Many sales managers often complain that distributors are difficult to manage, and that they are tricky. Despite offering many policies, they are still hesitant when it comes to making payments at the end of the month. Distributors bombard sales managers with complaints upon meeting, making them both fearful and resentful. In fact, managing distributors can be easy if you find the right approach. Based on years of experience in distributor management, here are three tricks for troubled sales managers.
First Trick: Help Distributors Make Money Distributors open their doors for business to make money. As a sales manager, if you keep this in mind and convince them with benefits, you'll get along well with them. Of course, these benefits must be legitimate and not at the expense of the manufacturer's interests.
As a manufacturer's representative, you naturally understand the manufacturer's policies better than distributors, and you have some flexibility in handling promotional resources for different distributors. By using this authority wisely, you can make distributors realize that you are their key stakeholder, that you can help them secure better policies and earn more profits, and thus they will respect you. However, sales managers must maintain a balance between "supporting" and "restraining" the same distributor. You cannot blindly support one distributor, to prevent other distributors from turning against you or that distributor from becoming too powerful. Similarly, you cannot blindly suppress a distributor, to prevent them from terminating the partnership and causing market stagnation or even collapse.
There are also techniques for "supporting." Don't reveal all the manufacturer's policies to distributors at once; leave some room for flexibility. For example, if the manufacturer offers a 10+1 deal, you can tell the distributor it's 15+1, and say, "If you order more than 1,000 units, I'll try to get you a better deal." This way, the distributor helps you meet sales targets and appreciates you for securing better support.
Once goods are delivered to the distributor's warehouse, the sales manager must guide and help the distributor sell them. Don't be a manager who "does nothing but collect payments" (ignoring slow-moving stock, inventory, returns, and exchanges). I once had a distributor who often mentioned a sales manager from a certain cosmetics brand who visited only once a month, just to collect payments. As soon as the distributor agreed to pay, the manager would leave for the hotel before the distributor even returned from the bank. After that, he was nowhere to be seen, only calling. The distributor complained to the company several times, and eventually, that manager packed his bags and went home.
As a sales manager, you should know the gross profit distributors earn from your products, the company's key promotional products, and high-margin products. (Many companies calculate sales managers' commissions/bonuses by category.) For personal and company interests, guide distributors to categorize products and help them develop a series of promotional policies. How to promote high-margin products, how to use bestsellers to drive sales. Develop different channel policies for different product categories and price points. Guide distributors to create bundles that combine high-margin products, bestsellers, new products, and current promotional items into one policy. Offer buy-one-get-one deals, cumulative discounts, or free gifts. For different customer tiers, create different bundle types. There can be large bundles of 5,000-10,000, small bundles of 800-1,000, long-term packages for a quarter, or short-term packages for half a month. Flexible policies keep channel customers interested and prevent price transparency across categories. This not only helps new product promotion but also stabilizes market prices for bestsellers, increasing both volume and profit. KFC and McDonald's are real examples. Customers order quickly and easily, and average transaction values are higher than a la carte.
By managing your products well and earning the distributor's trust, you can also leverage other brands' resources to promote your products. Create a channel bundle with your product and other products the distributor carries. This saves promotional costs and allows you to "hitch a ride" with a "big shot," boosting your product's prestige and sales.
Only when your products generate more profit for distributors and account for a larger share of their business will they respect you and "obediently" follow your management.
Second Trick: Help Distributors "Spend" Money Nowadays, many distributors often say that operating costs are too high and money is getting harder to earn. Indeed, for distributors with poor management skills, as their business grows, they work harder but earn less. To make money, you need to increase revenue and cut costs. As professionals, sales managers should give distributors reasonable advice to help them cut costs and use funds more effectively.
A. Inventory Management To assess a distributor's business capability, first look at their warehouse. I've visited many county-level cities and counties, calling on local distributors. Their warehouses are just big storage rooms. When goods arrive, they have the loader stack them and count. Then they lock the door and go back to the store. When shipping, they suddenly discover, "Oh, there's a pile of last year's goods," or "Oh, the packaging is broken and has dirtied the others." ...
They don't plan the warehouse by brand or category, nor do they stack inventory by arrival date. When shipping, they don't follow FIFO (first-in, first-out). When the business was small and turnover was fast, problems rarely occurred. But as the business grows and inventory increases, warehouse management becomes crucial. At this point, a professional sales manager who offers advice will surely earn the distributor's gratitude.
B. Account Management Currently, the vast majority of distributors still keep manual ledgers. After a day of deliveries, they stuff receipts in a drawer and jot notes in a notebook. Later, they flip through to see which accounts need collecting. If the notebook is lost, the accounts become chaotic. Uncollected payments mean no money in the account, so they can't pay the manufacturer. Or the payment meant for your company might be snatched by another brand. A savvy sales manager will help the distributor organize accounts, buy a folder for the boss's wife, and teach her how to categorize receipts and keep records. This way, you'll know when the distributor receives payments and when they have cash on hand. When they have money, discuss payments, and you'll get paid smoothly.
C. Sales Staff Management Every manufacturer typically assigns sales representatives to distributors. They draw salaries from the manufacturer but work for the distributor. Sales managers can't manage them all, and distributors can't manage them effectively. How to utilize these reps and maximize their efficiency is often a headache for both distributors and sales managers. Some distributors also hire their own reps but manage them "sheep-style" (loosely). They invest in manpower but see little return. A professional sales manager should guide distributors to establish form-based management systems, entrust distributors to manage the manufacturer's reps, and also help manage other reps. By effectively using distributor reps, the manufacturer gets the effect of several or even a dozen people for the cost of one. It's a win-win for both parties, so why not?
D. Modern Channel Planning and Management Many traditional distributors still stick to traditional channels, either not doing modern channels or not knowing how. Reasons include high costs, heavy capital occupation, lack of operational know-how, limited returns, and even risk of losses. I once saw a distributor operating in a large hypermarket. After three months, the first order's payment couldn't cover the costs. Sales were poor, and they were blacklisted and asked to remove products. Another distributor delivered goods to a supermarket one day, and the next day the owner closed up and ran off with the money. Such incidents are common for distributors. After all that hard work, they lose money instead of making it. No one wants that. So many distributors are reluctant to operate in modern channels. However, as the industry develops, modern channels are taking a larger share of business, not only quickly achieving final sales but also showcasing the brand and enhancing its image. Therefore, manufacturers require distributors to operate in modern channels, but distributors don't want to. What to do?
At this point, the sales manager must provide professional guidance. Offer advice on store types, product categories to enter, gross margins per category, promotional costs, and half-year or even annual promotional activities. Guide distributors on how to invest the least and profit the most.
An excellent sales manager is always a consultant-type. The relationship with distributors is a business partnership, not just drinking buddies. Provide professional intellectual support, help plan their business, and support their growth. Don't just scheme against them, "bloat their bellies, take your bonus, and move on to another place." Only by being professional and helpful, even if you don't drink or socialize, will distributors respect you and follow your advice.
Third Trick: "Fall in Love" with Distributors The best relationship between people is that of confidants. As the saying goes, "A gentleman dies for his confidant; a woman beautifies herself for her admirer." Only by becoming close friends with distributors can you achieve the highest level of management. Pay attention to their business, care about their lives, and connect with them sincerely. When they have worries, they'll come to you; when they have business ideas, they'll think of you first, calling or meeting to discuss. They'll treat you as their chief of staff, their "beloved." Although you're not the boss, you can help them make decisions. At this level, what's difficult about managing distributors? What's tricky about them?
As a sales manager, you gain an important client in your career and a friend in life. Isn't that great? I once managed a distributor who would call me for advice before taking on any new brand, even after I left the company. Our relationship remains strong.
Everything has a method. As long as you find the right approach and put your heart into it, you can succeed. Managing distributors is the same.
-END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and actionable tutorials for companies and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Boost Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | [Long press QR code to follow] Join QQ/WeChat group: Click: Read Original