Based on past experience, as the year changes, sensitivity to product packaging dates increases. Distributors without operational experience may have shipped too much inventory at year-end or launched new products that haven't been on the market long. Once past New Year's Day, all your stock becomes last year's products, and after the Spring Festival, facing consumers who check dates on any purchase, they are essentially large-date products, making it difficult to sell smoothly at retail. The author suggests that distributor friends should consider how to compress inventory starting from December for 2015 products. Compressing inventory doesn't just mean warehouse stock, but also retail stock with older shelf life. Additionally, for new products just launched, shelf life is especially important in the market. This also tests the distributor's market control ability.
How to handle it?
1. Conduct inventory checks in December, including retail inventory counts. Before preparing to digest retail inventory in advance, you must have a clear picture. Before handling, conduct a simple inventory count of market stock. The purpose is to know the overall retail inventory, the general shelf life situation, and the inventory levels by region and shelf life. After the count, decide whether to recover and which date segments to recover. This way, you won't face issues like not being able to collect or being overwhelmed by returns.
The count can typically be completed in about a week. It is recommended that distributors not skip this step unless they personally visit the market.
2. Plan phased recovery. After the count, have the clerk calculate the target quantities for each region and salesperson. With prior statistics, recovery becomes targeted. Based on salesperson-reported inventory, recover products during regular route visits or concentrate over one or two days. Remember to recover by date and phase, according to your own digestion capacity.
3. Standardize storage and handling. a. Store by date and category: After recovery, the warehouse keeper should store products by date, mark them, and prioritize handling products with nearer expiration dates to avoid mixing. Near-expiry products should be stored separately from new-date inventory to prevent secondary market circulation and customer complaints.
b. Clean and mark: Products may have worn or dirty packaging after market display. The warehouse keeper should clean them upon recovery. Replace packaging if possible; if not, consider breaking bulk into smaller packages. For example, for noodles, near-expiry products can be opened and placed into large bags. For dairy protein drinks, replace with new box packaging from the manufacturer's delivery.
c. Mark before outbound: Before secondary outbound, mark the products. For bagged products, cut a corner or punch a hole; for bottled products, use an oil-based pen or ballpoint pen to mark inconspicuous spots to avoid unnecessary waste from re-recovery.
4. Choose disposal points and flexible methods. Choose disposal points: The preferred method for near-expiry products is to place them in closed or semi-closed channels such as unit canteens, prisons, buffets, bars/KTVs, breakfast stalls, rural markets, and other non-mainstream channels. If the volume is large and it's a fast-moving product (like yogurt), you can also handle it centrally in front of large supermarkets.
Flexible methods: Handle according to the degree of near-expiry, always aiming to minimize losses. You can bundle with promotional items, buy-one-get-one, sell at 1 yuan, or sell by weight. Regardless, once products leave the warehouse, try not to return them.
Avoid: distributing as benefits, altering dates, mixing old and new.
Summary:
1. At the operational level, the company should standardize large-date handling processes: a. Set uniform recovery standards with rewards and penalties to encourage timely recovery by sales staff. b. Establish standard handling procedures and responsible persons. Upon near-expiry product entry, the warehouse keeper should regularly warn the boss and sales manager, and set responsible persons. In principle, the one who recovers handles it, but products must return to the warehouse before outbound; never digest on-site without warehousing. c. Involve manufacturer personnel in handling and register details to later claim processing resources and costs. Generally, manufacturers, especially for candy, ham, milk, and bakery items, reserve about 5‰ of near-expiry handling costs, usually held by regional managers. Remember, the squeaky wheel gets the grease.
2. In market operations, distributors should recognize:
Reduce or control shipments in December. Experienced distributors basically stop or reduce shipments in December for products without daily turnover. Many manufacturers turn a blind eye, but some require distributors to stock up to achieve year-end rebates. In such cases, distributors must calculate carefully: what is the winter digestion capacity? Don't stock a warehouse full for a small rebate, as these are year-crossing products. Once the year changes, they become hard to sell, and you might lose more than you gain, with rebates not covering near-expiry handling costs.
New products past half their shelf life should be handled early. Products with a one-year shelf life are usually shipped in May or June, and by year-end, their shelf life is no longer fresh. Especially for new beverage products, if they cross the year, they may expire before the northern peak season next year. This means if you don't recover and handle them now, hoping to sell more on shelves is futile. Recently, I encountered many small-category products like five-grain, corn, mango, hawthorn flavors from a coconut juice brand, with dates from April or May, already near expiry. Such products, when the main brand isn't strong and many small SKUs are launched, inevitably face near-expiry or expiration. These small-category products should be recalled and handled once past half their shelf life. Returning near expiry to the warehouse easily leads to expiration.
Handle products quickly and don't fear losses. Once products are in the warehouse, each day makes them harder to handle. Distributors shouldn't hesitate to sell at half price due to心疼. Many new products can't sell well even at half price, let alone near-expiry items. So, be decisive and quick; don't let them linger in the warehouse. Although you lose a little, it's better than losing everything.
3. In market and team management, distributors should: Bosses should frequently visit the market, ensure warehouse FIFO (first-in, first-out), select points for distribution based on actual market conditions, avoid random distribution, cultivate the habit of checking inventory before delivering goods, deliver according to demand, train staff in basic store display skills, adjust salesperson assessments by season, and each sales manager should have several strong relationships with high-volume stores to help handle products in critical times.
Milk, ham sausages, and instant noodles are relatively easier to handle, but beverages are a headache, especially walnut milk, coconut juice, lactic acid bacteria drinks, and some so-called small-category beverages. The harder they are to handle, the earlier distributors should handle them. Ultimately, distributors must be cautious in product selection, diligent in distribution, frequent in market visits, and provide good terminal service to minimize returns.
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