This cross-regional selling issue is a common topic, and it seems there has never been a good solution. In fact, cross-regional selling itself is a behavior that conforms to business common sense. In a sense, it is reasonable and normal. The so-called solving of cross-regional selling issues is actually about maintaining the maximization of interests for distributors or manufacturers in a particular market. Cross-regional selling itself is just a business behavior with causes and effects.
There are three basic characteristics of cross-regional selling: First, who initiates the cross-regional selling? Is it the manufacturer's sales personnel, the local distributor, or even the local secondary wholesaler? Second, what is the purpose of the cross-regional 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-regional selling? Is it the commercial cost of cross-regional 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 encountering more 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-regional selling harassment. Generally, large distributors have stronger social connections locally, are more sensitive to market information, are well-connected, and have strong activity capabilities. Moreover, due to their large sales volume, they easily gain the attention of senior management and have close relationships with them. Neither other distributors nor the manufacturer's sales personnel dare to provoke them. Small distributors, on the other hand, have a low status with senior management, and some senior managers may not even know these small distributors, so naturally they are not given much attention. Secondly, due to their limited strength, they do not have strong control over their market, insufficient coverage, and even lack the ability to collect market information, which makes market sales personnel, other distributors, and even some secondary wholesalers bold enough to bully small distributors. Small distributors often have no one to appeal to, and they watch helplessly as their market is severely impacted by cross-regional selling. If this happens repeatedly, how can they continue doing business?
In fact, many distributor friends say that the most effective solution to deal with cross-regional selling is to fight. There is no use in reasoning; if the other party were reasonable, they wouldn't engage in cross-regional selling. Since the other party (the cross-regional seller) is unreasonable, why should I be reasonable? Just resort to force. If anyone dares to cross-sell, beat them thoroughly and confiscate the goods that have been crossed over. See who still dares to cross-sell. However, in a society governed by law, fighting is not a solution.
Problems always have solutions. Now we advocate a harmonious society, and there are many harmonious ways to solve the cross-regional selling problem.
When a small distributor encounters cross-regional selling, they should first analyze and judge three aspects: First, who initiated the cross-regional selling? Second, what is the purpose? Third, what is the biggest problem in the other party's operation during this cross-regional selling? Once these issues are clarified, the relevant solutions will naturally emerge.
Who are the initiators of cross-regional selling? There are mainly three types: first, the manufacturer's sales personnel; second, distributors from other regions; third, local downstream distributors.
What is the purpose of cross-regional selling? First, to make money; second, to retaliate.
What are the biggest problems in the operation of cross-regional selling? First, the operation cost is too high, even exceeding the profit, which loses the meaning of cross-regional selling; second, the fear of inviting retaliation from the other party, thus becoming enemies; third, the crossed-over goods cannot be sold normally and end up stuck in their hands.
Next, let's analyze the reasons and related solutions one by one.
Generally speaking, the initiators of cross-regional selling are mostly the manufacturer's sales personnel, or at least they are involved (of course, the vast majority of manufacturer's sales personnel who implement cross-regional selling are not responsible for the region where the goods are crossed into). Manufacturer's sales personnel are not afraid of distributors. They engage in cross-regional selling mostly for personal sales performance, and the realization of personal sales performance is in the hands of senior management. That is to say, manufacturer's sales personnel may not care about distributors, but no one dares not to care about senior management. The only ones who can restrict these manufacturer's sales personnel are the senior management.
As for senior management, they often do not pay much attention to small problems in a local market. Moreover, cross-regional selling has many aspects that can be disputed. For example, whether it is active or passive cross-regional selling, or just natural flow of goods, and whether cross-regional selling will stimulate distributors to manage and invest in their existing markets. Especially for small distributors, if they encounter cross-regional selling in a single point market, senior management rarely pays high attention. However, if there is cross-regional selling in a large area or a trend of such development, it will have a very serious negative impact on market construction and price system, which will inevitably attract the attention of senior management. Once senior management pays attention, the sales personnel below will not dare to operate cross-regional selling. But small distributors often only encounter cross-regional selling in their local market, far from alarming senior management. What should they do?
Unity is strength. Among the distributor groups under a manufacturer, most are small and medium-sized distributors. If a small distributor can unite a group of similar small and medium-sized distributors and jointly raise an issue with senior management, senior management will naturally attach great importance. That is to say, after a small distributor encounters cross-regional selling, they should quickly contact and communicate with other distributors in the manufacturer's distributor group, inform them of the cross-regional selling problem and the resulting losses, and emphasize that this is the consequence of senior management's indulgence of their sales personnel. If it happens to me today, it may happen to you tomorrow. I have already suffered the consequences; there is no need for everyone to experience the same. For safety and prevention, let's jointly report this issue to senior management to ensure everyone's interests are not affected. Imagine if a manufacturer's sales personnel operates cross-regional 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 no one dares not to care about a group of distributors. In most cases, to appease the distributors, senior management will order a strict investigation, seriously deal with the responsible persons, and compensate for the losses. This handling can, on one hand, recover some losses; on the other hand, fundamentally deter other manufacturer's sales personnel. Although it is 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-regional sellers are peers, local or external distributors. Their cross-regional selling behavior is either for greater interests or for revenge. Based on these two points, we can seek solutions.
From cross-regional selling to the realization of interests, there is a necessary link: the crossed-over goods must be sold smoothly. In this process, there are many aspects that can be attacked:
First, do the crossed-over goods have relevant quality inspection procedures? Generally, cross-regional selling rarely has these quality inspection procedures. Even if they do, they are issued by the market management department of the region where the goods came from. Domestic market management departments often do not recognize each other's certificates. Your goods may be proven qualified in other markets, but they may not necessarily be 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-regional selling distributor.
Second, are the accompanying gifts or other items in the crossed-over goods in place? Cross-regional selling generally does not include gifts. If the local small distributor amplifies this information point, it will make it difficult for the cross-regional selling distributor to sell the goods at normal prices.
Third, many manufacturers have different product strategies for different regions. So, are the crossed-over goods produced for other markets? If there are differences in product applicability and grade lower than the genuine products sold in the local market, then the cost-performance ratio is reduced. If this information is spread, it 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 large factories vs. small factories, genuine products vs. substandard products. There will be some differences between goods crossed over from other regions and goods sold locally. These differences are also aspects that can be attacked. For example, spreading methods to distinguish between genuine and substandard products (i.e., the crossed-over products).
Through the above attacks, it will greatly hinder the normal sale of crossed-over goods, making it impossible to realize their value, thus losing the economic significance of cross-regional selling and the confidence to do it again.
There is also a type of cross-regional selling behavior for revenge. Many people can hold a grudge over trivial matters and must find an opportunity to vent, even at the cost of money or interests. If the distributor who was crossed over once offended the cross-regional selling distributor in some occasion and time due to economic or emotional interests, the other party may engage in cross-regional selling to vent their anger or recover something, seeking temporary satisfaction. In this case, hard confrontation is useless; you need to take the initiative to show peace. 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, it should be noted that surface-level goodwill is only one aspect; you also need other means. As an American president said, "Speak softly, but carry a big stick." You also need to prove through examples that you have the ability to counter cross-regional selling, but you just want to handle this matter peacefully and don't want to escalate it.
Of course, the best way to solve problems is prevention. From a preventive perspective, because as long as you are doing business, cross-regional selling will always happen, anytime and anywhere. For the current cross-regional selling problem, if you don't quickly deal with it and create some impact, it will inevitably happen again in the future.
If others cross-sell, you cross-sell too. Use cross-selling against cross-selling. If others cross-sell, it means your purchase price is too high; you should also find a way to get low-priced goods.
Domestic manufacturers actually treat small distributors as their customers. They cannot truly protect the distributor's market; this is the reality. Only by serving your customers well and developing the market to a certain extent will you naturally be protected.
- Investigate the source and gather evidence;
- Report to the manufacturer in a timely manner;
- Report to first- and second-tier distributors to prevent individual behavior of sales personnel;
- Give threats (first- and second-tier distributors are more afraid of cross-regional selling);
- Find ways to strengthen yourself.
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