Sorry, Business Is Tough This Year, No New Brands!

“Sorry, business is tough this year, no new brands!”

For distributors, it's acceptable to slow down or stop taking on new brands. But have they carefully reviewed their existing brands?

The deeper reason behind “Sorry, business is tough this year, no new brands!” is that under the new economic normal, facing rapid changes in the economic and market environment, distributors have not quickly adapted to changes in channels and terminals, nor have they adjusted internal management to cope with fierce competition, leaving them in a passive position and seeing their business shrink.

You said you'd review carefully, so here are a few combs to start with.

First comb: Classify and manage existing brands by gross margin. Assess by brand and track by item.

Second comb: Establish a team management mechanism that rewards the best and eliminates the worst. Use cumulative sales achievement and net profit contribution rate as benchmarks. Assess teams and individuals quarterly; the bottom 5% who are deemed incompetent after comprehensive evaluation will be eliminated.

Third comb: Achieve effective distribution by segmenting channels and customizing distribution plans based on channel characteristics. No more one-size-fits-all promotions!

Fourth comb: Carefully consider and select products that align with consumption upgrades and mainstream shifts, focus on them, and scale them up.

Zombie products (no volume, no profit, no appeal) – sorry, cut them off, goodbye!

2016 is about to pass, and 2017 is about to begin. For many FMCG distributors, at year-end, it's time to calculate which brand items made money and which lost money. Sign or renew? In 2017, do subtraction on items, then focus on some. Through careful review, at least you can survive the industry's winter. Previously, the saying was “the survivor wins,” but after winter passes, “the one who lives on wins!”

Salute to distributors who will still be busy in 2017. Being busy at least shows they are relatively fortunate. Also remind manufacturers to have more “craftsman spirit” and develop more products that meet consumption upgrades and mainstream shifts.

2017, the one who lives on wins!