Developing new markets and new customers is the top priority for our sales personnel. Based on my practical experience in the fast-moving consumer goods (FMCG) field, I have summarized some small tips, initially named the "7531" rule. Now I introduce them as follows for your reference:
First, the "7" refers to seizing the two time periods: "7 AM and 7 PM."
Around 7 AM, distributors are preparing their goods and getting ready to depart. Visiting the wholesale market at this time can effectively understand the actual situation of wholesale market merchants: (1) The distributor's product status: which product series they operate, whether there are competing products among them, and whether their product mix can share the same distribution channels as our products. (2) The distributor's vehicle situation: how many vehicles they have and the types of vehicles. (3) The distributor's personnel situation: how many helpers they have and the quality of their staff. (4) The distributor's operational status: how early they open, and how busy their staff are. (5) The distributor's contact information: this can be learned from their store signs, vehicle advertisements, delivery orders, etc. Register the information of potential cooperative distributors in the wholesale market for our next steps.
Around 7 PM, distributors are returning from deliveries. At this time, visit the wholesale market again, and if possible, visit some distributors' warehouses to further verify their actual situation. More importantly, take a tour around the county town to see if there are any missed distributors. This can be learned from the side, or by asking some retailers, and also by judging from where delivery vehicles are parked (nowadays there are many big customers with warehouses but no storefronts—don't miss them!). Record the information of unregistered distributors who might cooperate.
Second, the "5" refers to the five elements that a distributor should possess.
As a distributor, if they are interested in doing our products, or even have a strong desire, they often make bold promises to us that they will definitely sell our products well, or guarantee that they will focus on our products. Emphasizing the five elements of distributors is to prevent distributors from being "willing but unable" or "able but unwilling":
Have good network relationships and social connections. (1) Network relationships are reflected in the following: second-tier customers in townships; supermarkets, retail stores, closed venues (such as schools, large factories and mines, detention centers, etc.) in county towns; and terminal consumption places (restaurants, bars, internet cafes, etc.). (2) Emphasizing social connections has two purposes: first, extensive social connections can drive group purchase demand; second, extensive social connections can reduce interference from functional departments and protect the manufacturer.
Have sufficient working capital. When introducing new products, it is unlikely to have no credit sales at all; products cannot be delivered a second time when inventory reaches zero; moreover, products have off-seasons and peak seasons. Insufficient working capital will seriously affect the healthy development of the market.
Have necessary personnel and vehicles. In actual distribution, there are two schemes: one is dedicated personnel, dedicated vehicles, and dedicated areas; the other is dedicated personnel, dedicated vehicles, and dedicated products. Regardless of the scheme, the personnel and vehicles must be sufficient to meet market demand. (1) In terms of personnel, check whether the distributor has enough staff, their business quality, and work attitude. (2) In terms of vehicles, check whether there are enough vehicles to meet the dual delivery requirements of urban and rural markets; whether the vehicles are suitable—for long-distance rural delivery, except for beer products, box trucks are best; for urban delivery, vans, small delivery trucks, electric vehicles, and motorized tricycles are best.
Have suitable warehousing conditions. Safety, convenience, and ample storage are the basic requirements for a warehouse. (1) Safety: man-made damage is not something the manufacturer can care about or do; the safety I emphasize refers to whether the warehouse's preservation conditions suit the product's characteristics. For example, for flour-based products, does the warehouse have ventilation, shade, waterproofing, and moisture resistance? Also, if the distributor's product series include products with severe physical and chemical conflicts in packaging, to prevent mutual contamination, damage to packaging, or deterioration, a dedicated warehouse or storage area is needed—does the distributor have that? (2) Convenience: I want to emphasize whether the manufacturer's delivery vehicles can easily reach the distributor's warehouse. This has a profound lesson. I once had a instant noodle customer in a county in Zhumadian, whose home and warehouse were in a township. The company used return vehicles over 10 meters long for delivery, but due to the poor location of the warehouse, the vehicles could not reach the customer's warehouse, causing many unpleasantries between the company and the distributor. (3) Ample storage: relative to our products, does the distributor leave enough storage space for us to adapt to different stocking needs in off-seasons and peak seasons?
The company's products occupy a dominant position in the distributor's mind. Among today's distributors, very few are exclusive; most have multiple product series and multiple brands. I think it is better to let our daughter (product) play the "first lady" of a second- or third-tier customer than to play the "second wife," "third wife," or even "nth wife" of a big customer. The size of a customer's strength should be seen in absolute terms, but more importantly in relative terms—how much the customer will truly invest in our products in the future is the most critical. We must prevent distributors from being "willing but unable" and, more importantly, from being "able but unwilling." As a manufacturer, we can judge from the following aspects: (1) Whether there are competing brands in the distributor's product categories (if the products compete but are complementary, such distributors can also be chosen); (2) Whether there are product series with higher profit margins under the same resource investment; (3) Whether the product launch timing conflicts with the peak season of the distributor's high-profit, resource-intensive products.
Third, the "3" has two meanings: one is to conduct market surveys in more than three townships; the other is to establish about three prospective customers (i.e., potential customers).
Select more than three townships for market surveys: (1) Investigate the local cultural environment, economic conditions, consumption habits, etc. (2) Investigate the local competitive product situation, such as main brands, main specifications, second-tier prices, promotional policies, etc. (3) Investigate the "public opinion" of distributors, listening to the evaluations of township second-tier distributors regarding the distributor's resource status, operational status, credibility, and personal connections (focus on intended customers).
Establish about three prospective customers (i.e., potential customers). Based on the market survey results and different reactions in negotiations with customers, combined with the characteristics of our company's products, initially select about three prospective customers. The number of about three is set to avoid too many, which would interfere with work efficiency, and too few, which would be single-point and cause passivity in case of unexpected situations.
Fourth, the "1" refers to determining the ideal distributor. Customers cannot be perfect; we can only choose relatively ideal customers. According to our investigation and analysis, rank the prospective customers by idealness, then negotiate and proceed to the specific work of signing contracts, making payments, and stocking goods. The first one to pay and stock is our ideal distributor.
The "7531" rule can be summarized as: "7 AM, 7 PM"; "5 elements"; "3 prospective customers"; "1 distributor." I would be very happy if my summary can be of reference to friends on the sales front line.
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