---
title: "Twelve Major Pressures and Sales Targets for KA Store Buyers"
description: "This article outlines the twelve major pressures faced by buyers in KA hypermarkets, including contract negotiation times, number of contracts, total fee income, sales targets, pricing and gross margin requirements, promotional item arrangements, and more. It also lists key sales indicators such as sales volume, gross profit, customer transaction value, foot traffic, and product turnover speed."
author: "王济保"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-03-05"
language: "en"
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# Twelve Major Pressures and Sales Targets for KA Store Buyers

> This article outlines the twelve major pressures faced by buyers in KA hypermarkets, including contract negotiation times, number of contracts, total fee income, sales targets, pricing and gross margin requirements, promotional item arrangements, and more. It also lists key sales indicators such as sales volume, gross profit, customer transaction value, foot traffic, and product turnover speed.

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1. **Contract negotiation times and signing deadlines.**
Every head buyer in a KA hypermarket imposes pressure on their purchasing staff regarding contract negotiation time. Each manufacturer is allowed only a certain number of negotiation sessions, each with a set duration, and contracts must be signed by a specific date. For example, in one foreign-owned hypermarket, each negotiation session with a manufacturer for contracts or promotional schedules is limited to two hours, and the number of negotiations must not exceed four. All contracts for the year must be signed within the specified time (before April).

2. **Number of manufacturers signing contracts.**
For all categories under a buyer's responsibility, the KA hypermarket sets a target for the number of contracts to be signed this year, typically based on the previous year's number. Each manufacturer or supplier brings in contract income (non-operating income) to the store. If a buyer's department must sign contracts with three manufacturers, each contributing 1 million in contract fees, the total income would be 3 million. If one manufacturer fails to sign this year, it is impossible for the other two to make up the missing 1 million. Thus, the number of signed contracts ensures contract income. If a buyer fails to meet the contract count target, let alone the total contract fee income, they will not achieve either of these two indicators.

3. **Total contract fee income and percentage.**
Building on the above, a buyer can only achieve this target if they meet the previous indicators. Whether they can secure the full 1 million from each negotiation depends on the negotiation process and year-end results, which relates to the buyer's forecasting ability and judgment. Some fees are fixed, while others are a percentage of sales. Naturally, KA hypermarket managers pressure buyers, who in turn pressure manufacturers. Therefore, some KA hypermarkets create unreasonable terms to protect their fee income. For example, one store designs contracts as follows: if sales reach 10 million, the fee is 15%; if sales exceed 10 million, the fee remains 15% of sales, and annual rebates are charged as per the contract. If sales do not exceed 10 million, a guaranteed fee of 1.5 million must be paid. Each year during new contract negotiations, KA hypermarket managers set the total fee income and percentage targets for the coming year.

4. **Responsible total sales.**
KA hypermarket buyers, like salespeople, have sales targets. The department must achieve a certain total sales volume for the year, which creates pressure. Since the store limits shelf space and product assortment, buyers must be selective about brands. A key responsibility is arranging activities and promotions, which are a major source of sales volume for buyers.

5. **Product entry price and gross margin.**
Each KA hypermarket sets a normal gross margin for products, which relates to purchase price and selling price. For example, if a store requires a 30% gross margin and the manufacturer offers a purchase price of 7 yuan, the store will sell at 10 yuan to achieve that margin. If the manufacturer's suggested retail price is 10 yuan but the store sets the retail price at 8.5 yuan, the purchase price must be 6.4 yuan, making it difficult to cover costs. However, selling at 10 yuan may reduce competitiveness. To run a promotion, the store must increase promotional intensity to be effective. KA hypermarkets typically set prices by adding 30% to the purchase price, and some require the market's lowest price plus a 30% margin.

6. **Actual product sales gross margin.**
At year-end, KA hypermarket managers evaluate buyers on actual product sales gross margin. The calculation is: (invoice sales amount - product purchase amount) / invoice sales amount = actual sales gross margin. Some buyers calculate the actual gross margin for their categories before year-end. If they cannot meet the target, they may ask manufacturers for additional margin compensation or products. Sometimes buyers require maintaining the original margin during promotions to ensure the target is met.

7. **Promotional items per period.**
A crucial indicator for KA hypermarket buyers is arranging a certain number of promotional items for each promotional period, especially for DM (direct mail) features. This is essentially a target for DM fee income. Therefore, buyers may proactively request DM promotions. Some KA hypermarkets require a set number of DM promotions and TG (end-cap) displays per year in the annual contract to ensure this target is met.

8. **Market lowest price for promotional items.**
The price of promotional items affects actual sales volume. The key issue is that during DM promotions, KA hypermarkets require the market's lowest price. If different KA hypermarkets run the same item in the same period, they compare to see if they have the lowest price. If not, they may lower prices to match or undercut each other to achieve the lowest price.

9. **Sales volume per promotional period.**
When arranging promotional items, buyers consider the previous period's promotional effectiveness, i.e., actual sales during the period. If your product does not meet the store's standard for DM or TG features in a period, the buyer will not allow your product to be promoted. After each promotional period, the store reviews performance, and buyers who fail to meet targets face severe assessment.

10. **Stockouts during promotions.**
A major pressure for buyers is stockouts of promotional items during the promotion. Severe stockouts lead to complaints from stores, and store managers may protest strongly at period-end review meetings. Therefore, buyers push for delivery before and during promotions and include penalty clauses for stockouts in contracts.

11. **Product entry selection and display position.**
Each year, KA hypermarket buyers require manufacturers to bring in new items, mainly to increase non-operating income and invigorate the product assortment. Stores also impose limits on the number of items and display positions, so they have a product elimination system to ensure sales targets are met.

12. **Competitors' end-consumer prices.**
Buyers have a routine task of surveying competitors' end-consumer prices to ensure competitiveness and understand market conditions for negotiations with manufacturers.

**Purchasing Sales Indicators:**
1. Sales volume
2. Gross profit
3. Customer transaction value
4. Foot traffic
5. Product turnover speed
6. Buyer psychology: New product entry means new entry fees and new opportunities for sales growth...

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