---
title: "Three Preparations and Five Precautions: Mastering the Contract System to Activate Your Team and Achieve Sales!"
description: "The large-scale practical training course \"Sales Manager Managing the Market: The July Battle\" is now recruiting students! If you are a professional manager in the FMCG industry, still troubled by poor performance, unresolved market issues, or not knowing how to operate in July, you must not miss this online live course. For course dates and registration, please click \"Read the original text\"! Once a distributor's vehicle sales model is mature, they can introduce the \"contract system,\" which means contracting the vehicle and market to subordinates for independent accounting, with the distributor collecting \"rent.\" But the premise is that the distributor must firmly grasp the initiative and strengthen management of the contractor."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-06-22"
language: "en"
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---

# Three Preparations and Five Precautions: Mastering the Contract System to Activate Your Team and Achieve Sales!

> The large-scale practical training course "Sales Manager Managing the Market: The July Battle" is now recruiting students! If you are a professional manager in the FMCG industry, still troubled by poor performance, unresolved market issues, or not knowing how to operate in July, you must not miss this online live course. For course dates and registration, please click "Read the original text"! Once a distributor's vehicle sales model is mature, they can introduce the "contract system," which means contracting the vehicle and market to subordinates for independent accounting, with the distributor collecting "rent." But the premise is that the distributor must firmly grasp the initiative and strengthen management of the contractor.

The large-scale practical training course "Sales Manager Managing the Market: The July Battle" is now recruiting students! If you are a professional manager in the FMCG industry, still troubled by poor performance, unresolved market issues, or not knowing how to operate in July, you must not miss this online live course.
For course dates and registration, please click "Read the original text"!
Once a distributor's vehicle sales model is mature, they can introduce the "contract system," which means contracting the vehicle and market to subordinates for independent accounting, with the distributor just owning the warehouse, responsible for connecting with manufacturers, and collecting "rent." This avoids the problem of "spending grandfather's money without feeling pain" and lets them understand the principle that "if people are diligent, the land is not lazy," and that only by giving can they receive.
But the premise is that the distributor must firmly grasp the initiative, not delegate all market power, and not turn salespeople into "mountain kings," but strengthen management of the contractor.
Therefore, to implement the contract system, three preparations are needed, and five precautions must be taken long-term.

**Three Preparations**

**(1) Have a mature financial information system.** Daily and monthly data can be classified and reflected accurately and timely. A mature financial information system means calculating detailed accounts.

**(2) Have strict regional division.** In the early stage, distributor management is mostly "bandit-style": with a wave of the hand, salespeople scatter, not distinguishing between east and west city. After the first round of distribution, they fight each other, grabbing each other's territories, with several vehicles flying around, and the money earned is not enough for gas!
After regional division, not only are these troubles solved, but the key is that the distributor can let their subordinates show their talents.

**(3) Not only focus on product commissions, but also pay attention to service assessment.** For example, in the beer industry, bottle recycling occupies an important position in the business process. If the distributor does not work on the bottle return link, there will be "one-shot deals." Terminals receive goods, but either no one wants the bottles, or they sell them as glass waste. If the distributor sets improper commission for bottle returns, there will also be the problem of salespeople only delivering goods without returning bottles. Terminal complaints increase, outlets are lost little by little, and sales inevitably decline.

**Five Precautions:**

**1. Substitution.** The profit of the famous brand "Kangshifu" is definitely not as much as the counterfeit "Kangshiniang," so they secretly sell "Kangshiniang" to earn extra money. The distributor's land was originally for planting grain, but tenants may secretly plant sorghum!

**2. Mutual destruction.** Delivering goods to someone else's territory will definitely earn more money. Not only that, they even dump goods at low prices into other regions.

**3. Overdrawing resources.** The contractor always considers profit maximization; whether the market can develop sustainably is not their first consideration. Intercepting, transferring, changing promotions, raising prices of new products, or selling them off are all common tactics of salespeople.

**4. Setting up their own mountain.** After market contracting, terminal outlet customer relationship maintenance is all transferred to the contractor. Salespeople inevitably have the temptation to become bosses. Once the opportunity matures, they will eat from their own bowl while looking at the pot, find a brand, and become bosses themselves.

**5. Eating away at resources.** The reason why distributors can successfully contract out is often because the territory has already been conquered, and there is inevitably a best-selling product supporting it. It is precisely because of this that contractors dare to contract. However, due to fighting separately, the price system gradually becomes chaotic, outlets are lost little by little, and coupled with competitor encroachment, advantages will be completely lost.

Doing the five precautions well is to avoid the distributor going astray into the "hands-off boss" path and avoid planting melons but getting beans.

This article is excerpted from Mr. Fang Gang's book "FMCG Veterans All Do This: Regional Manager's Strategy Kit."

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