---
title: "What Is Holding Back Sell-Through? — Top 10 Factors Affecting Sell-Through in 2014"
description: "On September 28, the WeChat platform of Sugar, Tobacco, and Wine Weekly's Food Edition published an article analyzing the top ten factors affecting sell-through in the food industry in 2014. This article is reposted here for sharing, providing a detailed breakdown of the factors that slow down terminal sell-through from the perspective of distributors."
author: "New Distribution"
publisher: "New Distribution"
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published: "2014-10-02"
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# What Is Holding Back Sell-Through? — Top 10 Factors Affecting Sell-Through in 2014

> On September 28, the WeChat platform of Sugar, Tobacco, and Wine Weekly's Food Edition published an article analyzing the top ten factors affecting sell-through in the food industry in 2014. This article is reposted here for sharing, providing a detailed breakdown of the factors that slow down terminal sell-through from the perspective of distributors.

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On September 28, the WeChat platform of Sugar, Tobacco, and Wine Weekly's Food Edition published an article titled "Top Ten Factors Affecting Sell-Through." The content provides a relatively specific analysis of the current overall sell-through situation for distributors. Today, Daonong has specially reposted it to share with everyone. The full text is as follows:

During the investigation, the reporter summarized the top ten factors affecting terminal sell-through in the food industry in 2014 by analyzing multiple samples. So, in the eyes of distributors, what is slowing down terminal sell-through?

1. **Macroeconomic Environment**
How much impact does the macroeconomic environment have on terminal sell-through? Although few distributors can analyze this thoroughly, the downturn in the macroeconomy has indeed had a certain suppressive effect on consumption. For a long time, driven by China's rapid economic development, the food industry has maintained steady growth, and the potential of the domestic consumer market has been fully stimulated by the deep distribution marketing model. However, when the consumer market is weak, the pressure on channel sell-through naturally becomes more apparent. For enterprises, the strategy of relying solely on stocking channels to digest production capacity is no longer viable; distribution without sell-through is merely inventory transfer. For distributors, they should strengthen real-time inventory monitoring, grasp the changes and trends in terminal sell-through, and mitigate the operational burden and product losses caused by poor sell-through.

2. **National Policies**
With the introduction of a series of national policies targeting the three public consumptions (official receptions, official vehicles, and official trips), high-end consumption has been significantly impacted, especially in the group purchase and holiday gift markets for high-end food. In fact, the impact of national policies is not limited to high-end consumption; some affordable food products also face difficulties in sell-through. Some distributors have stated that in the past, during holidays, some public institutions and companies would issue supermarket shopping cards as employee benefits, which were mostly used to purchase bulk groceries and beverages. Now, due to policy guidance, some institutions and companies have adjusted their shopping card issuance, which has affected the purchasing power of general consumers to a certain extent. This is evident from the bleak Mid-Autumn Festival gift market this year.

3. **Consumer Attitudes**
Nowadays, consumers are increasingly concerned about food safety, and the concept of healthy, safe, and nutritious consumption has taken root. Although food companies are trying to align their brand building and product promotion with these concepts, rebuilding consumer trust still takes time. A beverage distributor from Henan said that in the past, when new beverage products were launched, they gave consumers a sense of novelty and mystery, and consumers were willing to try them. However, with the transparency of information, some beverage categories have been labeled as "with excessive additives" or "unhealthy," and the popularity of bottled water is not unrelated to the shift in consumer attitudes toward beverages. In addition, the abundance of food categories gives consumers more alternatives. In the gift market, pastries and beverages used to be the mainstays, but now high-end grains and oils, honey, nuts, and other health-oriented and affordable products are more favored.

4. **Industry Competition**
In recent years, the food industry has seen a burst of categories, with many new categories and brands emerging. However, while innovation is advocated, imitation and follow-up remain common competitive strategies for many enterprises. Many distributors complain that the slow sell-through is largely due to the excessive number of competing products and severe homogenization, making it difficult to form lasting brand power and sales power, which is also one of the main factors for the low survival rate of new products. At the same time, competition has also driven the integration trend in the food industry, not only eliminating some enterprises with outdated production capacity but also posing survival crises for some small and medium-sized distributors lacking competitive advantages. In a sense, difficult terminal sell-through is just a direct consequence of intensified industry competition, and the deeper impact will continue to spread.

5. **Costs and Profits**
A core factor affecting terminal sell-through is channel profit. Some distributors have reported that enterprises have unreasonable profit distribution in setting channel profits. Especially during new product promotion, to mobilize the enthusiasm of terminals, most of the profit is given to terminals, sometimes even requiring distributors to give up their own profits to assist in promotion, trading profits for sales volume. However, when sales reach a certain scale, profits are compressed to almost nothing. Coupled with rising operating costs and expenses, distributors' profitability has stagnated for a long time, naturally reducing their enthusiasm for promoting products. Therefore, only when product sell-through can bring high profit returns can the channel truly become active. This requires not only enterprises to re-examine their product pricing systems but also distributors to adjust their cost control and operational mechanisms.

6. **Capital Turnover**
For distributors, rapid sell-through means healthy capital turnover. However, the current business model determines that distributors also serve as financing targets for manufacturers and terminals. Specifically, on the manufacturer side, besides stocking during peak seasons, untimely expense verification can also affect distributors' cash flow. If enterprises proactively bear market expenses, it's fine, but once distributors are involved in advancing expenses, they face various verification procedures and standards, leading to delayed verification or even non-reimbursement. Capital occupation by supermarkets is even more common. Taking a supermarket with a product placement of 50,000 yuan and a payment period of 45 days as an example, the capital occupied per store is 100,000 yuan per month. It is precisely the capital occupation from the upstream and downstream of the industry chain that reduces the efficiency of distributors' capital use and weakens the actual effect of sell-through.

7. **Product Operation**
If a product doesn't sell through, there are naturally factors within the product itself. First, as an FMCG, food has inherent requirements for the timeliness of sell-through. Second, brand power and product power are key factors determining sell-through, and they require market cultivation to achieve. Therefore, if manufacturers are unwilling to invest in market development and treat new products as old ones, sell-through will be difficult. If distributors believe that as long as the product quality is good and has selling points, there will be a market, and consumers will buy if they can afford it and find it, without judging the product's adaptability to the environment, they may sell the product to the wrong people in the wrong place, making sell-through a big problem.

8. **Channel Control**
Channels are the core resource of distributors, but at the same time, channels are open, requiring distributors to do market maintenance, consolidate customer relationships, and enhance stickiness. When distributors lack sufficient channel control, sell-through problems arise. Manager Yuan, a distributor from Henan, stated that the reduced loyalty of second-tier distributors is one of the main reasons for poor sell-through. Nowadays, the distribution capability of second-tier networks is still strong, but their dependence on upstream has greatly decreased. The relationship between distributors and second-tier distributors has shifted from "distributors stock, second-tier distributes quickly" to "if they can sell 200 boxes, they only take 100 boxes, anyway there are plenty of sources." Therefore, distributors must reshape their distribution systems and provide more value to downstream customers, which is not only reflected in products but also relies on mature services and cooperation models.

9. **Execution**
It must be admitted that a considerable number of distributors have room for improvement in management, and the most direct reflection is team execution. Improving team execution requires establishing systematic management, including planning daily work, setting compensation and assessment, and achieving goals and tasks. The ultimate goal is to improve work efficiency and create more sales and profits. If execution is weak, then when facing market adversity, it's not just about difficult sell-through; problems such as personnel turnover and unstable customer relationships will also surface. Therefore, the core task for distributors is to cultivate team execution. Good execution leads to good sell-through!

10. **Weather**
When it comes to weather, it's hard to link it to terminal sell-through, but this year's abnormal weather in the southern region has directly impacted terminal sell-through. In the survey, distributors from Zhejiang, Hubei, and other places said that due to excessive summer rain and cool weather, consumers reduced the frequency of purchasing and drinking beverages, which had a significant impact on sales. In addition, distributors also reported that too many rainy days kept people at home, reducing foot traffic at terminals. Not only distributors, but food companies also emphasize the impact of weather on terminal sell-through. Beverage giant Master Kong explicitly stated in its 2014 semi-annual report that "unstable weather" was one of the reasons for slow sales growth. This shows that to achieve rapid sell-through at the terminal, favorable timing, geographical advantage, and harmonious people are all indispensable!

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