---
title: "Salespeople: Are They Really Crushing Distributors?"
description: "Should salespeople push inventory onto distributors? What happens when such pressure crushes them? This article discusses how pushing inventory exploits distributors as a reservoir, and argues that manufacturers should focus on sell-out rather than sell-in, citing Coca-Cola's 1.5x inventory principle and a story where Coca-Cola rented a warehouse to avoid overloading distributors."
author: "谭长春"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-06-06"
language: "en"
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---

# Salespeople: Are They Really Crushing Distributors?

> Should salespeople push inventory onto distributors? What happens when such pressure crushes them? This article discusses how pushing inventory exploits distributors as a reservoir, and argues that manufacturers should focus on sell-out rather than sell-in, citing Coca-Cola's 1.5x inventory principle and a story where Coca-Cola rented a warehouse to avoid overloading distributors.

**Introduction:**
Should salespeople push inventory?
What if pushing inventory crushes the distributor?
**Pushing inventory exploits the distributor's reservoir function**
A recent article described a distributor who gave up a brand they had carried as a main product for six years and had been profitable. The reason was that the manufacturer's salesperson ignored their survival and just pushed inventory.
This is a common situation.
But should reality be like this?
It is a fact.
But the fact should not be entirely so.
Since the enterprise is the product owner, partnering with distributors is to have them distribute the product. Distribution should have one primary function: the **sewer function**, to channel products to various places. But because the end of the sewer is the consumer, the flow (i.e., purchase) may not be smooth and might get clogged, so another popular intermediary function emerged: the **reservoir function**.
As enterprises use this sewer function more and more smoothly, and some do not treat distributors as partners but merely use their value, they frequently, vulgarly, endlessly, and without regard for the distributor's survival, push inventory, eventually crushing the distributor.
**Why 1.5 times inventory?**
Coca-Cola has a 1.5 times inventory principle for channel stocking. I believe colleagues in the FMCG industry are familiar with it, but at Coca-Cola, I never heard a precise explanation of why the inventory value is 1.5 times; it might just be an optimal value derived from global Coca-Cola operations. But 1.5 times inventory should basically reflect distributor acceptance, a reasonable market inventory level, and the enterprise's ability to alleviate some inventory pressure.
Indeed, at Coca-Cola, although this basic standard exists, in practice it was not strictly followed. It was a natural result after both parties negotiated purchases.
Of course, for large brand enterprises, even if there is inventory pressure, they will provide the maximum possible support from the head office to help promote and relieve the distributor's inventory.
**It's not SELL IN but SELL OUT**
Why can't enterprises push too much inventory on distributors? Because the real sale and collection of payment ultimately depend on selling out (sell out), not on the distributor buying in (sell in). This is basic sales knowledge.
Because many enterprises, regardless of whether the distributor sells, simply treat it as a "trade" and push the goods to the distributor and then ignore them, such cooperative relationships will mostly collapse. I remember the first lesson at Coca-Cola was to instill this concept: cooperation with distributors should not be trade, not just a trade partnership, but a true partnership, jointly achieving sales performance and work goals through consumer purchases.
In reality, many enterprises are actually engaging in trade relations under the guise of distribution and cooperation. Once the distributor pays and the goods are shipped, the enterprise basically stops caring, and the salesperson disappears. They consider it all done.
Since it is trade, not asking about sell out, then at least they should give the trader more market operation expenses or support.
**The former Coca-Cola: swore never to push distributor inventory**
This is a true story.
Back then, Coca-Cola in China already had high market share and sales, and carbonated drinks were always questioned and sales were stagnant, so the sales team's pressure was quite high. The leadership always required monthly sales targets to be met; you couldn't say that if this month's sales weren't completed, next month you would make up for it. This strategy, common in other enterprises, was not possible here. This put even more pressure on frontline salespeople.
Around the 20th of a certain month, the leader held a meeting with the sales team, calculated the possible sales for the month, and after summing up, found that no matter how hard they tried, there would still be a gap and the target would not be met! (Of course, in Coca-Cola's sales process, there were supporting market and promotional measures; sometimes a salesperson even had five or six activity policies at once!) There was no way around it; Coca-Cola basically had to complete tasks every month, and we never saw a month where the task was not completed. What to do?!
In the end, the general manager, to avoid pushing unlimited inventory on distributors, rented a separate warehouse and issued sales orders to achieve the target! (This means that in the closed loop of sales orders and delivery, the goods were sold out.)
Although extreme and perhaps even unreasonable, costing the company money and effort, it was done to avoid damaging the friendly partnership with distributors, to avoid bursting the distributor's already fragile "reservoir" function, and to avoid destroying the truly capable channel.
Afterwards, when some distributors learned of this, the regional Coca-Cola bottling plant's management and sales teams earned the unanimous respect of the distributors, and it strengthened the distributors' confidence in cooperating with such a company.
Pushing inventory on distributors without limits is like killing the goose that lays the golden eggs; it will definitely end in multiple losses! Even to the point of terminating the distribution cooperation as mentioned in the article, and the entire market collapsing. Although some frontline personnel take preventive measures and have already prepared replacement distributors, such practices, if spread, will also harm the entire distribution channel. Imagine if the article is true and the distributor knows it's the brand they cooperate with; won't they be more cautious in future cooperation?
In short, manufacturers should not, for a little sales volume, end up crushing the entire channel!
**Enterprises and channel partners face more severe tests**
Of course, with the advent of the mobile internet era, mobile internet has brought tremendous changes to channel construction, channel operations, and even channel relationships, and traditional channels will face more severe tests.
How can we achieve new methods and paths that do not harm the original channels but are truly useful and effective, to achieve sustainability in market operations, rebuild the channel system, and achieve sustainable and healthy growth in market and sales performance?
E-commerce will enter the new retail era that Ma Yun mentioned, and pure e-commerce will soon disappear. This also means that the factors disrupting channels under the new situation have weakened, and a new pattern of channel transformation may take shape. This is a good time for us to discuss channel construction under the new situation. We have prepared seats and tables and will invite you to join the **"Channel Construction under the New Situation"** discussion group. On June 8th (this Thursday), Teacher Tan Changchun will lead you in a thought feast on channel transformation.
Will you come? Scan the QR code below, add the editor's WeChat, and we'll pull you into the group. When adding friends, note: "6.8 registration." Limited spots; first come, first served!
**Preview of the main discussion sections:**
1. Was your original application of channels wrong?
2. The essence of business hasn't changed, but how has the essence of marketing changed?
3. Have channels really been disrupted? How were they disrupted? Why?
4. Channel construction under the new situation: every path is a new future!
1. Social e-commerce
2. Mobile, social, and data-driven development for distributors
3. The second sales force
...
**About Teacher Tan Changchun:**
**Of course, you can also leave a message in the comment section to provide suggestions for the lecture. There are prizes!**
There are surprises for comments and replies! The comment with the most likes will win a signed copy of Teacher Tan Changchun's book **"FMCG Marketing and Channel Management"**! This book is recognized as the first marketing book in the consumer goods industry and is the most reprinted practical industry experience book, truly rare.
-END-


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