Click 'Read Original' for details. Preface For distributors, stocking shelves is not a problem—when pushed, they can offer credit, open cases, or include promotional policies. The real question is: what to do when products don't move in stores. The topic of sell-through involves a vast system; discussing details, tools, and methods could easily exceed 300,000 words without being comprehensive. This article aims to be concise, focusing on framework logic and condensed outlines rather than specific operational details. For FMCG and pan-FMCG industries (alcohol, home appliances, building materials, daily chemicals, etc.), the methods for terminal sell-through are numerous, but they all fall within the scope of this single article.

Theoretical Basis: Impulse Buying Would you plan at home to go to East Street, turn right, and buy a Coke at the supermarket next to KFC? Certainly not. You walk down the street, feel hot and thirsty, and buy one on the spot. Not only for FMCG, but also for pan-FMCG like home appliances, building materials, and phones, consumers have many terminals to choose from randomly. So, in the FMCG industry—where consumers buy is uncertain. Are there people who decide before entering a store to buy a can of JDB? Yes. But after entering, they might end up buying Wong Lo Kat. Why? Because JDB is out of stock, or they see a Wong Lo Kat display, or the store owner recommends it because of a promotion. So, in FMCG—which brand consumers buy is uncertain. Originally planning to buy one Coke, the store owner says there's a promotion: buy three get one free. You end up with four bottles. Is that possible? So, in FMCG—how much consumers buy is also uncertain. Since where, which brand, and how much are all uncertain, how should FMCG companies approach offline sales? (Note: this is about sales, not marketing. Product development, image design, and brand communication are beyond this article's scope, and most distributors and salespeople have no say in those areas.)

  1. Available: Consumers may buy anywhere, so increase distribution rate to ensure they can find it wherever they go.
  2. Visible: What brand consumers buy after entering depends on product display—so do excellent merchandising.
  3. Audible: What brand consumers buy also depends on in-store recommendations—so build good relationships to get store owners to push your product.
  4. Top-of-mind: With availability, visibility, and recommendations, plus advertising and promotions, consumers will ask for your brand by name. Why did Jianlibao decline a few years ago? Because it wasn't available, visible, or recommended, and finally not top-of-mind. Why does it seem to be back? Because its distribution rate, merchandising, and terminal visits have improved, and consumers gradually remember to drink Jianlibao. FMCG professionals, think about it: after a lifetime of work, amidst the vast complexities, isn't it just these four things?

"Available" Work Checklist

  1. Organizational Support Without visits, distribution and sell-through are moot. The mainstream approach is for manufacturers to have terminal visit teams directly visit some core markets and outlets. For more markets and terminals, they "push distributors to add people and vehicles" for visits. There will always be places beyond the distributor's channel and delivery capacity, so they also set up sub-distributor teams to visit uncovered terminals.
  2. Terminal Visit Team Management This area has a vast and complete knowledge system in FMCG deep distribution. Distributors have limited conditions and cannot achieve CRC card fine management, as discussed in previous articles. Management can be rough, but basic logic must hold: manage daily visit counts, manage minimum visit frequency for all terminals, and implement tiered checks—"you work in front, I watch from behind." Otherwise, the terminal team will only visit large, established stores, not small, new ones... Many people and vehicles, but many dead corners.
  3. Terminal Visit Team Assessment Employees always do what you assess, not what you hope. Process assessment is essential, measuring "number of customers" and "number of items." Business can grow because business = customers × items. Further, implement sharing mechanisms to design profit distribution, turning lazy employees into small business owners working for themselves, with vehicles covering their area to complete sales and maintain terminal performance. This reduces internal friction—the most diligent are those who haven't escaped poverty.
  4. Terminal Visit Profit and Loss Management 1) Visit Method Mix: Van sales: high volume but high cost; traffic regulations prohibit mixing people and goods; employees may manipulate payments or even sell their own goods... Pre-sell order taking: good for merchandising but not for new products or remote towns... Telephone sales: fastest and lowest cost, but roughest work... How should distributors balance these pros and cons in their regional markets, combining van sales, phone visits, satellite warehouses, and pre-sell orders to reduce delivery and visit costs? 2) Route Division Mix: In a city, N sales reps divide the area into zones, each taking orders. The next day, drivers deliver across the city—a full-day tour—raising delivery costs. Optimize visit and delivery routes to reduce costs. 3) In-Store Product Line Mix: How to use four levers—"personnel assessment," "tiered visit frequency," "product combination promotions," and "push new and expensive products"—to increase average items per store and average price? This boosts output and reduces delivery costs. 4) Terminal Item and Customer Monitoring: FMCG companies will eventually become "internet companies," updating terminal data in real time for assessment and decision-making. Currently, FMCG B2B crushes traditional distributors in this area, which is the biggest threat B2B poses to them. Large brand companies now conduct monthly censuses to monitor distribution rates. Some SMEs only monitor "core store" distribution data, which is still progress. Distributors should at least monitor "active customers this month," "dying customers," and "dead customers"...

"Visible" Work Checklist 01. Merchandising Training

  • Instill the concept of hands-on work: displays are fought for, not bought...
  • Establish sales-oriented merchandising standards: displays are not for beauty but for sales... These seem simple but are far from widespread. Salespeople still ask for display fees from owners... In BC supermarkets, you often see promotional bundles that sell well on shelves, while slow-moving regular products sit on end caps, wasting resources.
  1. Merchandising Assessment: Don't replace management with training... Everyone knows merchandising is important, but is it assessed? Without assessment, it won't be done well. Three mainstream methods:
  • First: Merchandising reward/punishment projects—employees take photos daily, supervisors check and reward/punish the same day.
  • Second: Direct supervisors check a certain number of sample points per rep monthly, score merchandising per rules, and assess merchandising bonuses at month-end.
  • Third: Use mobile systems—employees photograph daily, back-office staff calculate scores, and month-end assessment is based on scores. All three have difficulties: "fake photos," "insufficient sample points causing score fluctuations," "employee complaints that their display was always good but the poster was torn on the check day..." These require a management system to correct.
  1. Display Profit and Loss Management: All marketing theories are empty without money. Display costs rise yearly, exceeding income. How to break through?
  • Avoid junk stores; KA investment should be moderate. BC supermarkets, wet markets, farm shops, community stores... have low display fees and high output, previously ignored by many FMCG companies; they are the blue ocean for display fees.
  • Data analysis: store capacity minus your sales equals incremental space. Invest display fees in terminals with high incremental space; only then can you push volume... There's a method.
  • Agreement optimization: Simple display reward agreements are being phased out because they're weak (in BC supermarkets, ten cases displayed for two free is generous, but such incentives don't constrain terminals).
  • Agreement mix: Combine display with initial order quantity, item mix, cumulative sales... Combined display agreements boost sales and increase bargaining power with terminals.
  1. Display Data Monitoring Many companies' audit departments only check expenses, which is insufficient. Corporate audits should regularly check merchandising, score per rules, and build merchandising score files for each region. These files are hard to use for assessment (since regions are vast, monthly sampling is impossible), but they can serve as weights for promotion scores... Core store merchandising data monitoring should be audited and uploaded monthly, as these are sales high points... For distributors, owners and operators should audit merchandising daily, scoring and filing for reps... The principle is the same. All the above are unavoidable hurdles in FMCG; you can't skip the work. It's tedious and complex, yet a methodology. You can't achieve it all at once; only gradual accumulation and improvement—each small step forward is a new height. Only when all are done can you achieve "visible."

"Audible" Work Checklist Terminal "audible" refers to recommendations from four types of people. First, store owner recommendations. Why do owners push your product? It's not just about high profit:

  • First, terminal complaint handling. Most terminals drop your items due to complaints (e.g., untimely delivery, price undercutting, expired products, no returns for damage...). You must implement a complete complaint handling process, treat complaints as a fire-line indicator, and reward/punish accordingly. Only then can you ensure owners "don't hate you" or "hate you less."
  • Product mix and price management to protect channel profits: including pushing new high-end products, cracking down on cross-region sales, managing terminal price undercutting, clear price tags, and separating products by channel to avoid price wars... A pile of chores.
  • Terminal inventory management: Especially during peak seasons, you must push inventory to terminals; only with large inventory will they push your product. In the short ten-plus days before peak season, all salespeople and distributor reps collectively push inventory—this is an organizational management topic with many processes and control points.
  • Terminal agreement progression: Sign cumulative sales agreements, exclusivity agreements, and franchise agreements... all tied to sales targets, transferring pressure to terminals. This creates difficulties: cumulative sales agreements are prone to fraud, exclusivity and franchise agreements are costly, and terminals may not honor them... The industry has answers, but execution is tough. First, terminals don't hate you, feel your service is good, and have few complaints. Then, looking forward, they see profit; looking back, they feel inventory pressure; in the drawer, there are agreements with targets... Ideally, you also have big products they can't do without. Achieve all this, and store owners will push your product. Second, staff promotions: like waiter bottle-opening fee management in restaurants, or plumber membership management in building materials... There are mature methods. Third, shopping guides: recruitment, training, management, assessment... The home appliance industry has a vast knowledge system here. Fourth, after-sales service for consumers in building materials, building word-of-mouth... Only when all these are done can you achieve terminal "audible."

"Top-of-mind" Work Checklist Top-of-mind means consumers are willing to ask for your brand by name. Brand, positioning, advertising, and communication are superstructure; distributors and sales teams have no say. They mainly focus on promotions, which fall into six categories:

  1. Customer acquisition promotions: e.g., white liquor industry sending samples to opinion leaders, lubricant companies giving discount coupons to truck drivers, three empty Arowana bottles exchanged for one barrel of Xiwang corn oil, scanning QR codes to install Pinduoduo for a 5 yuan red packet, China Merchants Bank's "other bank VIP is my VIP"... all are about grabbing customers...
  2. Price promotions: various specials, member prices, shocking prices, second item half price, extra quantity at same price, upsell with purchase...
  3. Chance promotions: various draws, prizes, under-cap prizes...
  4. Gift promotions: various buy-one-get-one, bundle promotions...
  5. Product promotions: various sampling, tasting, experience, demonstration...
  6. Repeat customer promotions: second-purchase discount coupons, member points prizes, instant noodle empty bag exchange, home appliance trade-ins... Don't expect promotions to be innovative. If there were magical solutions, international companies would have done them, and others would quickly imitate. The quality of promotions lies in flawless design details and thorough execution.

Source: Wei Qing Training (ID: weiqingpeixun) October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference." We will invite industry experts, FMCG warehousing and distribution specialists, and distributors who have transformed into unified warehousing and distribution platforms to discuss and answer questions on future trends in FMCG city distribution logistics and practical cases of distributor transformation, under the theme "New Distribution, New City Distribution." We hope to bring you fresh insights and inspiration! -END-