Developing tobacco, alcohol, grocery stores and small department stores in urban residential communities as dairy sales terminals has been adopted by many dairy companies. The reasons for using this sales channel for dairy products are mainly based on the following four major reasons:

  1. Due to the accelerating pace of life, convenience-oriented consumption has become a primary choice for daily consumption. The numerous community sales terminals can precisely meet this consumer habit.
  2. It is determined by the current state of commodity circulation in China. Analyzing the total retail sales of consumer goods in recent years, it is found that modern retail channels, represented by hypermarkets and chain supermarkets, account for only 2% of total social consumer goods retail sales annually, with a slightly higher proportion in cities, still less than 20%. In other words, in cities, more than 80% of sales are still achieved through traditional retail channels.
  3. It is determined by the special characteristics of the dairy industry. In urban dairy consumption, short-shelf-life pasteurized milk dominates. Its short shelf life, high inventory risk, and sales risk make it difficult to sell through conventional retail channels.
  4. It is determined by enterprise strength. Some urban dairy companies build their own dairy specialty stores to establish sales channels. These channels are closed, effectively blocking external competitors once established, and offer high stability. However, they are often constrained by limited enterprise resources, unable to expand extensively, resulting in small channel scale and low market coverage, leaving opportunities for competitors. Therefore, leveraging the existing sales terminals distributed in residential communities, such as tobacco, alcohol, grocery stores, and small department stores, will greatly improve the enterprise's sales network and lay a solid channel foundation for sales. This type of sales channel has advantages that other channels cannot match: Good cash flow: Since products are basically settled in cash, there is no risk of accounts receivable. This not only reduces financial risk but also ensures smooth and efficient capital flow. Convenient channel expansion: Developing community terminals like tobacco, alcohol, grocery stores, and small department stores as dairy sales channels involves no complex procedures or formalities. Development is fast, entry barriers are low, and it avoids the cumbersome procedures and high costs of entering supermarket systems. Favorable for brand communication and cultivating consumer loyalty: Due to the large number of terminals in the channel, there is broad consumer contact and high exposure for communication information, which is very beneficial for brand communication. Moreover, the spatial proximity and personal relationships between terminals and consumers facilitate word-of-mouth promotion, which is highly effective and can easily cultivate consumer loyalty. Quick response to market changes: The short-shelf-life product characteristics determine a flat channel structure, which shortens information transmission time and preserves the authenticity and accuracy of information content. Therefore, enterprises can capture market and consumer demand changes at the first moment and adjust marketing strategies promptly. The developed community sales channels, although individual terminals are small in scale, weak in influence, and generate less sales, due to the large number of terminals, overall, they easily form cluster scale advantages, so this channel contributes significantly to overall sales. For example, a city-based dairy company in the southwest, relying on nearly 2,000 community retail terminals developed in the main urban area, achieves monthly sales of over 2,500 tons of dairy products, accounting for more than half of the company's monthly sales. Therefore, as long as the advantages of community terminals are leveraged, big articles can be made in these small terminals. To fully leverage the role of numerous community terminals, a lot of detailed work must be done in terminal construction, management, service, and daily maintenance. Based on the author's experience serving several dairy companies, establishing direct-operated community sales channels requires especially the following important tasks. Establish a dedicated team for community terminal development and management Developing community sales channels represented by tobacco, alcohol, grocery stores, and small department stores has some inherent disadvantages that are difficult to overcome. These channels have poor store image and single service function, unable to meet consumers' increasing shopping demands. Moreover, these channels are highly unstable; the merchant nature of store owners determines their strong profit-seeking tendency: they sell whoever offers more benefits. In such sales channels, individual terminals vary greatly, with uneven management levels and personnel quality, making conventional management models often ineffective in daily management. Given the various shortcomings of community terminals mentioned above, to fully leverage the sales role of community channels, it is necessary to establish a dedicated terminal support and management team, exclusively responsible for daily maintenance, service assurance, and management support of community sales channels. In specific operations, to improve management efficiency and ensure service quality, the entire market should be divided into several areas, with each area fully managed by a designated salesperson. Development of community sales terminals Finding community terminals with location advantages and good business conditions will quickly open up the dairy sales situation. When developing community terminals, geographical location is a key factor. With the continuous development of urbanization in China, the division of urban functional areas has become increasingly clear. Candidate areas should be divided into different functional zones based on their urban functions, such as residential, commercial, school, factory, tourism, and leisure areas. Community terminals rely on residential communities to serve residents, so large residential areas and school districts are the preferred areas for establishing sales terminals. Considering promotional needs, commercial areas with high foot traffic are also a good choice. After determining the target area for community terminals, when selecting specific locations, good choices include inside residential communities, at community gates, at community street corners, school gates, commercial streets, and major traffic intersections. Also, observe the convenience of access; consumers buy dairy products at community terminals mainly for convenience. If the chosen terminal has poor accessibility, even with a large surrounding population, it will not achieve good results. Additionally, when selecting locations, foresight should be exercised. For example, if an area currently has a small population but is known from urban planning departments to develop into a residential area in the future, it is advisable to enter early to secure effective store resources, laying the foundation for future community channel construction in that area, and the cost of early entry is relatively low. Besides selecting the location of community terminals, the business conditions and commercial quality of the operators of the proposed terminals should also be observed and evaluated. Based on the author's experience, terminals with too good business are not actually a good choice because if the store is too busy, the merchant has no time to attend to the sales of a particular category. Milk, as a relatively special product, requires someone to invest a certain amount of effort to achieve good sales results. Developing community sales terminals requires high terminal penetration for the product; only by establishing an intensive distribution network can the scale effect of community retail be reflected, which requires a large number of sales terminals. In practice, the number of retail terminals can be determined by dividing commercial areas or specifying population size. For example, a commercial area can be defined by a walking distance of 3-5 minutes as the radius, with one terminal selected in such an area; or one sales terminal can be established for every 1,500 to 2,000 people. Formulate reasonable product mix and pricing strategies The advantageous products of urban dairy companies are short-shelf-life pasteurized milk. Even if they develop and produce room-temperature milk products, it is only to fill gaps and defend against the invasion of external room-temperature milk products. Therefore, community terminals, as the key sales channel for urban dairy companies, should focus on pasteurized milk. At the same time, these terminals mainly face family consumption, so the selection of product items in the channel should also have a certain tendency, that is, inclined towards family consumption. Additionally, with the accelerating pace of life, the immediate consumption market is developing rapidly. Developing small-packaged, nutritious, and good-tasting products for the immediate consumption market to supply community retail channels will achieve good results. Currently, most enterprises follow a low-quality, low-price approach in the community retail market. As the market environment changes, the future market will require a large number of high-cost-performance products. Dairy companies must recognize and grasp this trend and adjust product items early. Regarding pricing strategies, the retail price, dealer price, ex-factory price, and rebates and other channel incentive systems should be established based on the company's market objectives (share leadership or profit leadership) and the competitive situation. Build terminal cold chain systems Pasteurized milk requires storage under refrigeration, which requires terminals to have cold chain systems. The completeness of cold chain facilities in community terminals directly affects the flow and sales of products in the channel. There are two methods for building community cold chain systems: first, utilize and integrate existing cold chain facilities in terminals, such as freezers owned by store owners or refrigeration equipment provided by other manufacturers; second, enterprise self-construction, where the enterprise purchases equipment and rents, sells, or provides it free to terminals. Using this method to build cold chain systems is fast, covers a wide area, and the uniformly purchased equipment has a better image, but it requires significant capital investment from the enterprise. Terminal visualization As mentioned earlier, these community channels have poor store images and cannot meet consumers' shopping needs. Since urban dairy companies regard the community network as an important channel for dairy sales, they should continuously upgrade the channel's level to give it strong vitality. This can be done by making store signs, counters, etc., to unify the terminal's store image; making clear requirements for the placement of refrigerators, the direction of refrigerator doors, the number and position of promotional posters, and strict requirements for product display; and striving for uniformity in the visualization construction of all terminals to enhance the terminal image and create a strong visual impact. Training for community terminals In warfare, it is said, "Troops and horses must be fed before the battle." Dairy sales differ from other product sales, requiring more dairy knowledge and sales skills. Therefore, for dairy sales, "training should precede sales." However, there are many community terminals, and the quality of sales personnel varies. Centralized training is simply not feasible and would not be effective. Enterprises can produce operation manuals for dairy products, including basic dairy knowledge, storage methods, sales skills, word-of-mouth promotion methods, and answers to difficult questions in sales, and distribute them to community terminals, requiring terminal operators to learn dairy operation methods, with explanations by terminal maintenance personnel. When new products are launched or new promotional activities are held, operation guides or service bulletins for the new products or promotions should also be compiled to help community terminals quickly understand the new products or promotions, thereby ensuring smooth business operations. Training for sales terminals should be conducted long-term, repeatedly instilling knowledge into terminal operators. Motivate sales terminals The ultimate goal of community terminal operations is to obtain profits. To fully leverage the operational enthusiasm of terminals, terminal interests must be valued. A basic premise for cooperation between enterprises and retail terminals is the reasonable distribution of profits between both parties. Only by meeting the interest needs of terminals can the channel be smooth. Providing reasonable profit margins to terminals is the most direct and effective channel promotion method. In addition, to strengthen terminal management and increase the enthusiasm of terminals for dairy products in the early stage of community terminal development, certain rewards should be considered for better terminals in terms of purchasing and product display. To better mobilize the sales enthusiasm of terminals, during daily sales, the method of issuing sales rebates to terminals can also be used to stimulate sales growth. The rebates issued are not extra from the enterprise's profits but are the batch distribution of the terminal's due profits. This method not only mobilizes the sales enthusiasm of terminals but also uses the economic lever of rebates to adjust and regulate terminal business behavior. Retail terminals not only pursue economic benefits but also desire attention and respect from the enterprise, that is, psychological value benefits. This is because community terminals often consider themselves in a weak position compared to the enterprise, so they have strong defensive psychology. If the enterprise can make sales terminals feel valued and respected, it will also stimulate their sales enthusiasm. Economic benefits are the foundation of psychological value benefits, and psychological value benefits enhance and strengthen economic benefits. To satisfy the psychological value benefits of terminals, the enterprise should regard terminals as partners, improve their dairy operation capabilities through training, on-site guidance, information provision, and quality services, making terminals feel equal to the enterprise, thereby achieving psychological value satisfaction. Through terminal promotion, the goal is to transform terminal operators into all-weather promoters for the enterprise, which is greatly beneficial for rapidly increasing sales and brand communication. Establish inventory and ordering management systems Short-shelf-life dairy products have very short shelf life, with high inventory and sales risks. If the order quantity is too large and not sold within the shelf life, it will cause losses to the terminal and dampen the terminal's enthusiasm for operation; if the order quantity is too small, it loses sales and profits and misses market opportunities. Therefore, the planning of inventory and ordering must be quite strong. For sales terminals that have just started operating dairy products, terminal salespeople should help operators master sales patterns and strictly control inventory and ordering quantities. These sales terminals are scattered throughout the city, with fragmented layouts, and most are located in residential areas with complex traffic conditions, which brings great difficulties to logistics distribution and higher logistics costs. Usually, enterprise distribution cannot cover all terminals every day. This requires sales terminals to always know their daily sales inventory and forecast the next day's sales. Strive to achieve zero inventory sales while meeting market demand. Conduct daily visits and maintain customer relationships with sales terminals The management of community terminals is mainly carried out through daily visits. Salespeople should make careful arrangements for their visit work. First, formulate a visit plan, determine the visit area and route, and prepare necessary materials such as promotional materials. When visiting terminals, understand and record the terminal's sales situation in detail; also verify whether the terminal has implemented the enterprise's sales policies and promotional activities without compromise; check the terminal's inventory and product shelf life; check the terminal's product display and visualization construction, and adjust in time; collect market information and competitor sales dynamics. A common mistake many salespeople make is frequently visiting community terminals with large sales or good relationships, while visiting less frequently those with low sales but potential, or those with high sales but poor relationships. This practice should absolutely be avoided. Salespeople should analyze the implementation of their community terminal visit plans. First, whether the visit plan was seriously implemented. For example, if the plan is to visit several community terminals per day, compare with actual conditions. If the monthly plan completion rate is not high, the salesperson should analyze the reasons. Second, salespeople should make constructive visits, meaning each visit should help the community terminal's operation and management. Community terminals welcome salesperson visits and do not consider them a nuisance; only then is it a successful visit. Good emotional relationships between salespeople and community terminals will promote sales work. Maintaining good relationships with community terminals is an important part of daily work. Salespeople should regularly review their relationships with customers and try to deepen emotional connections. Good customer relationships make terminal operators feel valued and respected by the enterprise, which leads to enthusiasm for selling the enterprise's products. Establishing good customer relationships means making friends with terminal operators, but not being friends. Conduct opinion exchange and information transmission Salespeople should frequently exchange opinions with community terminals. Salespeople might reflect: do they often exchange opinions with key community terminals? If not, they should consider how to improve the way of exchanging opinions with community terminals. Information transmission, in simple terms, is the downward and upward transmission of information. Salespeople should convey the enterprise's sales policies and promotional plans to community terminals. Then, salespeople feed back the problems exposed in daily terminal sales and new market changes to the enterprise. Community sales terminals directly contact consumers. Through communication with consumers, they can learn consumers' views and attitudes towards the enterprise's products, services, and sales policies, understand new consumer demands for products and services, understand consumers' awareness of dairy products, and understand consumers' attitudes towards competitors. The important value of these valuable first-hand market information to the enterprise is self-evident. Therefore, opinion exchange and information transmission between salespeople and terminals are very important. When transmitting information, salespeople should grasp four principles: first, the information transmission channel should be smooth; second, the speed of information transmission should be fast; third, the content of information transmission should be accurate; fourth, information transmission should be constructive. The fourth is the most important. When salespeople convey enterprise information to terminals, they should not simply relay some rules and regulations to terminals, merely acting as the enterprise's "mouthpiece," but should combine the actual situation of each terminal and introduce and explain information such as enterprise conditions, sales policies, promotional activities, and product knowledge in plain language. When feeding back terminal information to the enterprise, they should not merely act as information collectors but should organize and analyze the information, extract valuable insights, and shorten the enterprise's response time to market information. Rectify market order During the construction, development, and operation of community terminals, some improper practices are inevitable, such as vicious competition disrupting the market, cross-regional selling, and unauthorized price reductions. Although these may increase sales in the short term, they harm the overall interests of the enterprise and are detrimental to the development of the entire sales channel. Therefore, making community terminals understand, comply with, and cooperate with enterprise policies is an important aspect of salesperson management of community terminals. For behaviors harmful to market sales, they should be discovered early and stopped early, solving problems in the bud to avoid worsening. Establish and improve terminal customer service and complaint systems Relying solely on terminal salespeople cannot completely solve various problems in community sales terminals. Some common problems in community terminal management can be solved with the help of the enterprise's customer service system, such as service hotlines, and also set up complaint hotlines to facilitate terminals reporting problems in product distribution, daily management by salespeople, etc. Understand the role of sales channels and properly resolve channel conflicts Dairy companies generally do not choose only a single sales channel for product sales but use multiple channels in parallel, such as supermarket channels, home delivery channels, and community terminal channels. The diversity of sales channels inevitably leads to conflicts between channels. First, correctly understand the role of different sales channels. The supermarket channel is a newly emerging sales channel in recent years. This new commodity circulation format has a wide variety of products, a good shopping environment, and features of low price and fast shopping, meeting consumers' "one-stop" shopping needs. Therefore, it has developed very rapidly and has become an important part of urban commodity circulation channels and the development direction of commodity circulation. This modern retail format attracts a large number of urban consumers with strong purchasing power and newer consumption concepts. These consumers lead urban consumption trends and play an opinion leader role among consumers, having a profound impact on the consumption behavior of other consumer groups. Therefore, this type of channel is a good place for dairy companies to establish corporate, product, and brand images. Enterprises should not ignore the operation of the supermarket system. They should use supermarket channels to comprehensively enhance the image of the enterprise, brand, and products, and the enhanced image can greatly promote the establishment and development of traditional community sales channels. These two sales channels have their own focuses and complement each other, forming an organic and unified interactive sales channel system. The home delivery channel is the earliest type of sales channel developed by urban dairy companies. Emphasizing service is a characteristic of this channel. This sales channel has great appeal to consumers who pursue enjoyment. Moreover, with the continuous development of China's aging population and the improvement of the living standards of the elderly, milk consumption capacity is increasing, and the vitality of the home delivery channel remains strong. It is a powerful supplement to other sales channels. The main manifestation of conflicts between different sales channels is: promotional activities targeted at one channel often trigger opposition from operators of other sales channels and may encounter resistance. Enterprises sometimes have to adjust their originally planned marketing strategies under channel pressure. If this situation continues, it is not the enterprise controlling the channels but the channels blackmailing the enterprise. To fundamentally resolve conflicts between channels, enterprises should proactively differentiate products, prices, and promotions based on the characteristics and roles of different channels, and combine market environment and competitive situation to assign different market missions to different sales channels. For example, the supermarket system focuses on image, launching high-end products with a high-quality, high-price strategy; community channels launch high-cost-performance products to increase volume and earn profits; and leverage the service advantages of the home delivery channel to effectively supplement the above two channels. The above are some important matters that should be addressed in the construction and daily management of community sales channels, most of which are details in sales management. In fact, sales management work is the concatenation of many small links. Solving detail problems makes seemingly complex sales management work much easier. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable 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 Operation | 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]