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FMCG Manufacturers and Distributors Have Long Suffered from Hypermarkets! This Is Not Cooperation, It's Robbery
After delivering goods worth hundreds of thousands to a hypermarket for a year without receiving a cent, a distributor received a reconciliation letter at year-end stating that after deducting the payment, they still owed the hypermarket tens of thousands in fees. This sounds unbelievable but is real, leaving distributors having worked hard for a year only to end up in debt. Hypermarkets are now exiting the market, and many are applauding.
金名Traditional Distributors' Sales Cliff-Like Decline: 80% of the Blame Lies with Manufacturers
At a major FMCG manufacturer's performance review meeting for distributors from January to April, over 40% of distributors saw year-on-year sales declines, with the figure exceeding 50% for traditional channel distributors. The primary causes include overstocking, shifting business focus, and competitive pressure, but the root cause often lies with manufacturers who must proactively reform.
金名Manufacturers Seeking Growth Cannot Do Without Distributors!
A beer distributor worries about being bypassed as manufacturers experiment with direct supply to chains. However, distributors will not disappear; manufacturers need competitive distributors to win market share, and those who adapt will thrive.
金名Manufacturers Want Scale, Distributors Want Profit: This Game Needs a New Strategy
A beverage distributor complains that tasks increase yearly while profits shrink, making the business unsustainable. Manufacturers set ever-higher sales targets, pressuring distributors to stock up, often leading to losses. Distributors must adapt by setting bottom lines, negotiating for support, identifying growth sources, and refining terminal operations to survive the manufacturer-distributor game.
金名Distributors: Grab Share, Grab Terminals, Don't Get Left Behind!
At a manufacturer's meeting, a business manager said, 'Local consumers have a special attachment to competing products and only buy them.' The leader retorted, 'If that's the case, we might as well give up on this market.' The reality is that consumer loyalty is not as high as we think. If they only buy competitors' products, it's because your competitive strategy is flawed. Strategically, companies should avoid homogeneous competition, create new categories, and pursue differentiation, especially for SMEs.
金名The Manufacturer-Dealer Cooperation Model Based on Forcing Inventory Has Reached Its End!
Dealers are increasingly frustrated with manufacturers' practices of forcing inventory and shifting risks, leading to broken trust and unhealthy relationships. To improve, manufacturers must shift from a 'pushing' model to an 'empowering' one, focusing on protecting dealer profits, co-creating value, and establishing equal communication platforms.
金名Don't Blame All Market Problems on Frontline Sales Staff
When sales performance is poor, many managers resort to replacing frontline staff, but this often fails to address the root causes. Systemic issues such as product strategy, pricing, and channel shifts cannot be solved by changing personnel; instead, empowering and supporting the sales team is the key to success.
金名The Faster You Distribute, the Faster You Die: It's Time to Upgrade Your Sell-Through Strategy!
During dealer visits, we often hear complaints: "Products reach the terminal, promotions are launched, but they just don't sell." In the past, products displayed in supermarkets with large displays and eye-catching promotions attracted consumers. Now, even with aggressive promotions, sell-through is poor, even for products from major manufacturers. Often, the product isn't the issue; competitors sell well. A key reason is the wrong operational sequence: building awareness before purchase is crucial.
金名Office Workers Transitioning to Sales: A Narrow Escape
A former FMCG colleague lamented that their company dissolved the operations department, forcing remaining staff into sales roles. Once comfortable office workers now face intense pressure as the industry struggles, with many fearing sudden layoffs and being pushed into sales positions they are ill-prepared for.
金名More New Products, Thinner Distributor Margins
New products are increasingly becoming a tool for squeezing distributors, as manufacturers cut promotional support and shift the burden of promotion and sell-through onto distributors, eroding their profits. To succeed, new products must offer differentiated value and be supported by sustained market penetration and consumer education.
金名Half the Difficulty in Business Is Caused by Office Staff
At a meeting, functional departments discussed how to push work forward, proposing stricter assessments for salespeople. Companies are imposing more and heavier assessments on frontline sales, making it harder for them to earn money even when they meet targets. Salespeople are increasingly burdened with endless forms, complex evaluations, meetings, and rules, leading to the sentiment that salespeople suffer under office staff.
金名Manufacturers Have Started Cutting Clients—Where Do Traditional Distributors Go From Here?
Recently, news that a company cut distributors with annual sales below 3 million yuan sent shockwaves through the FMCG industry. While some understand and others worry, distributors mostly complain. In the current stock competition, not just XXHa but almost all major FMCG manufacturers are proactively seeking change. Through communication with multiple manufacturer personnel, the author learned about changes in manufacturer distributor strategies.
金名Manufacturers' Terminal Promotion Positions Are Disappearing
Terminal promotion positions at FMCG companies are being eliminated or downsized as digital tools and skilled sales reps take over their functions. Companies are shifting from crude, resource-heavy promotions to precise, systematic, and value-creating activities that better align with market and consumer needs.
金名Big Brands Can't Find Distributors, While Small Brands Quietly Take Market Share
A regional manager from a major FMCG company lamented that low entry barriers have allowed third- and fourth-tier brands to erode sales of leading brands, leading to sluggish growth in dairy, beer, and beverages. The rise of regional small brands has exacerbated the challenges for big brands, which are losing ground in both distribution and promotion.
金名“I'm an old hand born in the 1980s, still struggling in the FMCG sea of bitterness”
Lao Wang is truly a veteran in the FMCG industry, having joined right after graduation and now with 16 years of experience. "Lao Wang, your performance is lagging. What's going on? Can you still do this?" Just exiled to a remote market, Lao Wang was publicly questioned by his leader at the monthly meeting for poor performance. "I don't want your excuses; I want results. If you don't catch up next month, you can leave on your own," the leader said impatiently. This is a common tactic in the FMCG industry to force old employees to resign voluntarily: assigning them to remote markets, markets without customers, or markets where predecessors left big problems...
金名Why Do “Better” Products from Brand Owners Fail to Sell?
Despite claims of superior quality and differentiation, many products fail to win consumers. The core issue is that differentiation is often done from the company's perspective, not the consumer's, leading to products that are perceived as homogeneous or irrelevant.
金名In the FMCG Industry, the Answers to Market Problems Are on the Frontline
A beer distributor with over 20 years of experience shared his journey, emphasizing that market opportunities and solutions are found on the frontline. By staying close to the market, he successfully launched a new product, but later lost momentum after delegating to managers. The article argues that true insights come from direct market engagement, citing examples like Wahaha and Feihe, and concludes that adapting to new cycles requires rebuilding frontline connections.
金名The More Distributors Strive, the Worse the Results
In the past two years, FMCG industry growth has slowed, but the variety of products displayed at retail terminals has increased. During a recent market survey, a brand was found to have placed over 10 products in one store (normally 3-5), and when asked if they could sell, the owner seemed indifferent, saying unsold items would be exchanged. This reflects a common issue where distributors' efforts are not yielding expected results.
金名Dealer Exits: 80% Are Caused by Manufacturers
“We spent the money, but the manufacturer said it couldn't be reimbursed. We faced various inspections and fines, worked hard all year, and still lost money,” complained a former dealer of a major manufacturer. Over the past year, I visited many dealers who gave up their brand agency rights, and most exits were caused by the manufacturers. Manufacturer policies are not tailored to local conditions, and a slight change can severely impact dealers in weak markets, even fatally.
金名“I'm a manufacturer's sales rep, and during the Dragon Boat Festival, I'm still doing promotions...”
During the Dragon Boat Festival, while others share family reunions on social media, I remain on the front lines. Setting up a tent at the supermarket entrance early in the morning, I sweat and shout through a megaphone... By noon, the sun is scorching and the crowd is sparse; in the evening, as it cools down, consumers pass by without being attracted by the 'buy one get one free' offer. Today's consumers seem more rational, caring about their immediate needs rather than being swayed by price. After a whole day, I sold less than 800 yuan...
金名In the FMCG Industry, "Making Fewer Mistakes" Is Growth
Despite a sluggish market, manufacturers still aim for annual growth, leading managers to resort to desperate measures. The key lies in seizing opportunities in channels, products, and distributors, focusing resources, and capitalizing on competitors' mistakes.
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