Returns are a headache for many distributors. With limited product margins, if returns cannot be reduced and controlled, all hard work may be in vain. While returns are inevitable, they can be minimized. Here are 12 practical tips shared by distributors to effectively reduce and control product returns.
Choose products that match local consumption habits Consider factors such as package size, packaging form, price level, and taste (sweet or salty). Some markets sell better with bulk items, others with large packages, and some with low-priced products.
Adjust assessment methods according to the season For example, summer is the off-season for snack foods, so a salary structure with high base pay and low commission is suitable, focusing on market development rather than sales volume. In autumn and winter, the peak season, a low base pay and high commission structure is better, with sales volume as the main assessment. This prevents salespeople from overstocking in summer to meet targets and earn commissions, which ultimately leads to returns.
Understand the sell-through performance of each outlet Stores with good sales can receive more stock, while those with poor sales should get less or even none.
Check the customer's warehouse inventory before delivering Delivering without checking inventory ultimately harms the distributor's interests. I have visited many markets and seen large quantities of unopened cartons returned, which is the result of salespeople not checking warehouse stock. For such returns, it is recommended to deduct three times the sales volume from the salesperson's record.
Visit the market frequently and ensure first-in, first-out (FIFO) Don't just deliver and forget. Every time you visit a store, check the production dates and place newer products behind older ones on the shelf.
Set a reasonable pricing system and profit sharing If prices are too high, products sell slowly; if profits are too low, distributors won't push the products, also slowing sales. Slow sell-through leads to more returns.
Promptly collect products past two-thirds of their shelf life Break down bagged products into bulk, and gather bulk items to run promotions or special offers at high-traffic stores.
Have a few stores with good sales and strong relationships that can handle older-dated products Collected returns should not sit in the warehouse; they must be quickly sent to these stores for promotions or clearance.
Adjust delivery conditions as needed For example, in the off-season, consider delivering half-cases or mixed flavors per case. Don't find it troublesome; this not only sells goods and makes money but also reduces returns and losses, and even creates a "false impression" of good sell-through.
Do a good job with basic store displays Displays should not only be plentiful but also high quality. Also, have the awareness that "display is a resource." After delivering, don't just collect payment and leave; promptly put products on the shelf. Even if shelf space is tight, squeeze in somehow.
Make reasonable use of gifts (premiums) provided by manufacturers During market visits, I found that some distributors' warehouses still had gifts from our company from five years ago. It's easy to imagine that their returns are substantial.
Develop special channels Channels such as banquet markets, prisons, bus stations, and train stations can help clear older-dated products.
Choose appropriate dates for outdoor clearance events For example, during major holidays, or in places with market days, outdoor events can be held to clear older-dated products.
Returns are inevitable but can be reduced and controlled. The key is whether distributors are willing to find solutions, take measures, and implement plans.
Still troubled by returns?
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