Warm Reminder Click ↑ “FMCG Distributor Professional Consulting” for more marketing and distributor internal management content.
Cross-region selling is a common topic that seems to have no perfect solution. In fact, cross-region selling itself is a behavior that conforms to commercial common sense. In a sense, it is reasonable and normal. The so-called solving of cross-region selling issues is actually about maintaining the maximization of interests for distributors or manufacturers in a certain market. Cross-region selling itself is just a business behavior with causes and effects.
Cross-region selling has three basic characteristics: First, who initiates the cross-region selling? Is it the manufacturer's sales personnel, the local distributor, or even the local secondary wholesaler? Second, what is the purpose of cross-region selling? Is it purely for maximizing someone's interests, or is it an act of revenge? Third, what are the factors that restrict or influence cross-region selling? Is it the commercial cost of cross-region selling? If the cost is too high, there is no commercial value, unless it is purely for emotional revenge. Or is it the fear of severe retaliation from the other party?
Based on the above analysis, it is not difficult to find that small distributors are more likely to encounter cross-region selling harassment. Generally, large distributors have stronger social relationships locally, sensitive market information, and broad connections. They also have large sales volumes, which attract the attention of senior manufacturer management, and they maintain close relationships with them. Neither other distributors nor manufacturer sales personnel dare to offend them. Small distributors, on the other hand, have low status with senior manufacturer management; some senior managers may not even know these small distributors, let alone value them. Due to their limited strength, they lack control over their market, insufficient coverage, and even lack the ability to collect market information. This makes it possible for market sales personnel, other distributors, and even some secondary wholesalers to bully small distributors. Small distributors often have no one to appeal to, feeling helpless as they watch their market being disrupted by cross-region selling. If cross-region selling happens repeatedly, how can they continue doing business?
In fact, many distributor friends say that the most effective solution to deal with cross-region selling is to fight. Reasoning is useless; if the other party were reasonable, they wouldn't engage in cross-region selling. Since the other party (the cross-region seller) is unreasonable, why should I be reasonable? Just resort to force. If anyone dares to cross-region sell, beat them thoroughly and confiscate the goods. See who dares to cross-region sell again. However, we live in a legal society, so fighting is not a solution.
Problems always have solutions. Now we advocate a harmonious society, and there are many harmonious ways to solve cross-region selling issues.
When a small distributor encounters cross-region selling, first analyze three aspects: First, who initiated the cross-region selling? Second, what is the purpose? Third, what is the biggest problem in the other party's operation? Once these issues are clarified, the corresponding solutions will naturally emerge.
Who initiates cross-region selling? There are mainly three types: manufacturer sales personnel, distributors from other regions, and local sub-distributors.
What is the purpose of cross-region selling? First, to make money; second, to retaliate.
What is the biggest problem in the cross-region selling operation? First, the operation cost is too high, even exceeding the profit, which loses the meaning of cross-region selling; second, fear of retaliation from the other party, leading to long-term enmity; third, the goods brought in cannot be sold normally, leaving them stuck.
Now, let's analyze the reasons and solutions one by one.
Generally, the initiator of cross-region selling is often the manufacturer's sales personnel, or at least they are involved (of course, most manufacturer sales personnel who engage in cross-region selling are not responsible for the affected region). Manufacturer sales personnel are not afraid of distributors. They engage in cross-region selling mostly for personal sales performance, which is controlled by senior manufacturer management. In other words, manufacturer sales personnel may not care about distributors, but they dare not ignore senior management. The only ones who can restrain these sales personnel are the senior management.
However, senior management often does not pay much attention to small problems in a local market. Moreover, cross-region selling involves many gray areas. For example, whether it is active or passive cross-region selling, or just natural product flow, and whether it will stimulate distributors to improve their management and investment in their own markets. Especially for small distributors, senior management rarely pays close attention to cross-region selling in a single market. But if there is large-scale cross-region selling or a trend towards it, it will have a very serious negative impact on market construction and pricing system, which cannot be ignored by senior management. Once senior management pays attention, the sales personnel below will not dare to operate cross-region selling. However, small distributors often only encounter cross-region selling in their local market, far from attracting senior management's attention. What should they do?
Unity is strength. Among the manufacturer's distributor network, most are small and medium-sized distributors. If a small distributor can unite with a group of similar small and medium distributors to jointly raise an issue with senior management, senior management will naturally attach great importance. That is, after a small distributor encounters cross-region selling, they should quickly communicate with other distributors in the manufacturer's network, inform them of the cross-region selling issues and the resulting losses, and emphasize that this is the consequence of senior management's indulgence of their sales personnel. "Today it happened to me, tomorrow it could happen to you. I am a lesson. You don't need to suffer the same. For safety and prevention, let's unite to report this issue to senior management to ensure our interests are not affected." Imagine if a manufacturer's sales personnel operates cross-region selling in a certain regional market, leading to continuous protests and appeals from multiple distributors nationwide. Senior management will naturally attach great importance. After all, senior management may not care about one small distributor, but they dare not ignore a group of distributors. In most cases, to appease the distributors, senior management will order a strict investigation, seriously deal with the responsible personnel, and compensate for losses. This not only recovers some losses but also fundamentally deters other manufacturer sales personnel. Although it's a small distributor, they have great energy and can cause trouble, so it's best not to provoke them.
The other two types of cross-region sellers are peers, local or external distributors. Their cross-region selling is either for greater profit or for revenge. Based on these two points, we can seek solutions.
From cross-region selling to profit realization, there is a necessary step: the goods brought in must be sold smoothly. There are many aspects that can be attacked:
First, do the goods have the relevant quality inspection procedures? Generally, cross-region selling rarely has these procedures. Even if they do, they are issued by the market management department of the origin market. Domestic market management departments often do not recognize each other's certifications. Your goods may be proven qualified in another market, but they may not be considered qualified here; I need to re-inspect. If a local small distributor reports to the local market management department, it will definitely cause trouble for the cross-region selling distributor.
Second, are the accompanying gifts or other items complete? Cross-region selling usually does not include gifts. If the local small distributor amplifies this information, it will make it difficult for the cross-region distributor to sell the goods at normal prices.
Third, many manufacturers have different product strategies for different regions. So, are the goods brought in produced for other markets? If the product applicability and grade are lower than the local genuine products, the cost-performance ratio is reduced. Spreading this information will affect product sales.
Fourth, even for the same product from the same manufacturer, Chinese consumers have a deep-rooted concept of product grades, such as big factory vs. small factory, genuine vs. substandard. There will be some differences between goods brought in from other regions and those sold locally. These differences can be attacked, for example, by spreading methods to distinguish genuine products from substandard ones (i.e., the goods brought in).
Through these attacks, it will greatly hinder the normal sale of the goods brought in, making it impossible to realize their value. Thus, the economic significance of cross-region selling is lost, and the confidence to cross-region sell again is diminished.
There is also cross-region selling for revenge. Many people hold grudges over trivial matters and must find an opportunity to vent, even at the cost of money or interests. If the distributor who suffered from cross-region selling once offended the cross-region seller in some occasion or period due to economic or emotional interests, the latter may engage in cross-region selling to vent or recover something, seeking temporary satisfaction. In such cases, hard confrontation is useless; you need to proactively show goodwill. Give the other party a way out. Chinese people care about face; if they can't swallow this anger, they will demand an explanation, whether they are right or not. However, note that superficial goodwill is only one aspect; you also need other means. As a US president said, "Speak softly and carry a big stick." You also need to demonstrate through examples that you have the ability to counter cross-region selling, but you prefer to handle it peacefully and don't want to escalate.
Of course, the best solution is prevention. Solve cross-region selling from a preventive perspective, because as long as you are in business, cross-region selling will always happen, anytime and anywhere. For the current cross-region selling issues, if you don't deal with them promptly and create some impact, they will inevitably recur.
If others cross-region sell, you can also cross-region sell. Tit for tat. If others cross-region sell, it means your purchase price is too high; find a way to get lower-priced goods.
Domestic manufacturers treat small distributors as just a customer. They cannot truly protect the distributor's market; this is reality. Only by serving your customers well and developing your market to a certain level will you naturally be protected.
- Investigate the source and gather evidence;
- Report to the manufacturer in time;
- Report to first- and second-tier distributors to prevent individual sales personnel behavior;
- Give threats (first- and second-tier distributors are more afraid of cross-region selling);
- Find ways to strengthen yourself.
---------------------------------------------- Like this article? Feel free to click the top right corner to share to your circle of friends;
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 interactive communication and questions. Learning and Exchange QQ Group: 344257092 Reply 1 to enter the micro-official website to view historical messages. -----------------------------------------