---
title: "Terminals Hard to Enter and Defend? Step-by-Step Guide to Defeating Competitors!"
description: "Many companies sign agreements with terminals, such as volume commitment, display, exclusive (price band or full-store), and promotion agreements, using key terminal personnel to control competitor product flow. These agreements are often gray-area and legally questionable, but they are common and effective in FMCG. This article breaks down offensive and defensive tactics for exclusive terminals, including how to respond when competitors buy stores, how to break into competitor exclusives, and how to control and expel competitors from your exclusive stores."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-08-10"
language: "en"
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# Terminals Hard to Enter and Defend? Step-by-Step Guide to Defeating Competitors!

> Many companies sign agreements with terminals, such as volume commitment, display, exclusive (price band or full-store), and promotion agreements, using key terminal personnel to control competitor product flow. These agreements are often gray-area and legally questionable, but they are common and effective in FMCG. This article breaks down offensive and defensive tactics for exclusive terminals, including how to respond when competitors buy stores, how to break into competitor exclusives, and how to control and expel competitors from your exclusive stores.

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Many companies have agreements with terminals, such as volume commitment agreements, display agreements, exclusive agreements (price band exclusivity, full-store exclusivity, etc.), and promotion agreements. Through these agreements, they leverage key terminal personnel to control the flow of competing products at the terminal. Most of these agreements are gray-area; after signing, they dare not give them to the terminal, and some even use aliases for key terms, meaning they are not legally valid! However, whether in the product industry or other FMCG industries, terminal agreements are repeatedly effective and commonplace.

**Terminal exclusivity generally means that a terminal sells a specific brand exclusively within a certain price band or across all price bands, divided into natural exclusivity and contractual exclusivity.** The purpose of signing exclusivity is to exclude competitors through the agreement, achieving maximum sales for our product while preventing competitors from entering. The offensive and defensive actions for contractual exclusivity are basically the same as those for other agreement terminals (e.g., volume commitment stores, display stores). Therefore, today we will break down the offensive and defensive actions for terminal exclusivity and apply them broadly!

**What to do when competitors buy stores?**

So-called competitor store-buying means competitors adopt personalized terminal agreements in certain terminals, using a one-store-one-policy approach. **There are two purposes: 1. To place their product. 2. To achieve exclusive sales.** Encountering a competitor buying a store is a headache: yesterday you were selling well, today you go to the store and your product is gone, either hidden or replaced.

**Response actions: Beforehand**

**1. Reconnaissance:** Find out whether it is the competitor's manufacturer or distributor buying the store. Are they buying only this one store or all stores? If they are buying all stores, report immediately to headquarters; if only one store, the local office should handle it. Find out how much the competitor is paying for the store, what the volume commitment is, and whether there are display clauses. How is our contract execution? If the contracted sales volume has not been met, request the restaurant to extend the time, must complete the contracted sales, buy time, and then find a solution.

**2. Calculation:** Calculate our current input-output situation. **Our gross profit during the store-buying period = (supply price - factory price) × total sales - promotion costs (promotion management fees, promotion staff costs) - other promotional fees, sponsorship fees.** See if it is greater than the current store-buying fee. Estimate the sales return from future investments such as adding new mid-to-high-end products, increasing on-site promotion staff, and other consumer promotions. Will future gross profit be greater than the increased store-buying fee?

**3. Evaluation:** Is this store a cash cow? Does it have significant strategic influence on other stores? Set the maximum loss you can bear, and also consider potential negative impacts, such as raising the store-buying fee for our products in other stores.

**4. Launch a regular customer reward plan in advance:** That is, when consumers purchase our product from the store's promoter and reach a certain tier, they can receive additional rewards (gifts, lottery, etc.). Restaurants fear consumer dissatisfaction and them not coming to eat.

**During: Negotiate with the boss**

**1. Restaurant negotiation - Besiege Wei to Rescue Zhao**
First, pretend not to know, and paint a bright future for the store owner, remembering to bring detailed promotional plans, product mix structure, and profit forecasts. The goal is to create an illusion for the store owner that continuing cooperation will bring greater benefits.
Find key people to speak well of you, using interest alignment. These key people might be the bar, purchasing, lobby, etc.
Indirect public relations, such as fire brigade, traffic police, public security...
Organize activities in surrounding restaurants and small stores to stimulate him.

**2. Restaurant negotiation - Play to his interests**
Emphasize commercial reputation: we have an agreement, and since sales have not been completed, we need to extend the contract time.
Review performance: sales during cooperation, profits, various expenses invested, indicating we have suffered a loss, and plead poverty.
How many people in the restaurant drink our product, how much per table in dishes, i.e., tell the boss how many customers our product brings and the average customer spend per table.
Tell the store owner not to smash his own rice bowl by selling products (consumers already like our product and will be dissatisfied if they can't get it).
Don't forget our regular customer reward plan. Tell the store owner not to offend consumers.

**3. Masterstroke + dirty trick**
Suddenly raise prices, deliberately increase the store-buying fee, then retreat, digging a pit for the competitor.
Digging a pit + planting a mine = knowing the store's output and sales well, causing the competitor to fall into a loss quagmire.

**Afterwards: Remove the firewood from under the cauldron**
Use hidden promotions in the store, bribe key personnel to secretly sell. Win over waitstaff to sell our product.
Organize people to go to the store and specifically order our product.
Organize activities in surrounding restaurants.
Place products and displays in nearby retail stores to stimulate bringing your own product.
Create customer complaints about competitor products.
Distribute flyers in the parking lot; consumers order our product, and we deliver it to the store.
Give away drinks at the entrance; you spend money to buy the store, I spend money to buy consumers.

**Keywords: An exclusive contract is just a piece of paper! The more exclusive the competitor's store, the more you must visit to enhance relationships; don't be swept away by an opponent's agreement! You have your door-closing plan, I have my wall-jumping method!**

**Attack as defense - How to break into competitor exclusives?**

If you sign an exclusive but don't visit, it won't be exclusive; in business, whoever visits more frequently has higher distribution rates. If the exclusive store has a poor product mix and poor input-output, they can't renew, and they break the exclusive themselves.

**Win over the store**

**Hard fight:** Visit frequently, then say, "Last year you made X amount from a certain product; this year I'll make you more than last year. If not, I'll make up the difference."
**Give away some products for free** - you can't refuse. For example, give a bottle to display and put a poster next to it; after getting familiar and building relationships, find opportunities to penetrate.
Use products they don't have to talk to the boss: "You're missing a product at this price point; my product just fills that gap." You can tell the owner that since they've already paid the exclusivity fee, selling your product is extra profit. You can first penetrate with other products from the distributor, such as red products or beer, then gradually dismantle the competitor's exclusivity through relationship building.

**Competitor's chain store exclusivity:** Use high prices to take one of their stores, then the other stores will cause trouble for the competitor, forcing them to pay more, raising the exclusivity fee, or even giving up voluntarily.
Don't buy the entire exclusivity, only the exclusivity for the main selling price band.
You buy exclusive sales, I buy exclusive display, using display to attract consumers to order by name.

**Win over the periphery**
Do well in supermarkets and convenience stores around the restaurant. Post posters, distribute products, and do displays in the business circle around the restaurant, even doing on-site promotions to remind consumers to bring their own product.
Distribute flyers to consumers outside the store (telling them, "If you want to drink a certain product, call me and I'll deliver it to you") to entice consumers to bring their own product.

**Win over consumers**
Guide trends: get government units, banks, tax people to order our product in restaurants...
Hire people to pretend to be consumers, frequently order our product by name in restaurants, otherwise they won't eat, etc.

**Control and expel: What to do when exclusive stores secretly sell competitor products?**

**Professional visits**

**1. Achieve visit frequency: assign people, areas, schedules, and routes to visit all managed restaurants;**
**2. In-store work follows standard restaurant visit steps;**
**3. Let everyone inside the restaurant know we have signed an exclusive contract and only our product is allowed to be sold;**
**4. Assign assistant promoters for on-site promotion, while monitoring/supervising the restaurant's exclusive execution; if competitor products are found, immediately notify the area salesperson;**
**5. Salespeople should visit promptly, lead by example, and immediately remove and return competitor products so they are absolutely invisible;**
**6. After learning the specific reasons and quantities of competitor sales from the warehouse manager or lobby manager, immediately communicate and coordinate with the store owner. Although it may not be completely stopped, each discovery must be stopped; otherwise, the restaurant will blatantly put them on the shelves next time;**
**7. When supervisors find an exclusive restaurant not complying, they should immediately order the salesperson to the scene, impose on-the-spot penalties, and issue penalty notices to gain the store owner's understanding and sympathy.**

**Contract pressure and negotiation with the store owner**

**Contract constraints:**
Signing the agreement is only one aspect; the most important is to fully communicate with the owner beforehand so they truly understand and accept our product.
When signing the exclusive contract, stipulate the distributor's liability for breach and supervise seriously.
Retain 10% of the exclusivity fee as a deposit at the first and middle payments, and pay it in full when the contract expires.
Reduce the initial exclusivity fee and the amount owed to avoid the store owner using debt and exclusivity fees to control the company.
When non-exclusivity is found, use the contract as a lever, apply reasonable pressure on the restaurant owner according to the contract terms, and use the face-saving psychology of most restaurant owners to prevent further increase in competitor sales.

**Fee constraints:**
When a restaurant repeatedly sells competitor products despite persuasion, consider deducting part of the exclusivity fee, and cleverly inform other restaurants of this case;
Depending on the restaurant's business, deduct the exclusivity fee if necessary, or even stop cooperation, to make an example of one.
Persist in negotiation, negotiate every time you see them, annoy them with tenacity, and ultimately force them to agree not to sell competitor products.
Do the math for the restaurant owner (analyze from product price, capacity, sales, gross profit, exclusive discounts, manufacturer-distributor relations, etc.), so the owner understands the overall gains and losses; when they find selling competitor products is not worth it, they will control it themselves.

**Keywords: 80% of the solution to non-exclusive exclusive stores lies in pre-work: do the basic business work well so the store can't find fault.**

When the proportion of agreement stores in a market is low, maintenance management is not a big problem; when the proportion exceeds 50%, management difficulty increases significantly, including predicting in-store sales, allocating expenses, negotiating with stores, and responding to competitor penetration and impact.

The offensive and defensive tactics for exclusive stores may seem like action breakdowns, but they are actually the basic course for terminal agreement store layout. Buying stores may seem dirty, vulgar, and violent, but in practice, it is often an unavoidable issue. Many companies succeed because of store-buying, and some fail because of it!

For example, often it is difficult to impress the store with just price; it requires composite investment of multiple products to cover in-store expenses. Often due to insufficient relationships or unfamiliarity with the business, single-store input-output is severely imbalanced, leading to customer complaints.

In the future, relying on a single channel or price band for profitability is unlikely. How to use multi-price band, composite channels, diversified, high-distribution terminal layout to profit and build a base market is a major lesson!

Author: Fang Gang
Source: Distributor's Home (ID: wwwjxszjcom)


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