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I. Overview of Small Stores Small stores refer to small retail terminals that directly face consumers and are located throughout various places. According to the national classification of terminals into 19 categories, small stores specifically refer to grocery stores, franchised convenience stores, and small open-shelf supermarkets. Compared with standard supermarkets and hypermarkets, their competitive advantage lies in greatly facilitating consumers' purchases anytime and anywhere, and small stores are widely distributed and numerous. At the same time, the business area and sales volume of small stores are relatively small, not exceeding 50 square meters, and the product categories are relatively concentrated, mainly local mainstream daily consumer goods and food. However, the importance of small stores is undeniable. For consumers, small stores can quickly and conveniently meet their shopping needs. For wholesalers, small stores are the focus of their distribution network, with low entry barriers and high gross profit levels. If a stable and extensive small store network can be established, long-term stable sales and profit sources can be guaranteed. For manufacturers, extensive small store distribution can quickly increase product visibility and availability locally, and a stable small store distribution network helps improve product loyalty among local consumers, and is also a frontline for consolidating the market and defending against competitors.

II. Sales Objectives and Strategies for Small Stores The purpose of introducing deep distribution in the small store system is to actively and effectively distribute the main product specifications into every small store. Specifically, efforts should be made in the following aspects:

  1. Product: Surpass competitors in category mix, ensuring the main product portfolio is in store;
  2. Price: Strictly implement the manufacturer's suggested retail price, striving for more competitive pricing than competitors;
  3. Display: Fully surpass competitors in shelf space occupancy;
  4. Sales aids: Strictly follow terminal visualization standards in the use of sales aid materials;
  5. New products: Timely distribute and display new products in all target small stores after launch. To ensure the achievement of small store distribution goals, it mainly relies on the construction of three systems and teams: establishing a standardized and efficient sales team to achieve distribution coverage; establishing a smooth and stable distribution system to ensure timely supply; establishing a strict and comprehensive promotion system to achieve terminal sell-through.

III. Small Store Management Operating System Sales team management and distribution management system are the two key aspects of small store operations, with sales team management being particularly important. Establishing and maintaining a proactive and capable sales team, supported by an efficient coverage system, to achieve distribution goals in small stores is the main thread throughout the small store operation management system.

  1. Area Division When dividing the urban area of the target city into several areas with dedicated personnel responsible for distribution coverage, the following points should be noted:
  • Principle of no omission, no duplication, no dispersion;
  • The number of stores in each area should be approximately the same;
  • Each area should have as much as possible the same commercial background (e.g., one area mainly commercial streets, another mainly industrial dormitories, another old city residential streets);
  • The number of small stores in one area should preferably not exceed 120.
  1. Sales Operations On the basis of achieving normal replenishment, sales operations mainly focus on periodic key categories, while ensuring terminal visualization maintenance.
  • Supply price: The supply price to small stores should remain stable, implementing the company's price system policy. (Specific prices depend on local conditions)
  • Payment collection: Payment from small stores should be 100% cash on delivery. In principle, any form of consignment or credit sales is not recommended. (Credit sales can damage the manufacturer's good brand image, and small store owners also believe that only products that do not sell well are consigned; for wholesalers, it increases accounts receivable, reduces capital turnover, and increases huge accounts receivable)
  • Main push: The active promotion by store owners is very important in small store retail. Without the support of store owners, the product is likely to be relatively slow-moving. Over time, store owners will think the product not only does not make money but also occupies their shelf space, so they are unwilling to continue carrying the product.
  • Delivery: The manufacturer provides door-to-door delivery to all small stores through secondary wholesalers, and small store owners can also order by phone.
  • Returns and damage handling: Due to the small sales volume of small stores, returns and damage handling are generally not accepted.

  1. Personnel Management In the sales process, sales representatives have a decisive impact on the distribution coverage of small stores. It can be said that as long as we have a down-to-earth, hardworking, and skilled sales team, we will definitely achieve excellent distribution coverage performance. To achieve this goal,

  2. Configuration

  • The number of sales representatives can be determined by the following formula:
  • Number of sales representatives = Number of target small stores × Store visit frequency (weekly)
  • Store visit frequency is recommended to be once a week during initial coverage
  • Daily visits to small stores are recommended to be 25 stores per day. For example, if the target small stores in a certain area are 1000, with an average weekly visit of once and daily visits of 25 stores, then one sales representative can almost cover this area, so the staffing for this area is one sales representative.
  1. Recruitment Based on the configuration that determines the number of sales representatives and organizational structure, recruitment can begin. For the recruitment of small store sales representatives, the following points should be noted:
  • Determine the number of people needed based on the deep distribution plan;
  • Small store sales representatives should emphasize hard work, enterprising spirit, and responsibility, with less emphasis on education and culture;
  • Divide recruits into two categories: those who are satisfied with the current job and can work stably, and those with room for promotion;
  • Adding a probation period of about one week before starting work can let applicants directly understand deep distribution work, and we can also clearly see whether the applicant is hardworking and has training and development potential.

  1. Training In order to enable sales personnel to have good development prospects and establish a good professional image, training should achieve the following goals: master the basic skills to meet deep distribution standards and provide qualified talent to higher-level sales teams. Considering that small store operations are not highly technical and more about strictly implementing established sales policies, the training for small store sales representatives mainly focuses on communication skills such as sales scripts and objection handling.

  2. Motivation Deep distribution under small store operations is a boring and hard job. It is necessary to provide sufficient motivation to sales personnel to maintain their enthusiasm for work.

  • Daily motivation: Praise and heart-to-heart talks from supervisors in daily work;
  • Institutional motivation: Introduce additional competitive mechanisms for motivation, such as completion rate ranking bonuses, short-term distribution competitions, etc.;
  • Promotion motivation: Clear personal career development plans, with clear promotion conditions and requirements.

  1. Work System By standardizing the work system, the various contents of sales representative management can be specified and institutionalized. As norms to constrain and guide sales representative behavior, although specific situations vary by region and it is impossible to propose a template for a work system, generally it starts from daily operation systems (attendance, work schedule), sales operation systems (route maps, visit forms, terminal information registration forms, terminal visualization manuals, sales aids), and personnel management systems (salary evaluation methods, promotion systems).

  2. Visit System The necessity of a visit system is obvious. Only by insisting on regular visits can sales representatives timely understand all aspects of the brand, thereby reducing business loss opportunities. A regular visit system is also a powerful measure to reflect the manufacturer's respect for customers and provide good service to customers. Regular visits not only help solve customer problems in time, but more importantly, can establish a positive cooperative relationship with customers, increasing customer satisfaction and trust in the company's services.

  • Establish a regular visit system Practice has proven that the higher the visit frequency, the greater the business volume and the better the cooperative relationship with stores. So what is an appropriate visit frequency? We say high-frequency visits do not mean visiting every day or several times a day. The key is to visit with a purpose; otherwise, valuable human resources are wasted.
  • An appropriate visit frequency should mean: maintaining full category distribution without out-of-stock situations; shelf space reaching or exceeding market share; being able to solve customer problems in a timely manner.
  • Determine a reasonable visit route and daily number of visits A reasonable visit route means being able to complete more visits in the shortest time, rather than spending more time on the way or waiting for store owners. Sales representatives need to understand their area size, traffic conditions, transportation conditions, distances between stores, etc., to ensure sales personnel spend more time on selling rather than wasting time on the way, waiting, or not seeing the store owner.
  • Clarify visit purposes and improve visit efficiency Only by visiting with a purpose each time can we gradually complete the established goals of terminal visualization and shelf space occupation, thereby achieving sales targets within a period. Therefore, sales representatives should be made aware that only purposeful visits can improve visit efficiency and success rate, truly promoting stable and rapid sales growth. An effective visit refers to direct communication with the store owner; making a phone call or reporting in does not count as an effective visit.
  • Regularly adjust visit steps/visit routes/daily number of visits. Adjusting and optimizing according to regional business development and store situation changes is very meaningful for continuously increasing defensive capabilities and quantity.

IV. Distribution Management The core of small store management lies in the follow-up, maintenance, and expansion of distribution.

  1. Basic Work Procedures Small store sales representatives follow the basic action procedures for small stores to carry out distribution follow-up. Small store sales representatives should have basic tools such as sales forms, visit manuals, promotional materials, and sales aids. Based on the number of stores in the visit area, daily visit store count, visit success rate, and visit frequency, determine weekly or monthly visit plans. Based on monthly or weekly visit plans, determine daily visit routes and carry out terminal visualization construction and maintenance. Through sales personnel filling in "Daily Visit Reports," "Inventory Replenishment Records," "Competitor Status," or "Promotion Tracking Forms," the manufacturer can more reasonably allocate and evaluate personnel based on this information, provide targeted training, and designate phased work priorities. Or formulate corresponding promotion plans to counter competitor activities.

  2. Supervision System The supervision system, as an extremely important part of small store distribution management, can not only follow up on sales personnel's distribution work and maintenance but also actively discover new distribution opportunities for sales personnel. Due to the heavy workload and sensitivity of supervision work, it is recommended that it be dispatched by an independent department (marketing department). At the same time, supervisors should establish the mindset that they are both supervisors and discoverers of distribution opportunities, so that inspection results are objective and fair, and inspectors can communicate well with sales personnel rather than confront them, which is conducive to achieving the best results in inspection work. As supervisors, they should also have an inspection plan to ensure no omissions within a month and to inspect all important areas at approximately the same frequency. Supervisors should promptly (preferably the next day) forward the inspection results to the sales manager of that area through the marketing department, which is conducive to jointly recognizing the inspection results.

  3. Promotion Management In order to achieve key distribution of certain key products in target areas, or when launching new products, or to counter competitors, we often carry out promotional activities in small stores.

  4. Formulation of Promotion Plans For promotional activities uniformly planned by the marketing department, the goals of the promotional activities should be broken down to each store and each salesperson according to local specific conditions, forming a local promotion plan. For regional self-developed distribution promotions, local market conditions should be fully considered, and reasonable promotion purposes, goals, scope, time, and methods should be designed. Among them, making the promotion methods attractive to small store owners is particularly critical.

  5. Design of Promotion Methods There are generally two types of promotion methods: one targeting small stores, and the other targeting consumers. Common types of promotions designed for small stores include:

  • Purchase-with-gift promotion: Small store owners can receive certain gifts after purchasing the designated products and quantities at one time. Features: Ensures product distribution but is not flexible enough. Applicable: This type of promotion is often used for new product launches or key product distribution promotions.
  • Target promotion: The small store can receive gifts as long as the target product and inventory reach the promotion goal. Features: It is conducive to sales representatives proactively and flexibly formulating sales goals and sales presentations based on the specific situation of each store, thereby ensuring the comprehensive realization of the promotion design goals, but it requires high levels of promotion tracking and inspection and sales personnel quality. Applicable: Commonly seen in mature sales teams for overall distribution improvement promotions and countering competitors. Common types of promotions designed for consumers include:
  • Discount promotion: Consumers can receive a certain discount after purchasing the designated products and quantities at one time. Features: Obvious incentive to consumers, but the intensity is not easy to control. Applicable: This type of promotion is often used for new product launches or new market development.
  • Lottery promotion: Put promotion information in the packaging and publish promotion details through posters, usually as a themed promotion. Features: Simple and clear promotion information, but higher cost. Applicable: This type of promotion is often used for key product distribution promotions or full-category themed promotions.
  1. Promotion Training During training, making each salesperson clear about the promotion background and responsibilities, understanding the main benefits of the promotion to small store owners, and providing each sales representative with persuasive sales presentation materials (and memorizing them) plays a crucial role in the smooth implementation of the promotion. At the same time, let sales representatives understand that during the promotion, they should first make customers recognize that the promoted product itself can meet a certain need or demand of the customer, and then emphasize that the promotional gifts can bring additional profits and reduce operating risk costs. Otherwise, only emphasizing the benefits of gifts in the sales presentation will only make customers have a rebellious mentality of "the product is not good, so it is promoted."

Promotion Supervision Combining analysis of promotion tracking forms with on-site inspections, timely understanding of promotion progress and the distribution process of promotional items can not only timely discover various problems in the promotion and formulate corresponding solutions but also avoid problems in the management of promotional items by sales personnel.

  1. Small Store Image Management In small stores, in-store image management (terminal visualization) may not be as important as in standard supermarkets and hypermarkets, but because good in-store display in small stores is also conducive to consumer recognition, creating purchase impulses, helping small stores achieve retail sales quickly, and thus effectively maintaining the brand's distribution in the store, in-store image management in small stores is also an indispensable part of small store distribution management.

  2. Customer Penetration Sales representatives should fully understand the importance of customer penetration. Many experienced sales representatives often think they are familiar with store owners and simply believe that customer penetration is already good, and that store owners just want to increase sales/profit goals, etc. This must be changed in terms of mindset; otherwise, with market competition, deeper management will be difficult to carry out. Generally speaking, sales representatives pay more attention to the personal style of customers, but there are significant problems in obtaining business data such as monthly sales, profits, and inventory. One of the main reasons is that they do not use data to support their ideas. For example: In the case where some brands have high gross margins (above 35%) while their own products have lower gross margins (10%-30%), how to use our high inventory turnover data to prove that our investment return is still high, avoiding vague talk like "our products turn over quickly." In addition, what information and data should be understood to help small stores understand more deeply? The following points are for reference.

  • Small store monthly sales and profit indicators
  • Sales: Total sales of small store / own sales / main competitor sales
  • Profit and gross margin: Total profit of small store / own / main competitor / and gross margin (markup rate)
  • Inventory situation
  • Inventory turnover period
  • Inventory structure: Reasonableness of inventory for each major brand
  • Inventory area The above data can help us analyze: the status and role of the manufacturer's brand in small store performance, in distribution maintenance and reducing out-of-stock situations, competitor activities and their impact on the manufacturer. Through continuous accumulation and careful analysis, we can relatively easily obtain a lot of valuable information, thereby playing a positive role in completing our distribution coverage and in-store management.

Under the support of a complete small store operation management system, deep distribution can ensure that consumers know about and can buy products anytime and anywhere; and the distribution and coverage of the small store system can maintain long-term business, thereby becoming the foundation of the entire market and an effective barrier against competing products. When implementing this small store operation management system, efficient sales team management and distribution management are always the basic guarantee for deep distribution.

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