Click to read the original text for details. On May 17, in Anshan, Liaoning, the author attended a management training class organized by a local distributor, where the boss and general manager served as trainers, attracting nearly 400 attendees, many of whom were FMCG distributors from Sichuan, Guangdong, Jiangsu, and other places. Why did a distributor boss have such appeal to attract so many people? With curiosity and doubt, during the meeting break, New Distribution interviewed this distributor—Ms. Xu Min, founder of Anshan Hongye Hengda Trading Company. As a finance professional, she started her business with a loan of 20,000 yuan and has now grown to fixed assets over 100 million. How did she do it? What innovative management concepts and methods made the audience marvel? Borrowed 20,000 yuan to start business, now assets over 100 million Anshan Hongye Hengda Trading Co., Ltd. primarily deals with the Yihai Kerry Group's Arawana brand, including rice, flour, and oil categories. To date, Hongye Hengda has 20,000 square meters of standardized warehouses, 5,000 square meters of office buildings, 18,000 terminal outlets, 200 employees, and 5 branch companies. Founded in 1996, founder Xu Min told New Distribution, "Before starting my business, I worked at a state-owned vegetable company, doing finance for 5 years, then as a business manager for another 5 years, in charge of condiments. At that time, I was constrained by limited income and had to resign to start my own business." Xu Min recalled that she borrowed 20,000 yuan, rented a warehouse, and bought a telephone (which cost nearly 4,000 yuan at the time), leaving little of the 20,000 yuan. Fortunately, the manufacturer resources she had accumulated at the vegetable company allowed her to buy on credit and pay later, and through this 'flipping' business, she completed her initial capital accumulation. By 2002, Xu Min had netted 2 million yuan, and then bought 10 acres of land, officially naming the company Hongye Hengda Trading Company, and successively became an agent for brands such as Lee Kum Kee, Haitian, Hengshun, Nestlé, and Linghua. After 6 years of market expansion, in 2008, Hongye Hengda's sales exceeded 100 million yuan, with current assets reaching 20 million. Although sales exceeded 100 million, the good times did not last. Xu Min told New Distribution, "Exceeding 100 million in business is a hurdle. Before reaching 100 million, I followed the business every day, did market management, communicated market policies, but now the scale is getting bigger, and my energy is limited. From 2008 to 2012, the company went downhill, with negative growth year after year." Facing the bottleneck period of exceeding 100 million, Xu Min invited her upstream manufacturer partner, Li Feng, former national KA sales director of Linghua MSG, to join. In terms of division of labor, Xu Min leveraged her financial and management experience to focus on internal governance and company strategy; Li Feng served as the 'sales forward' for market expansion and sales management. After a period of adjustment, Hongye Hengda's revenue began to grow strongly and achieved its set goals. Through clear division of labor, Xu Min spent more time learning and studying internal governance. In her view, if salespeople cannot be managed efficiently, distributors cannot have profits. Xu Min mentioned, "Let's not talk about business skills for now. If salespeople cannot stand on the same side as the company, and every day they think about how to help terminal store owners and together with terminals ask the company for policies and resources, that would be terrible. If this problem is not fundamentally solved, Hongye Hengda cannot become strong and big, and cannot achieve profit breakthroughs." To this end, Xu Min designed a compensation plan through exploration and practice. To make employees not only do their jobs well but also do more good things, she innovated an internal 'points-based management' method. Managing 3 1%s brings 29% profit growth Once a trading company passes the entrepreneurial stage from 0 to 1, and sales reach the tens of millions level, distributors, besides maintaining existing customer relationships, almost have no more time and energy to run the market store by store. At this time, salespeople become the core and most important people in the trading company. But salespeople are not bosses. How to make salespeople have a boss mindset, or be willing to work proactively, is a 'heart disease' for every distributor. Although giving more money can solve the problem, how to give it? Give too much, the company doesn't make money; give too little, salespeople are unwilling to work. Xu Min told New Distribution, The key to solving the problem is to make salespeople stand on the same side as the boss! Whether it's the level of sales, the level of selling price, the amount of expenses, or whether terminals have credit periods and the length of credit periods, these things must not only be related to the distributor but also to the salespeople. How to make it related? Establish a dividend reward system for sales business! According to Xu Min, dividend rewards for sales personnel account for 40% of total compensation. Therefore, salespeople pay special attention to dividend rewards. To increase dividends for salespeople, Xu Min proposed the theory of 'managing 3 1%s brings 29% profit growth.' What are the three 1%s specifically? Assume standard dividend: Sales revenue - cost = 1 million (gross profit) - (cost + expenses) 900,000 (terminal support expenses and interest on arrears), other income 100,000 (manufacturer investment expenses), multiplied by 10%, then the standard dividend is 20,000 yuan.

  1. If the unit selling price increases by 1%, 1.01 million - 900,000 + 100,000, multiplied by 10% = 21,000 (dividend)
  2. If the sales volume increases by 1%, 1.02 million - 900,000 + 100,000, multiplied by 10% = 22,000 (dividend)
  3. If market expenses decrease by 10%, 1.02 million - 800,000 + 100,000, multiplied by 10% = 32,000 (dividend) According to Xu Min, "Previously, we begged employees to work; if they did more, they could earn more. But now that we have proposed the 1% concept, salespeople start begging the department manager, 'How exactly should I do it?'" When all expenses, including interest on receivables, display fees, promoters, contract rebates, and inventory differences, and even miscellaneous expenses in terminal stores, are related to employee income, after deep binding, what was originally the boss's business becomes the employee's business! Partial business rewards for January-February 2019 In Xu Min's understanding, if a boss wants to expand the business, he must always think about how to help employees increase their income. When the benefit distribution mechanism is properly designed, allowing capable employees to have high incomes, making some people rich, and having benchmarks, it will naturally drive other salespeople, and then the business can be done better and bigger! Zero cost investment, using points to manage employees If dividends are an incentive for sales personnel at the sales level, hoping to make employees stand on the same side as the company to increase revenue, then points-based management is the company's recognition of employees, giving them a sense of honor at work. Think about it: every distributor has had the experience of praising subordinates for doing well, but 'praising for doing well' is immediate and even repetitive. When praised too much, it loses value; when praised too little, employees' enthusiasm cannot be mobilized in time. Based on these considerations, Xu Min innovated a 'praise by points' quantitative management method. In short, it is to quantitatively assess people's abilities and comprehensive performance through reward points and deduction points, and use software to record and use them permanently. The core purpose is to give play to employees' subjective initiative and make excellent employees 'not suffer losses.' For example, if a non-sales person, due to personal resources, closes a group purchase deal, reward 200 points; office personnel who proactively receive visiting customers, reward 10 points; for new employee mentoring, the mentor rewards 1,000 points; even performing a program at the annual meeting rewards 100 points, etc. What can points be used for? I believe many trading companies have the tradition of giving benefits during holidays. How do regular companies distribute? Either equally, by seniority, or by position level, but in fact, no matter which form, it is difficult to be fair and just. For example, when completing a manufacturer's quarterly task, the manufacturer gives a free trip to Thailand. Who is more suitable for this quota? The fairest way: whoever does more and does better gets it! Match corresponding rewards based on the number of points. Ultimately, these points can be used for: travel, gift exchange, red envelopes, salary increases, external learning, and various honors. Xu Min emphasized that our ultimate goal is to make employees understand that every contribution they make to the company will be rewarded, and every effort they make will be recognized by the company. Summary As a finance professional, Xu Min firmly believes that only numbers are the fairest. If employees do well, the company can do well, but how to judge whether employees are good or bad? Through quantitative numerical indicators and corresponding incentive settings, employees can truly develop together with the company. Returning to the business model, in New Distribution's view, whether it is dividend rewards or points-based management, in addition to management logic, digital tools must be used. We often talk about refined operations and intensive cultivation. The core foundation is to use data to help enterprises make operational decisions. Only with business data, cost data, and expense data can we, in the complex operations, unravel the details and make operations more transparent, fair, reasonable, and efficient. Xu Min told New Distribution, "Before adjusting the compensation plan, it was often the boss who invited employees to dinner, and sometimes employees reluctantly attended out of face. But now, employees invite me to dinner (those with a monthly salary over 10,000 invite the boss), and they even have to queue. During the meal, employees say, 'Thank you, boss, for providing such a platform that allows me to earn so much...'"