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Introduction: During market visits, the author found that many distributors are overly panicked about the industry situation, gradually reducing the number and scale of their stores. Many more are in a state of confusion, unsure how to develop and adjust. Based on this, the author believes that the winter for manufacturers is precisely the spring for distributors—a rare opportunity! How should wine distributors seize this opportunity and ride the trend?

Since the beginning of 2014, with the deep implementation of the new government's "anti-three public consumption" policy, China's baijiu industry has officially ended nearly a decade of rapid growth. Especially for mid-to-high-end and high-end baijiu, market and sales have shrunk comprehensively, with a clear decline. The entire industry has entered a deep adjustment period amid this cold wave.

Looking back at the previous decade of rapid development, we find that most liquor companies could make substantial profits by increasing production capacity, raising product prices, optimizing packaging, and adopting multi-distributor strategies, presenting a thriving scene. Distributors, however, always relied on liquor companies for their difficult development.

During the industry's major growth period, even in difficult circumstances, many outside capital joined this "high-profit, high-value-added" sales camp. In many regions, consumers with connections were developed by liquor companies as group-buying distributors, mostly focusing on government group purchases. This distribution model further intensified the fierce horizontal and vertical competition among practitioners in the mid-to-high-end and high-end baijiu sales market.

Now that the industry has entered a rational adjustment phase, we can anticipate that from the second half of 2013 until next year and even longer, the leading role of government group purchases will completely disappear! The sharp reduction in government consumption will cause group-buying distributors and outside capital, which mainly relied on government group purchases, to quickly perish. The domino effect is spreading into the socialized market with every anti-corruption measure by the government.

As market transformation deepens, production enterprises will inevitably realize that brand cultivation and sales growth depend more on traditional distribution channels. At this time, it is precisely the moment for distributors with rich industry experience and strong distribution capabilities to welcome the spring!

However, not all distributor friends can recognize the opportunities brought by the situation. During market visits, the author found that many distributors are overly panicked about the industry situation, gradually reducing the number and scale of their stores. Many more are in a state of confusion, unsure how to develop and adjust. Based on this, the author believes that the winter for manufacturers is precisely the spring for distributors—a rare opportunity! How to seize the opportunity and ride the trend? In the author's humble opinion, distributor friends need to adjust from the following points:

1. Precise Enterprise Positioning

Precise enterprise positioning is the foundation of all development strategies. Before any transformation strategy, a precise strategic positioning should be established, and paths to achieve this goal should be sought.

For example, super distributors like Yinji, relying on the rigid brand pull of Wuliangye and Moutai and ultra-high profit margins, can leverage their strong advantages to seek strong alliances among many high-threshold ultra-high-end brands and find breakthroughs. In the future, they may even control liquor companies through capital operations.

Large distributors like Taishan Mingyin and Xinbaozhen, which operate multiple brands across regions, can rely on the agency development of national famous liquor brands to achieve company growth. Agency development products first require large sales volume as support, and second, a sufficiently large region. Xinbaozhen and Taishan Mingyin have many stores and wide coverage, meeting the hard requirements of manufacturers. The transformation of such enterprises may rely more on the deep cultivation of each direct-operated store's region; while transforming business group purchases, tapping the scattered consumption potential in the region to form aggregate volume will be the main growth path.

(Due to space limitations, the transformation methods for super and large distributors' positioning will not be analyzed in depth here. The following content mainly explains the transformation methods for small and medium-sized distributors operating traditional channels.)

The transformation path of the above enterprises requires strong capital, connections, teams, and other high thresholds, which may not suit more small and medium-sized trading companies. The precise positioning of small and medium-sized enterprises needs to focus more on the ability to deeply control regional markets. Among such enterprises, distributors with strong channel control and expertise in product brand cultivation will become the backbone for future liquor companies in developing regional markets.

2. Small and Medium-Sized Channel Operator Model

  1. Selection and matching of agency products, and product/brand sorting:

Correct product positioning is the prerequisite for every distributor's transformation. First, many distributors currently have weak control over brands and products; their role between manufacturers and terminals is limited to connecting upstream and downstream. Second, the distributor's financial strength and channel quality also determine the selectable space for product brands and price points. Therefore, the author offers several suggestions on product and brand selection:

  1. Brand selection:

Affected by the overall industry environment, national first-tier brands are extending their product adjustments to mid-range and mid-to-low price points, squeezing the main price zones of original second- and third-tier brands and strong provincial brands. The future survival space for local brands will become more difficult. Therefore, when selecting brands, distributors are advised to choose the extended products of national first-tier brands as much as possible. For provinces with relatively closed regions, such as Shandong and Anhui, it is recommended to choose strong provincial brands or national second-tier brands, gradually adjusting the proportion of local brands in their product mix.

  1. Product selection:

For distributors who control terminal outlets with strong mid-to-high-end liquor sales capability and good sales volume, and have relatively ample funds, it is recommended to focus on mid-to-high-end products, as consumers of these price points have a strong leading effect, which is conducive to brand cultivation. Supplement with mid-to-low-end products to achieve sales breakthroughs, using a multi-price-point combination to reduce operating costs.

For distributors who control terminal outlets with weak mid-to-high-end sales capability and relatively weak financial strength, it is recommended to adopt a product selection strategy with low-price products as the main focus and mid-to-high-end products as a supplement. This is because mid-to-high-end products require high capital, but they can assist distributors in gradually penetrating high-quality outlets and consumers.

  1. Deep cultivation of regional markets:

Group purchase channel sales have shrunk sharply, and relying on large circulation to achieve sales growth is currently an important way for distributors to quickly move volume. What are the standards for channel control? What benefits can deep channel cultivation bring to distributors?

The author's views are as follows:

  1. Standards for deep channel control:
  • Complete outlet database: main selling price points, sales volume, owner preferences, family member situations, etc.
  • Good customer relationships, barrier-free communication, and terminal support for the company's agency products (can be invited)
  • Rapid product distribution and ability to achieve cash-on-delivery distribution (can be distributed / can collect payment)
  • Rapid development of core outlets
  1. Benefits of deep channel cultivation for distributors:
  • Accelerates distributor capital flow
  • Quickly cultivates product channel push
  • Deeply taps scattered group purchases behind outlets, achieving aggregate volume and consumer cultivation goals
  • Builds sales barriers, squeezing competitor sales
  • Brand cultivation capability is the best bargaining chip in negotiations with manufacturers

The benefits of deep channel cultivation are obvious, but many distributors easily fall into misunderstandings during specific operations. The author believes that to refine and penetrate channels, the following points should be addressed:

  1. Establishment of channel archives

To be familiar with the market, one must have a clear understanding of outlet conditions, so outlet archive construction is important. Focus on clarifying the monthly sales volume, main sales channels, and main selling price points of outlets. Also collect information on outlet owners to grasp key points when conducting targeted customer relationship public relations.

  1. Outlet grading, classification, and core outlet development

Based on collected outlet main selling price points and sales volume information, outlets can be divided into 2-3 levels, with classified investment according to different levels. The main investment should be directed to core outlets. Pre-invested expenses can be divided into outlet promotion expenses and increased rebate space. Additional rebates are best implemented in the form of tiered rewards through agreements with outlets on volume targets. In terms of expense investment, more detailed and personalized expense plans can be formulated based on the different consumer groups the outlet serves. For example, if the outlet mainly distributes, expenses should lean toward channel promotion; if the outlet mainly does group purchases, expenses should lean toward group purchase promotional items.

  1. Standardized operating procedures and reasonable salary assessment

Standardized operating procedures first require providing standard operating tools, such as company-issued business phones (to prevent loss of phone orders due to personnel changes), unified nameplates and business visit cards, standard forms, and complete outlet archives. If conditions allow, even unified work clothes, chest badges, and tool kits (containing cash, calculators, business forms, nameplates, visit cards, cloths, etc.) can be provided.

Second, standardize the business operation process standards, such as the "7 Fixed and 8 Steps," and link assessable content with performance assessment.

[Golden 7 Fixed for Standardizing Business Operation Processes]

  1. Fixed area: Define each salesperson's sales area based on the number of outlets or area size.
  2. Fixed route: Fix the daily visit route map (designed according to the number of outlets in the area or by street) to form a regular fixed visit pattern, such as a 10-day cycle, where the routes and outlets visited on the 1st, 11th, and 21st of each month are consistent. This effectively monitors salespeople's processes and cultivates terminal customer relationships and regular stocking habits.
  3. Fixed number of visits: Reasonably arrange the number of outlets to visit daily based on the salesperson's working hours, facilitating effective supervision. Customer files can be retrieved at any time, and the specific outlets visited today can be detailed. Calling the outlet can reveal the salesperson's whereabouts.
  4. Fixed minimum number of transactions: Set a minimum completion target for salespeople.
  5. Fixed minimum sales volume: Break down tasks to daily based on the salesperson's outlet quality, giving each day specific task goals.
  6. Fixed minimum transaction amount: The minimum order quantity for outlets that complete transactions.
  7. Fixed performance: Performance indicators can be divided into quantitative indicators (task volume assessment) and qualitative indicators (stage-specific key work promotion indicators). For example, if the current stage promotes core outlet development, the qualitative indicators can assess the quality, number, and rationality of core outlet task indicators.

[Eight Steps for Salesperson Terminal Visits]

  1. Check preparation before departure each day, such as preparation of work tools, appearance, etc.
  2. Greet the owner upon entering the store.
  3. Check in-store display positions: whether the product's display position has been disrupted or squeezed by competitors.
  4. Dust removal: Some store owners do not pay attention to dust removal details. If competitor products are covered in dust while your product is clean and new, it gives consumers a psychological hint.
  5. Check inventory: Based on in-store sales, set a reasonable safety stock for each store. If below safety stock, suggest the owner restock.
  6. Prize redemption: If the product includes prizes, redeem them promptly to the store, enhancing service and customer stickiness, and building customer confidence in the product brand.
  7. Business negotiation and payment settlement: Discuss recent product promotion policies, stocking needs, etc.
  8. Politely say goodbye to the customer.

3. Management of Sales Personnel:

During market visits, the author learned that the most troublesome issue for distributors is the management of sales personnel, mainly manifested as:

  1. Uneven quality of sales personnel. Experienced and insightful salespeople achieve outstanding performance, while novices or those with less insight have unsatisfactory performance but high stability. Distributors feel about such personnel: "tasteless to eat, but a pity to discard."
  2. High turnover of sales personnel. The stability of excellent salespeople comes from two points: (1) clear development prospects and promotion space within the company; (2) reasonable salary structure and predictable income growth.

How to retain excellent employees while improving the quality of underperforming ones? Many distributor friends cannot break through this bottleneck because they overlook the importance of summarizing and learning abilities.

First, in addition to the traditional "old leading new" mentoring, it is recommended that distributors summarize template-based teaching materials, i.e., summarize the methods and excellent cases of outstanding salespeople, replicate and promote them through training within the sales team, and conduct regular assessments.

Second, standardize business processes so that salespeople conduct business and outlet visits according to standards. Simultaneously, formulate a reasonable salary + performance + commission plan (see Standardized Operating Procedures and Reasonable Salary Assessment), and provide employees with development space.

The above operational methods are mainly aimed at customers operating large circulation channels. The author believes that under the current environment, traditional channels remain the focus for distributors. If combined with business group purchase and micro group purchase sales models, distributors will gain a stronger competitive advantage in the region. Therefore, the author hopes this article can inspire readers and help them operate products and markets more meticulously.

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