Recently, due to the economic environment and channel fragmentation, distributors are having a hard time. They face the dilemma of "working hard for many years, only to return to the starting point overnight"! The problems can be summarized as follows:
- Under the coercive inducement of manufacturers, they blindly advance costs for the manufacturers, but later the manufacturers fail to reimburse in time or even refuse to honor the expenses.
- After investing heavily in market development, they are "dismembered" by the manufacturers—either their territory is reduced or they are directly replaced by the manufacturer's direct operations.
- Due to poor product selection, they are "dazzled by a myriad of choices," leading to a misstep. They confidently charge into the market for the manufacturer, but later the "unit number" disappears—due to the manufacturer's poor management, a host of problems arise, and the company goes bankrupt.
- Due to lack of experience, they are swayed by the manufacturer's silver-tongued promises. In the early stages, they engage in excessive credit sales, but later the manufacturer does nothing to help distribute. In the end, the terminals have slow sales, complaints abound, and distributors are left in tears.
In the above situations, both manufacturers and distributors have their own arguments. Of course, it is reasonable for manufacturers to impose some restrictions and requirements on distributors who violate regulations. The following viewpoints are from the perspective of FMCG distributors, on how to avoid market risks and how to truly cooperate with manufacturers to become stronger and bigger, without violating the manufacturer's rules and contracts.
I. Choice is greater than effort; under a big tree, you can enjoy the shade.
First, choose a good product. In my opinion, a good product must have strong product power—1. High appearance: good packaging design is like a beautiful woman, pleasing to the eye, instantly standing out among competitors, and solving the consumer's first-time curiosity-driven trial purchase. 2. Quality assurance: this is a cliché, but quality requirements are about solving consumer pain points, such as Yunnan Baiyao toothpaste for bleeding gums, JDB herbal tea for reducing internal heat, etc. 3. Innovation and selling points: the market is oversupplied and homogenized; without innovative products, efforts are half the result, and breakthroughs are difficult.
Second, choose a good enterprise. In my opinion, a good enterprise is one that is consistent in words and deeds, honest, pragmatic, not radical, crafts products with ingenuity, and builds the market solidly. It does not make empty promises, deceive, or speculate. Avoid radical, money-seeking enterprises that step on the "bones" of distributors to rise.
Third, choose a good brand. Especially with the emergence of mobile internet, access to information is diversified and convenient, and with the rise of the middle class, consumers are becoming more discerning, with increasing dependence and sensitivity to brands. For distributors, brand cultivation and building are always the manufacturer's responsibility.
In summary, for distributors, the choice of product categories should be adjusted and changed according to their own product structure, operational strength, time period, and changes in the internal and external environment, rather than being rigid. Similarly, it is relatively safe to conduct on-site inspections of markets that are already operating and to select trending products.
II. Play within risks; view the scenery from inside and outside the wall.
First, do not easily let the manufacturer put a "golden hoop" on you. Second, do not be enamored by the enterprise's sugar-coated bullets. Finally, do not waver in negotiations that are not win-win.
Specifically: 1. When operating in the market, resolutely avoid blind credit sales. Even if credit sales are necessary, they must be within your controllable range. Credit sales are poison; cash is the antidote. Many manufacturers require customers to sell on credit to quickly increase market coverage. The disadvantages of credit sales are: 1. High financial risk, leading to bad debts and defaulted orders. Terminal credit sales are like opium; once addicted, it's hard for terminals to quit. 2. Terminals have no inventory pressure, which can easily lead to slow sales or even stagnation. 3. If the manufacturer does not follow up with specific sales promotion actions (atmosphere creation, consumer-themed activities, market promotion, etc.), the more outlets with credit sales, the more zombie terminals, and the more leftover problems.
Act according to your capabilities; cook according to the amount of rice you have; do not take on excessive debt beyond expectations.
Do not covet discounts under high targets, nor hope for channels with high profits but slow returns and large debts.
Do it while observing: the degree of the manufacturer's expense reimbursement and the reputation of existing customers determine the extent to which you advance costs for market and promotion. At the same time, pay attention to the overall development trends of the enterprise.
Do not think that colluding with manufacturers, intercepting or falsely reporting market expenses, and getting something for nothing can lead to joint wealth. Generally, the result is usually "losing both the bait and the fish."
Don't be killed by the manufacturer, but also don't kill yourself. The market is a treasury; how to reasonably and correctly develop and consolidate this treasury is the right path!
In response to the requests of many distributor friends, the third B-end e-commerce inspection class of this public platform will visit three platforms: Wanshang Yizhan, Yunbao Shangmeng, and Weijie Chengpei from July 9-12. Distributor friends interested in transformation can join us for on-site inspections.
Organization Form
- Company visit
- Actual market case visit
- On-site explanation
- One-on-one communication
Participating distributor friends only need to pay a registration fee of 200 yuan. Time: July 9-12, 2016. Location: Changsha, Xiamen.
Interested distributor friends can register by long-pressing the QR code below.
When adding friends, please reply "Third Phase Registration".
Previous Inspection Enterprise Cases:
Yishang Logistics Model Inspection (Second Phase B-end E-commerce Inspection Group at Yishang Logistics)
Caiba Model Inspection
Jinhuobao Model Inspection
Beiquan Model On-site Inspection
Piduoduo Model On-site Inspection
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