--- title: "Sales Revenue Tripled, Yet Delivery Drivers Halved: How Did She Do It?" description: "Liaoning Anshan Hongye Hengda Trading Co., Ltd., founded in 1996, became the general agent for Arawana (under Yihai Kerry) in 2004, and by 2009, it was the first distributor in Northeast China to exceed 10,000 tons of small-pack oil. From 2013 to 2019, annual sales grew by 350% and average net profit by 500%. Despite being in a third-tier city, it ranks first in sales of Arawana Vitamin A Pure Fragrant Soybean Oil among hundreds of cities nationwide, and first in rice, flour, and dried noodles in Northeast China." author: "新经销公开课" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2020-01-09" categories: "Management & Methods, Supply Chain & B2B" language: "en" canonical: "https://xinjignxiao.com/en/articles/sales-revenue-tripled-yet-delivery-drivers-halved-how-did-she-do-it-400b5516/" markdown: "https://xinjignxiao.com/en/articles/sales-revenue-tripled-yet-delivery-drivers-halved-how-did-she-do-it-400b5516.md" original_source: "https://mp.weixin.qq.com/s/g7wH1Kf5vCU56zKeK9cIKQ" translation: "https://xinjignxiao.com/zh/articles/%E9%94%80%E5%94%AE%E6%94%B6%E5%85%A5%E5%A2%9E%E9%95%BF3%E5%80%8D-%E7%89%A9%E6%B5%81%E9%85%8D%E9%80%81%E5%8F%B8%E6%9C%BA%E5%8D%B4%E5%87%8F%E5%B0%91%E4%B8%80%E5%8D%8A-%E5%A5%B9%E6%80%8E%E4%B9%88%E5%81%9A%E5%88%B0%E7%9A%84-400b5516.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/sales-revenue-tripled-yet-delivery-drivers-halved-how-did-she-do-it-400b5516/" citation: "新经销公开课. “Sales Revenue Tripled, Yet Delivery Drivers Halved: How Did She Do It?.” New Distribution, 2020-01-09. https://xinjignxiao.com/en/articles/sales-revenue-tripled-yet-delivery-drivers-halved-how-did-she-do-it-400b5516/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Sales Revenue Tripled, Yet Delivery Drivers Halved: How Did She Do It? > Liaoning Anshan Hongye Hengda Trading Co., Ltd., founded in 1996, became the general agent for Arawana (under Yihai Kerry) in 2004, and by 2009, it was the first distributor in Northeast China to exceed 10,000 tons of small-pack oil. From 2013 to 2019, annual sales grew by 350% and average net profit by 500%. Despite being in a third-tier city, it ranks first in sales of Arawana Vitamin A Pure Fragrant Soybean Oil among hundreds of cities nationwide, and first in rice, flour, and dried noodles in Northeast China. Liaoning Anshan Hongye Hengda Trading Co., Ltd., founded in 1996, became the general agent for Arawana (under Yihai Kerry) in 2004, and within just five years, by 2009, it became the first distributor in Northeast China to exceed 10,000 tons of small-pack oil. From 2013 to 2019, annual sales grew by 350% and average net profit by 500%. Although Hongye Hengda is located in a third-tier city, it ranks first in sales of Arawana Vitamin A Pure Fragrant Soybean Oil among hundreds of cities nationwide, and also ranks first in rice, flour, and dried noodles in Northeast China. Today, Hongye Hengda has become a "star distributor" in the industry. Founder Ms. Xu Min and President Mr. Li Feng have been invited multiple times by Yihai Kerry to provide training for its distributors and mid-to-senior marketing managers. New Distribution Open Course believes that such an excellent distributor deserves to be understood and learned from by all distributors in the industry. To this end, **New Distribution Open Course, in collaboration with Ms. Xu Min and Mr. Li Feng of Hongye Hengda, launches the "Distribution Practice Column," through their firsthand accounts, to give you an up-close look at the reform and transformation of Anshan Hongye Hengda.** (This issue focuses on the compensation management of delivery personnel in Hongye Hengda's logistics department.) **-01- In 2012, Delivery Drivers Who Showed Up but Didn't Work** In 2012, Hongye Hengda's annual sales were close to 100 million yuan, with 15 delivery trucks at headquarters and 4 at three branch companies. The logistics department's compensation plan was: 1,800 yuan base salary + commission (percentage of delivery amount). Each truck had one driver and one loader (grain, oil, rice, and flour are heavy goods), with an average monthly salary of about 2,500 yuan per person. Xu Min recalled that logistics staff had no motivation at all. Although it was commission-based, drivers seemed satisfied with the 1,800 yuan base salary, and the 700 yuan commission was not enough to drive them to work harder. **The difficulties faced by the logistics department at that time were:** > 1. A box truck with a capacity of 7 tons: if loaded with more than 5 tons, the driver would find ways to request an additional loader, forming a three-person team, otherwise they would refuse to depart. > 2. Regardless of whether the goods were fully delivered, they would return to the company by 4:30 PM and wait to clock out at 5 PM. > 3. Whenever vehicle maintenance was needed, the delivery staff would be "in high spirits." > 4. The department was in chaos; laziness and fuel theft were common, and turnover was high. In the past, deliveries were assigned by route; once an employee left, a new delivery person would need at least a week to become familiar with the route and deliver normally. Facing these challenges, Xu Min kept thinking about **how to effectively solve the problem of "showing up but not working" in the logistics department. Whether increasing base salary or raising commission rates seemed to treat symptoms rather than the root cause; simply raising income might not fundamentally solve the problem.** **-02- Inspiration from a Taxi Driver** Once, Xu Min took an early morning flight to Chengdu and hailed a taxi at 5 AM to the airport. On the way, an unintentional conversation with the taxi driver gave Xu Min a huge inspiration. Xu Min recalled asking the driver, "You must work hard, starting at 5 AM. How many hours do you drive a day?" The driver said, "We drive at least ten hours a day. There's no choice; whether we go out or not, we have to pay the daily rental fee." These simple words made Xu Min think: isn't carrying passengers the same as carrying goods? **Could Hongye Hengda's drivers be like taxi drivers, paying a fixed daily rental fee, and the more they work, the more they earn? Whether they deliver or not, and no matter how much they deliver, they pay a daily rental fee.** After the business trip, Xu Min began calculating the "fixed rental fee": > 1. A truck worth 100,000 yuan, depreciated over 10 years to a daily rate, gives a daily depreciation of 30 yuan/day. > 2. Vehicle maintenance, based on last year's total maintenance costs converted to a daily rate, gives a daily maintenance fee of 5 yuan/day. > 3. Annual vehicle insurance converted to a daily rate gives a daily insurance fee of 15 yuan/day. Adding these together, the average fixed "rental fee" per truck per day is 50 yuan, and the monthly "rental fee" is 1,500 yuan. This is the fixed vehicle cost component. In addition, based on last year's actual usage, variable costs average 1,500 yuan/month for fuel per truck, 500 yuan/month for repairs, and 250 yuan/month for traffic fines. For employee expenses, in 2012, the average income of delivery workers and loaders in Anshan was 2,500 yuan. Calculated at 20% above the average, the average income was 3,000 yuan. One truck (1 delivery worker + 1 loader) costs 6,000 yuan in personnel expenses. Based on a daily delivery volume of 5 tons per truck, the total monthly cost is 1,500 (fuel) + 6,000 (personnel) + 1,500 (fixed costs including depreciation, maintenance, insurance) + 500 (repairs) + 250 (traffic fines), totaling 9,750 yuan/month. With a monthly delivery volume of 150 tons per truck, the average cost per ton delivered is 9,750 / 150 = 65 yuan/ton. Xu Min said, **Once the minimum unit cost was determined, Hongye Hengda began implementing the delivery "contract system." That is, delivery workers are paid based on the tonnage delivered, with each truck as a unit.** What does that mean exactly? **Delivery workers have zero base salary; for each ton delivered, they receive 65 yuan per truck. Additionally, regardless of whether they work or not, each truck must pay a fixed "rental fee" of 50 yuan per day.** **Note: 1. The above chart estimates employee income based on different delivery volumes; as single-truck delivery increases, income rises significantly. 2. Variable vehicle costs (including fuel, repairs, traffic fines) increase proportionally with delivery volume.** **-03- In 2019, Sales Increased by 350%, but Delivery Staff Decreased Instead of Increased** Xu Min recalled that after this new system was announced, they ran it for two months to let delivery workers gradually adapt. When they saw a significant increase in income, the contract system completely replaced the original form by the third month. Of course, it wasn't just an increase in work enthusiasm; the overall work state and atmosphere also quietly changed. Every day, logistics staff arrived at the company at 7 AM and proactively applied to the supervisor for routes with more deliveries. They loaded and departed before 8 AM and only finished work after completing all deliveries. Moreover, **the new system brought another change: originally, each truck was staffed with two people, but after six months, delivery workers automatically "eliminated" the loaders on the trucks. One person took the income of two.** After 2013, the delivery department fully achieved one person per truck, responsible for both driving and carrying goods into stores. During peak seasons, when delivery volume exceeded capacity, delivery workers would spontaneously bring family members to assist, with a record of three trips a day and 20 tons delivered. According to Xu Min, now more than 50% of Hongye Hengda's delivery workers earn an annual salary of over 100,000 yuan. Even in 2019, with a 350% increase in sales compared to 2013 and four branch companies, Hongye Hengda still has 19 delivery trucks. Additionally, the number of logistics employees has been reduced to 19. Behind the high income, another thing emerged. Xu Min said, "Because employees' wages are higher, I dare to manage people. I can set high standards for goods loss, goods entering stores, returns, etc. High compensation combined with performance standards has significantly improved the service quality of delivery workers." Xu Min sighed, "Guaranteed 24-hour delivery, and customers can tell us where to put the goods!" This is no longer just a slogan, but our basic guarantee. **With better service and stronger customer relationships, when front-line sales staff visit stores, store owners are more willing to recognize Hongye Hengda, dare to accept more products, and dare to accept new products. Naturally, Hongye Hengda's sales increase faster!** --- ## Citation metadata - Publisher: New Distribution - Author: 新经销公开课 - Published: 2020-01-09 - Canonical: https://xinjignxiao.com/en/articles/sales-revenue-tripled-yet-delivery-drivers-halved-how-did-she-do-it-400b5516/ - Original source: https://mp.weixin.qq.com/s/g7wH1Kf5vCU56zKeK9cIKQ ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671