Once we understand whether distributors actually have money and the specific reasons behind their complaints of poverty, we can avoid detours and regretful actions. For example, we won't be frustrated by facing the same old problem with a new distributor after dismissing the original one, nor will we sink deeper into passivity by repeatedly indulging a distributor who cries poverty. Of course, all this requires us to correctly identify our distributors and then take appropriate actions. Below, we will discuss targeted strategies for each of the aforementioned types of distributors who cry poverty.
For the first type of distributor, we should no longer consider whether they have money or whether to agree to credit sales, but rather accelerate our preparation of new distributors to take over the market. During this process, we might also show extra care for the original distributor, helping his company and family in ways that don't entangle us in disputes. This can enhance our "charm index" in the channel and yield corresponding returns.
For the second and third types of distributors who cry poverty while hoarding money, what more is there to say? Refuse them. However, we may need to employ some strategies and technical means. For example, within the original pricing system, set a credit price for distributors; higher procurement costs mean thinner margins, which may deter them from asking for credit. Another approach: while stating the company's stance against credit sales, offer to work together to help them overcome their "cash flow crunch"—for instance, connect them with a neighboring distributor who can purchase more goods or transfer some inventory to them (the crying distributor's interests may be partially eaten by the transferring distributor). This way, we show our care and support while prompting them to find funds elsewhere. There are many similar methods. However, if the distributor's complaints are also influenced by direct competitors adjusting their policies, we may need to report this to the company to seek compensation in areas other than credit sales to stabilize our channel system. This requires comprehensive judgment based on factors like our product's competitive position in the market.
For the fourth type of distributor with genuinely tight working capital, if they can overcome the crisis in a short time, and if they have a good credit history, a sound channel system, strong sales capability, a significant position in your regional market, and if your product is their main push, and they have potential for support, then you may need to work with them to solve the problem of insufficient funds for purchasing. But where are the solutions? For example: seek relevant policies from the company; help the distributor analyze the root causes of cash flow issues and propose ways to accelerate cash flow and activate funds; increase collaborative sales support to help reduce inventory and speed up accounts receivable collection; help them "bridge" with other distributors to increase channels for solving cash flow problems, etc.
For the fifth type of distributor who lacks confidence in the product, we must do our utmost to hold the line on credit sales. Some methods should be used well: First, we must have full confidence in our product, not only by conducting comparative analysis with peers but also by horizontally comparing our product with those currently held by the distributor and their friends. Second, our policies on initial stock and payment terms may not be as flexible as competitors', but we must not lose to them in actively serving distributors and assisting sales. Third, assist distributors in fully utilizing existing market support resources. Fourth, besides helping distributors make money, we should communicate more, making them feel our care and attention, and how we protect their interests, boosting their confidence.
For the sixth type of distributor, their complaints of poverty are often closely related to poor sales of our product in the local market. Therefore, we first need to identify the reasons for poor sales to solve how to boost sales and speed up inventory turnover. This may require us to look for reasons within ourselves and devote greater effort to helping distributors make money. If the distributor cries poverty due to a competitor's countermeasures, we should identify our competitor and analyze the possibility of keeping the distributor in our camp. If hopeless, we should consider how to collect outstanding payments and develop new distributors.
When facing the seventh type of distributor who cries poverty, I suggest you slap yourself first, then turn to your distributor and say: "Do what you can with what you have. The company has decided to develop another distributor in this market to work with you." Of course, such direct words may not suit us who need to maintain corporate and personal image and channel loyalty. But I must remind you that there is often a natural conflict between weak distributors and the sales targets the company gives us. If this distributor cannot even equip basic sales personnel and does not treat our product as a main push, it's better to replace them sooner rather than later.
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