Reminder: Click the “↑” above to follow “FMCG Distributor Professional Consulting” for more marketing and distributor internal management content.
Supermarkets are a big swamp
We often see this phenomenon: a distributor finally obtains the distribution rights from a manufacturer, but without doing market research or analysis, they dive headfirst into supermarkets. After six months, they have sold only a few boxes of goods but paid a lot of fees. They then complain that supermarkets are difficult to operate and demand too much, and finally have to exit.
Distributors see that chain supermarkets are developing rapidly and moving volume quickly, so they rush to join the ranks of supermarket suppliers. But without adequate preparation, strong financial support, professional sales staff, or a complete logistics system, they rely entirely on enthusiasm, and the results are predictable. Especially the financial pressure: when operating only a few stores, they can barely manage, but when they expand widely, they find that the 30-to-90-day payment terms are deadly!
Modern retail is a channel with high entry costs and high exit costs. Exiting means that all previous expenses such as entry fees, account opening fees, and barcode fees become wasted. Who would be willing to leave? The more they struggle, the deeper they sink, becoming victims of the commercial game.
Do you really have to do supermarkets?
The distribution field is undergoing major changes, and the distributor community is in a transition period. Where is the key to transformation? The author believes that the success of transformation depends not on whether you can catch up with the "trend," but on whether you can truly assess the situation and choose a field that suits your characteristics, especially your strengths, for deep development.
That's easy to say! You see, the industry is full of talk about channel flattening, and the media uniformly "guides" distributors to transform to "modern retail." In such an environment, it is not easy for distributors to maintain independent and clear thinking!
For small and medium distributors whose advantages are not in modern retail, survival and development mainly depend on two questions:
Have the selection criteria of mainstream manufacturers changed?
Sales channels, terminal service networks, internal management systems (storage, human resources, sales teams, etc.), management's business philosophy, and financial status are all factors that mainstream manufacturers comprehensively evaluate. They no longer measure from just one or two aspects.
Therefore, don't think that just because you enter supermarkets, the manufacturer will cooperate with you long-term. If you lack the ability to operate in supermarkets and suffer a big loss there, can you still expect the manufacturer to give you relief?
Can modern retail dominate the world?
Of course not.
Bai Jiu Jing Xiao Shang Xue Yuan: bjjxsxy
Modern retail and traditional outlets are different shopping places that consumers choose at different times. Although modern retail is playing the price card, there is no doubt that in today's China, modern retail is still a high-price format. Before the consumption level reaches a certain point, modern retail cannot completely replace traditional outlets. In cities below the second tier, the vast majority of consumption still occurs in traditional small and medium outlets (individually operated independent or chain small "supermarkets" are very different from chain supermarkets and hypermarkets; this article classifies them as traditional outlets).
On one hand, for a long time, traditional outlets will remain an important support for market consumption; on the other hand, whether to do modern retail is not the only criterion for manufacturers to choose distributors. Weighing the pros and cons, if you are a small or medium distributor, would you still rush into modern retail without considering the consequences?
Never go for "full coverage"
Modern retail costs are so high, why are there still so many brands and distributors fighting in modern retail?
On one hand, the huge sales expectations are tempting; on the other hand, the "full coverage" theory is to blame. Coca-Cola's strength and brand position allow it to shout the slogan "everywhere," but can you? We can see many channels: hypermarkets, chain supermarkets, chain convenience stores, small supermarkets, wholesale markets, grocery stores, schools, etc. According to Coca-Cola's classification, there are at least 22 types. Think about it: as a small or medium distributor, can you achieve full coverage?
Since you cannot achieve full coverage, you must make trade-offs. But what is puzzling is why so many distributors who started from traditional channels are crying and shouting to do modern retail? Attacking the enemy's strength with your weakness is extremely unwise!
Distributors' sales teams often evolve from guerrilla forces to regular armies, but most small and medium distributors are still guerrillas. Since you are guerrillas, you must know what your team can and cannot do. What is the wise approach? Concentrate your sales advantages, logistics advantages, and financial advantages to serve the market you are best at—traditional outlets.
Don't be lazy
One expert's analysis is quite correct: to be a terminal-oriented distributor, whether doing supermarkets or traditional outlets, only by controlling the terminals do you have value and a voice.
But who should we control? Of course, we need to match our status. Small and medium distributors have no chance of equal dialogue with chain terminals, so how can we talk about control? From this perspective, traditional small and medium outlets are the most ideal terminals for small and medium distributors.
Currently, the market is still dominated by traditional small and medium outlets. They are everywhere and truly provide consumption convenience. But they are limited by scale, personnel, and funds; they cannot purchase large quantities of goods themselves, and they most hope for door-to-door delivery, frequent purchases and quick sales, without stockouts or overstocking.
On one hand, small and medium terminals have a large demand for services; on the other hand, the vast majority of manufacturers ignore these needs. Currently, only a few manufacturers or distributors with service awareness truly value small and medium terminals. Most distributors still serve them through wholesalers below them. Not to mention that a large portion of profit is given away to others, but if you don't serve terminals directly, you can't talk about controlling them, and you don't even know how many terminals there are! What value can such distributors have in the eyes of manufacturers?
Many distributors think that serving small terminals is a very tedious task. Indeed, small terminals require small quantities, high timeliness, and high delivery frequency, which is time-consuming and labor-intensive. But think again: these small terminals also have advantages such as good credit, no credit sales, personal relationships, high loyalty, and easy maintenance. Making money easily and effortlessly—how can such a good thing exist?
In Xi'an, there is a distributor specializing in dairy products. Due to limitations in funds and personnel, the boss focused sales on community retail terminals. He devoted all his energy, manpower, and resources to serving more than 3,000 retail outlets in Xi'an, gradually achieving annual sales of over 70 million yuan, and quickly becoming a major supplier in the Xi'an market. He did not enter supermarkets or develop wholesalers to serve retail outlets. The stability of more than 3,000 outlets is very good, and product prices and customer inventory are under his control. If you were a manufacturer, wouldn't you like such a distributor? Wouldn't you support him?
In Shaanxi, there is a liquor distributor who developed step by step from a restaurant supplier. Through the agency sales of baijiu, he covers more than 4,000 restaurant retail terminals. For large and medium catering enterprises, he provides full-time promotional staff and after-sales service personnel. During the service process, he formed very standardized operating procedures for product entry, promotion, and after-sales payment collection. Annual sales are nearly 200 million yuan. The sales network attracts more products wanting to join, and his influence is increasing.
As the Art of War says: "Harming ten fingers is not as good as cutting off one finger." This is the power of resource concentration. Distributors should concentrate their resources and advantages to attack the enemy's weak markets. Rather than skimming the surface in every type of terminal, it is better to focus on one type and do it deeply and thoroughly; rather than entering new terminals that look beautiful but are actually uncertain, it is better to focus on the small and medium terminals where you started and are familiar with. Increase investment, and the returns will not disappoint you.
--------------------------------------
Like this article? Feel free to click the top right corner to share it to your Moments;
About us: WeChat ID: FMCG Distributor Professional Consulting Management Account introduction: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal:
Click the "Read Original" below to enter our micro-community for interaction, exchange, and questions.
Learning and exchange QQ group: 344257092
Reply 1 to enter the micro-official website to view historical messages.
-----------------------------------------