FMCG is a highly competitive industry with significant product homogenization. For many new distributors entering this field, the first question is 'Which product should I distribute?' Choice matters more than effort. Once a distributor selects the right product, sales and profits follow; conversely, choosing the wrong product not only makes work difficult but may also lead to huge losses. Based on my professional experience, I offer four suggestions for distributors planning to take on products or enter the industry, as follows:

  1. Does the product have a large market capacity? If a product belongs to a niche category with a small overall market capacity, I suggest distributors not take it on for now. For example, if the national capacity is only 200-300 million, each city gets only a few hundred thousand, and at the county and township level it's even less. Such products are not worth distributing. If a product has a large market capacity, such as dairy products with a national capacity exceeding 100 billion, even an ordinary county can achieve tens of millions. Only by persisting with such products can distributors develop.
  2. Does the product have differentiated selling points? When selecting products, we must also consider what differentiated selling points the product has. Only with selling points can we have a story to tell. If the product we distribute is the same as other brands, both terminal retailers and consumers will have a first-impression bias, affecting product sell-through. Moreover, homogenized products will inevitably lead to price wars. So we must distribute products that others don't have, with significant differentiation. Recently, I served a company with a clearly differentiated product: lotus leaf water, which adds lotus leaf extract to purified water. A manufacturer in Shandong makes it, and I think the differentiation is quite significant. Due to advertising concerns, I won't elaborate here.
  3. Is the gross margin above 20%? After discussing the product, the most critical factor is the profit margin. If a product doesn't have a gross margin of at least 20% between the factory price and the terminal supply price, I suggest distributors not take it on. The purpose of distributing products is to make money. Because if you proceed, you will definitely lose money. Why? Nowadays, distributors' operating costs are very high: personnel wages, transportation costs, customer relationship expenses, taxes, office and warehouse rental fees, etc. These account for almost 10% or more. So if a product doesn't have a 20% gross margin, it's not worth distributing.
  4. Does the company have concrete measures to jointly develop the market? Whether the company has concrete measures to jointly develop the market depends not only on what is stated in the recruitment poster, such as advertising and personnel support, but also on what we distributors must carefully examine when signing the distribution agreement. Specific support includes the following: 1. Can products be returned or exchanged? 2. Is there support for barcode fees and display fees? 3. Is there support for promotional materials? 4. Is there support for sales personnel? 5. Is there support for offline promotional activities? These are the most basic supports, and some can even be written into the contract. Many distributors have advanced expenses and then the company doesn't reimburse them, causing losses. So we must thoroughly understand the company's support and strength, and whether they truly have the willingness to develop the market. Therefore, I believe that as long as distributor friends filter through the above four points, good products will definitely come into view. Hu Wei, from Jiujiang, now lives in Beijing. He graduated from Nanjing University of Finance and Economics. He is a practical FMCG marketing expert with 15 years of experience in the FMCG industry. He has held positions including Product Director at Huiyuan Juice Group, General Manager of Guangdong Region, Marketing Director at Hunan Taizinai Group, Marketing Director of Northern Region, Marketing General Manager at Jiangxi Gaozheng Group, and Vice President of Marketing at Duoduo Runer Company. He specializes in differentiated marketing for food and beverages, channel incentives, and breaking into regional markets. -END- Excerpt from 'Terminal Visit Sales General Model' September 10, 2015 20:00--21:00 Scan the QR code below to register now, 9.9 yuan per class.