. We have always wanted to assess these people, but they resist, lack market development skills, and complain about hard work and low pay. We plan to replace them and improve staff capability and quality. (5) Commission calculation is too simple, lacking incentives for promoting specific products, mainly because no new products have been introduced for a long time. (6) Imbalance between regions and outlets leads to income disparities among salespeople. Fines are hard to enforce, and staff turnover is high. (7) Delivery staff change frequently within 1-2 years due to hard and dirty work, which locals are unwilling to do. Sometimes during peak seasons, employees collectively resign demanding pay raises; later, some return without raises, while others leave permanently. (8) Unable to set specific assessment indicators; rewarding is easy, but penalizing is difficult. Product range is single, only high-end liquor, making it hard to penetrate village-level outlets. (9) During peak seasons, employees take leave, and we are overwhelmed. (10) Employees with 1-3 years of tenure become hard to manage over time. Their business skills are low, discipline is poor, and they often take leave; the full-attendance bonus is not attractive to them. (11) Need to determine if our ideas are feasible; sales are high, but profits are low, expenses are large, and there is no detailed breakdown of expense investment and flow. (12) White liquor employees earn similar wages to beer employees, but beer work is heavier, leading to high turnover. A team that sells beer in summer and white liquor in winter cannot cultivate good salespeople. (13) Unable to solve the problem of layoffs; work efficiency is low, and service is poor. (14) A few years ago, we proposed stabilizing employees, but after stabilization, many problems emerged with old employees: 1. They don't visit difficult customers (they know the outlets too well); 2. Service attitude declines (because products sell well); 3. They don't adapt to basic tasks (like arranging promotional materials, shelf restocking, etc.). (15) Wage issues and workload issues. Employees choose jobs with lower workload. Confusion: employees are lax, rules are incomplete, and we only subjectively judge whether employees work hard. (16) The 'big pot' management has been running for many years, and staff turnover has made delivery management difficult. Five Preventive Measures to Avoid Distributors Going Astray (1) Substitution: Selling counterfeit products can be more profitable than genuine ones, so some may secretly sell fakes for extra income. If the land was meant for grain, tenants might secretly plant sorghum! (2) Self-destruction: Delivering goods to others' territories may earn more, but then they might even dump goods at low prices into those areas. (3) Overdrawing resources: Contractors always prioritize profit maximization, not sustainable market development. Intercepting, diverting, altering promotions, raising prices on new products, or clearance sales are common tactics used by salespeople. (4) Setting up independent operations: After market contracting, terminal outlet relationship maintenance is transferred to the contractor, and salespeople may be tempted to become bosses themselves. Once the opportunity arises, they might start their own brand while still working. (5) Living off past gains: Distributors can contract out because they have already established the market, often with a best-selling product. Contractors dare to take over because of this. However, due to fragmented operations, price systems gradually become chaotic, outlets are lost bit by bit, and competitors erode advantages until they are completely lost. Implementing these five preventive measures is to avoid distributors becoming 'absentee bosses' and reaping unintended results. Four Stages of Distributor Management For distributors, improving internal management involves four stages. Alternatively, distributors can be classified into four types from a management perspective. Stage One: The 'Big Pot' Stage. Characteristics of the 'big pot': (1) Rewards are the same regardless of performance; everyone gets a share whether they work or not. (2) Typical of mom-and-pop shops, small distributors, and family businesses. Core problem: Either cannot afford to hire salespeople or cannot retain them. Core contradiction: Distribution system and employment system. Core tool: Financial system. Accounts are chaotic, or only a simple cash book exists; bookkeeping is not for management, and some records are even kept on tissue paper. Self-check for 'big pot' clients: Accounts: Sales, expenses, and surplus up to today. Bad debts: Payment terms (reasons for growth or decline). Advice: Profit or loss is not scary; what's scary is not knowing where profits come from or where losses occur! First step for 'big pot' clients to change: Commission system! Stage Two: Commission-Based Stage. Commission system: Base salary + commission. Characteristics: More work, more pay. Two phases: (1) High base salary phase: 1. Initial implementation; 2. Probation period for new employees. (2) Low base salary, high commission phase: 1. Business mature; 2. Personnel mature. Regions should be fixed, and indicators can be promoted after successful simulation experiments (to prevent large income fluctuations and unstable morale). Consider peak/off-season indicators or commission reserves. Commission methods: (1) Sales-based commission (on collected payments), which may lead to dependence on old products. (2) Per-product commission—differentiated by product and tier. All salesperson income comes from commission, provided that the brand is stable, regions are fixed, indicators are mature, and the team is stable. Key core of commission system: Financial support, indicator setting, regional division, and brand stability. Stage Three: Contract System. Small contract: Personnel, vehicle, expenses. Key point: Indicators. Large contract: Personnel, vehicle, expenses, market. Personnel, vehicle, expenses, market + brand. Key point: Sovereignty. Warning: Prevent loss of sovereignty, substitution, and a mess! Stage Four: Business Unit System. Definition: The business unit system divides departments according to the business operated, including by product, region, or customer (market), establishing several business units, also called branches. Four supports: Mature management tools, mature management systems, stable team structure, and stable profit model. Three elements: Relatively independent market, relatively independent interests, and relatively independent autonomy. This article is excerpted from Mr. Fang Gang's book "FMCG Veterans All Do This: Regional Manager Playbook Tips." To purchase this book, please click "Read Original" If you find this article good and want to communicate with the author, please long-press the QR code below to add Mr. Fang Gang's WeChat, and reply: Study -END- The best FMCG distributor learning platform in China Focusing on 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 corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]