---
title: "With Only 2 Months to Spring Festival and Raw Material Prices Soaring, Distributors Should Stock Up Now—But Calculate Exactly How Much Before Acting!"
description: "As the 2018 Spring Festival approaches, distributors face not applause but a chorus of price increases: raw materials, logistics, and product prices are all rising, causing panic. Yet the 8000-billion-yuan festival market and tempting ordering policies are hard to resist. Distributors must stay calm, resist temptation, see trends clearly, choose reliable companies, understand policies, and ensure after-sales support—avoid falling for traps and think carefully before ordering."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-12-11"
language: "en"
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# With Only 2 Months to Spring Festival and Raw Material Prices Soaring, Distributors Should Stock Up Now—But Calculate Exactly How Much Before Acting!

> As the 2018 Spring Festival approaches, distributors face not applause but a chorus of price increases: raw materials, logistics, and product prices are all rising, causing panic. Yet the 8000-billion-yuan festival market and tempting ordering policies are hard to resist. Distributors must stay calm, resist temptation, see trends clearly, choose reliable companies, understand policies, and ensure after-sales support—avoid falling for traps and think carefully before ordering.

As the 2018 Spring Festival approaches, as a distributor:
What we first face is not applause but a chorus of "increases": raw material prices up! Logistics costs up! Product prices up! The panic of "rising," the anxiety of "rising"!
But facing the 800-billion-yuan Spring Festival market cake! Facing various tempting ordering meeting policies, ordering policies, and low-priced products! How can one resist?
However, we must remind ourselves to stay calm and resist temptation! See trends clearly, choose companies wisely, understand policies, and ensure after-sales support! Don't be fooled; think clearly before acting!
Today, the editor will analyze how to avoid the pitfalls of blind ordering and how to prepare Spring Festival stock methodically, to fight a well-prepared Spring Festival marketing battle!

**Manufacturers' Unpredictable Stock-Pushing Tactics**

**Tactic 1: Direct Pressure**
For certain strong brand companies, with many channels and methods, they don't rely solely on distributors to sell goods, and they won't "pamper" distributors like some small factories. Failed to meet sales targets? Poor performance? Sorry, but you must take this batch of goods; how you sell it is your problem. If you don't take it, our factory will take corresponding punitive measures, such as downgrading your distribution level or canceling your distribution rights—this is not a scare.

**Tactic 2: Playing the Emotional Card**
The manufacturer's salesperson or sales manager directly interfaces with distributors. After many dealings, there is always some personal connection, especially since there is a mutual benefit. The salesperson uses this relationship to demand that distributors stock up to help complete sales tasks. Many distributors, out of face, help out even if it means bearing more pressure.

**Tactic 3: Temptation with Benefits**
Pressure or emotional appeals can cause some distributors to feel resentment and resistance, which manufacturers prefer to avoid. A more effective method is to lure with benefits. After all, driven by interests, distributors can not only bear pressure but also generate motivation. However, for many experienced distributors, the year-end does not necessarily mean peak season; large stockpiles can easily lead to inventory accumulation, slowing cash flow and increasing financial pressure. Moreover, stockpiling can disrupt the existing balance of market operations, leading to business uncertainties. Therefore, when facing manufacturers' temptations, they often hesitate: How to choose? Should they take the stock?

**Case Analysis: Manufacturers' Luring Tactics**

**First Tactic: Rebates**
**Case:**
"Old Wang, if you just take another 3 million yuan of goods this month, you'll reach 15 million in sales this year, and you'll immediately get a 3% rebate!" A salesperson, Xiao Li, from a company said to his client Old Wang in a highly persuasive tone. Old Wang was already calculating: his basic annual task was 12 million, and he had already taken 12 million in the first 11 months. Based on normal monthly sales, he could take about another 1 million this month, ensuring he would complete 13 million in sales this year. At that rate, he would only get a 2.5% basic rebate. But if he remitted an extra 2 million this month (total 3 million), he would immediately get an additional 1500×0.03 - 1300×0.025 = 125,000 yuan in rebates.
Old Wang couldn't resist the temptation and took 3 million worth of goods. As a result, the extra 2 million couldn't be sold and all sat in his warehouse.
At year-end, manufacturers typically calculate sales rebates. Many use tiered rebate policies to stimulate purchases: the more you buy, the higher the rebate percentage. Rebates are used to push you toward new targets.
But rebates are ultimately just a reward mechanism, and the benefits can be directly quantified. When facing rebate temptations, you need to be sensitive to numbers. List all relevant data, calculate and analyze comprehensively, and don't just look at surface numbers. Market operations should consider the overall and long-term picture; don't be shortsighted, causing cash flow and inventory pressure.

**Second Tactic: Advertising Support**
**Case:**
A liquor manufacturer promised distributor Boss Li that if he took 1.2 million yuan of goods at year-end, they would immediately provide 100,000 yuan in TV advertising support. Li's average monthly sales of this brand were only about 300,000 yuan, but due to the peak season, he estimated he could sell about 700,000 yuan in the last month. Taking 1.2 million at once meant an extra 500,000 yuan in inventory risk. But seeing the 100,000 yuan advertising support, Li gained confidence and immediately paid for the goods.
The manufacturer did air the ads, but the effect was not as expected; final sales that month were only 800,000 yuan, leaving Li with an extra 400,000 yuan in inventory.
Why? Simply put, based on past advertising effectiveness, sales could increase significantly. But with Spring Festival approaching, competitors increased their ad spending, and leading brands bombarded the airwaves, drowning out Li's 100,000 yuan TV ads with no visible impact. So, the lack of obvious results was inevitable.

**Third Tactic: Purchase Incentives**
**Case:**
Boss Yu had been distributing a certain brand of biscuits for years and knew the manufacturer's market tactics well. He knew they would launch a big promotion at year-end, so from mid-October, he barely ordered any goods, selling off almost all his inventory. Sure enough, in December, the manufacturer launched a "buy 5 get 1 free" promotion on about 10 products, tempting distributors to stock up. Many distributors were eager but felt powerless with full warehouses. Yu, however, without hesitation, took 800,000 yuan worth of goods and made a tidy profit.
At year-end, to boost sales, manufacturers often increase channel promotions, directly offering extra incentives like buy-more-get-more, direct rebates, lower discounts, or price cuts.
In such cases, you should base your ordering on market capacity, product seasonality, and sales power. Seize the manufacturer's promotion patterns and dynamics, prepare early, and, if funds allow, absorb as much as the market can digest.

**Fourth Tactic: "Pies" and Other Temptations**
Besides the above, there are other attractive temptations like expanded distribution rights, expanded business scope, additional personnel support, training, and other policy benefits. We categorize them all together. Temptations are good; they don't come every day. Don't be indifferent; face them positively. But the general principle is: analyze carefully, seize opportunities, do your best, watch for traps, and don't stock dead inventory.

**2018 Spring Festival Stocking Strategy**

**Strategy 1: Sales Period Analysis**
Sales order: Manufacturer → General Distributor → Secondary Distributor → Retail Terminal
February 15 is New Year's Eve; most companies will start holidays around the 14th. Five days before that is around February 9. Consumers will have bought their New Year goods by then, so February 9-14 is basically dead. Therefore, January 20 to February 8, these 20 days, are when consumers nationwide frantically buy New Year goods. To maximize sales, retail channels must not run out of stock during these 20 days. Retailers' upstream may be secondary distributors or directly the general distributor. So, these 20 days are when the general distributor in a county or prefecture-level city continuously pushes goods from their warehouse to terminals; otherwise, they can only watch others make money! This stage is the busiest 20 days for general distributor → secondary distributor → retail terminal, not the phase when manufacturers ship to general distributors. Of course, nearby provinces may have 1-3 shipments in February, but for distant markets, if you deliver after February, will you leave time for terminal retail?
So, from January 20-29, the general distributor has 10 days to complete downstream distribution; January 30 to February 8, retail terminals can sell big. Leaving buffer time allows some terminals to reorder multiple times. **Therefore, from January 1 to January 20, 2017, is the period when general distributors should ship and stock up in large quantities.**

**Strategy 2: Raw Material Stocking Analysis**
Every year, to prepare for the Spring Festival peak season, manufacturers start bulk raw material stocking around December 5. However, there are often shortages from some raw material suppliers because market changes are unpredictable. Each raw material supplier has upstream suppliers, and each link's holidays, worker numbers, order volumes, etc., directly affect raw material availability.
Especially this year, due to market mechanisms and environmental regulations, prices of cartons, beverage bottles, sugar, etc., have risen. The increase in raw material prices is a heavy blow to suppliers and manufacturers this year, increasing production supply instability. **Particularly for food and liquor manufacturers, the pressure is huge this year; they may raise prices, and some companies have already issued price increase notices as early as December:**

**Strategy 3: Rational Stocking Plan Analysis**
So, besides considering the above factors, how much should a distributor stock to avoid overstocking (causing accumulation) or understocking (causing shortages and losing sales)?
There is no fixed formula, but many distributors use the 1.5 times safety stock rule commonly used in the FMCG industry. Here are the steps:
- Actual sales in the previous period = previous inventory + previous purchases - current inventory.
- Customer's safety stock should be ≥ actual sales in the previous visit cycle (to ensure no stockouts or overstock, typically set at 1.5 times the actual sales in a visit cycle).
- Customer's purchase quantity = safety stock - current inventory. That is: reasonable purchase quantity = [(previous inventory + previous purchases) - current inventory] × 1.5 - current inventory.
But the 1.5 times rule is more suitable for regular sales cycles; for festival markets, it should be used flexibly. Factors to consider:
1. **Quantity calculation:** Festivals differ from normal times; during festival sales cycles, stock should be at least 2-3 times the normal amount to avoid stockouts.
2. **Warehousing and logistics:** Besides expanding storage capacity, distributors can use a "direct train" approach, shipping products directly from the manufacturer's warehouse to downstream distributors' warehouses, providing one-stop service. This effectively transfers the stocking burden from the distributor to the sub-distributors.
3. **Reverse stocking method:** Use the 1.5 times safety stock as a base to measure downstream distributors or core terminals. Add up all their safety stock; the total is essentially your festival stocking quantity. This traceable method is more reasonable and accurate for festival stocking, but it requires the distributor to have a thorough understanding of downstream channels, especially distributors, and be familiar with their sales cycles and volumes.
4. **Festival sales growth rate calculation:** Refer to historical festival market growth indices to estimate current market stocking. For example, if last year's sales were 1 million units and the festival sales growth rate is 30%, then this year's stocking should be at least 1.3 million units. Why "at least"? Because it should also consider industry growth, market growth, etc.

**Time is money; stock up early and don't fight an unprepared battle!**

**We also wish all distributors a prosperous start to 2018!**

Source: Compiled by New Distribution
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