Many FMCG companies and salespeople equate after-sales service with handling distributor returns, and most distributors share this view. In reality, resolving returns is just the final step; the goal of after-sales management is to have no returns.
Generally, brand owners divide product management into three stages: pre-sales, in-sales, and after-sales. If pre-sales market and product planning and in-sales terminal inventory management are done well, returns can be almost negligible. Companies that manage the full product lifecycle see very low return rates and costs.
Pre-Sales
1. For new products, do not launch without test marketing.
Choose some markets and channels for test marketing. The scope can be nationwide or regional, depending on the product. However, ensure that distributors do not incur losses during test marketing; if a new product sells poorly, the brand must bear the full loss. Brands with this operational awareness will be cautious about launching, with evaluation criteria in place before a full rollout. This protects distributor interests and helps the brand control new product launch risks.
A full launch involves significant listing and promotion costs in the current market environment. If unsuccessful, it causes losses and undermines the confidence of distributors and the brand's sales team in launching new products. For convenience foods, campus channels are often chosen for test marketing. If repeat orders occur more than three times, the product shows market potential, and later it is typically listed in CVS, hypermarkets, and A/B-class large stores.
2. For mature products, develop new distributors.
Match products by channel and roll out to distributor channels and outlets in phases. Only when the sell-through of the first batch meets the per-store sales targets set by both the manufacturer and distributor should the next phase of store expansion begin. For the initial launch, select the best-selling SKUs, matching different SKUs to different channels. For convenience foods, hypermarkets, A/B-class large stores, and campus channels may have more SKUs; C-class stores should be stocked based on the difficulty of obtaining shelf placement relative to competitors; D-class stores should only carry one or two core SKUs per category.
Pricing should consider competitor prices, local consumption capacity, and current prices at snack chains and discount supermarkets. Generally, prices should be 10%–15% higher than snack stores; too high a price will hinder sell-through and lead to large-date products. After distribution, brand sales personnel should conduct monthly sales data reviews with distributors. For stores without reorders, visit them to understand the specific sales situation; also visit stores with good sell-through to identify what sales actions drove sales and whether these can be replicated.
The highest level of after-sales for brands: good after-sales management means no after-sales.
- For core large stores meeting sell-through standards, build image stores and support with consumer promotions to promote the brand and product.
- For B-class stores, use concentrated shelf displays or multi-point displays, incentivized by cash rewards to distributor sales staff.
- For C/D-class stores, it is sufficient to have core SKUs concentrated on the golden shelf.
Maintaining newly opened distributor stores is crucial. Many brands see distributor salespeople neglect stores after the initial distribution, unless the product sells exceptionally well (which is rare). Otherwise, the number of active stores quickly declines. Generally, maintenance incentives for B/C stores should last at least six months, until the brand enters the distributor's KPI assessment, after which you can relax slightly.
After two months, review the data again. If image building and consumer promotions were conducted in the first month, analyze the effectiveness to plan future market spending. Typically, many brands start investing in store displays and market promotions from the third month, relying on natural sell-through in the first two months. Then, based on POS data from LKA and A/B-class large stores, decide on display investments and promotion plans, and use C/D-class store replenishment data to set distribution targets and optimize displays to boost sell-through. Simultaneously, calculate the distributor's monthly purchase volume and safety stock to avoid stockouts or overstocking. At this point, an initial market spending model is established.
Pre-sales planning is the core of after-sales management; doing this well accounts for half the success.
In-Sales
In-sales management mainly involves daily store management and promotion management.
1. Display management.
Main shelf displays should be with the category. Traditional supermarket shoppers are habitual and familiar with shelf layouts; if your product is not in the same category section, it will likely affect sell-through. Additionally, whether end caps and floor displays are in main aisles, whether they can be used for image building, whether they are paired with promotional pricing, and product availability all affect sales. Also consider whether shelf placement is on the golden shelf and whether displays are concentrated.
2. Price management.
Often, poor sell-through is due to high store pricing; in such cases, coordinate with the distributor to adjust prices. In C/D-class stores, unclear or missing price tags also hinder sell-through. For new products, consumers may not buy if they don't see a price, fearing "price刺客" (price gouging).
3. After promotional activities, promptly monitor store inventory.
Assess whether normal sales will cause date issues, and if so, transfer stock promptly. Arrange promotions for products with poor dates to avoid expiration.
4. During monthly store data reviews, pay attention to inactive stores.
For stores that haven't ordered for two consecutive months, arrange visits to understand the situation: if sell-through is poor, transfer stock to other stores or run gift promotions to accelerate turnover. If stockouts are due to distributor salesperson neglect, notify them to replenish promptly.
5. Pay attention to products nearing their shelf life in some stores.
Often, brand and distributor salespeople think such products can still be sold, avoiding losses. In reality, these should be promptly recalled and handled centrally for efficiency. For convenience foods, buy-one-get-one-free promotions at campuses and farmers' markets work well. If not recalled promptly, they become unsellable, stores won't order new stock, and if competitors have better dates, it gives them an opportunity, hurting your sell-through. If you replace with fresh dates while competitors have poor dates, you hinder their sales and gain a competitive edge at the terminal.
6. Transfer slow-moving stock from poor-performing stores to those with good sell-through.
After-Sales
After-sales issues must be handled at fixed times and centrally to build habits among brand and distributor salespeople.
For products with a 9-12 month shelf life, quarterly processing is recommended, e.g., in February, May, August, and November. For convenience foods, campus channels are best: February and September are school openings, June and December are near holidays, and students studying late have high demand. Once a habit is formed, regular processing costs are minimal: dates are still good, promotions don't need to be aggressive, and losses are small. Near expiration, losses are nearly 100%, plus disposal costs.
For centrally returned large-date products, promotions are the usual way to clear them. The intensity varies by time to expiration: buy-two-get-one-free and buy-one-get-one-free are more attractive than discounts and accelerate sell-through.
Large-date convenience foods can be quickly cleared at campuses and farmers' markets due to high demand for these relatively essential products. For snacks and beverages, it's more challenging, and the scenarios and intensity of handling differ.
This approach incurs minimal costs; if brands manage pre-sales and in-sales well, centralized processing costs typically don't exceed 1% of annual purchase value.
For brands, managing after-sales has four benefits:
Timely adjustment of products with poor dates accelerates sell-through.
Improves store owners' trust in distributors, facilitating future new product launches.
When brands handle after-sales, distributors gain confidence to fully distribute, increasing distribution and brand awareness, boosting sales, and laying a foundation for sustainable brand development, enhancing competitiveness versus rivals.
With after-sales support, distributors can accept lower margins, reducing terminal prices and improving price competitiveness.
For distributors:
Accelerates the distribution of new brands, quickly boosting performance.
Provides clear profit expectations.
Relieves pressure on distributor sales staff, making them more willing to push new products.
Not all brands can manage after-sales; distributors should be cautious with the following:
Sales teams that are too small, lacking professional sales capability, and consisting only of order takers. Staff turnover is high, and new staff may not honor commitments; irresponsible staff may delay.
No after-sales management system. After-sales isn't just about handling large dates; without a system, large-date inventory can accumulate, and if returns exceed the brand's capacity, many brands default on their commitments. Because most people choose short-term over long-term interests; also, without a system, after-sales issues cannot be systematically resolved, even if one-time handling is possible, it's hard to sustain.
Brands with high sales staff turnover or lacking responsibility deserve special attention.
Final Thoughts
With channel fragmentation, sell-through in traditional supermarkets and general stores is slowing. In the first half of this year, many distributors saw return rates reach 7%–8%, directly causing losses. Therefore, after-sales management has become a key factor for distributors when choosing brands.
If a brand can provide after-sales management, that's a competitive advantage. In the current business environment, if brands consider distributor interests more and offer more support, I believe it will benefit the brand in return, enhancing its market competitiveness!