FMCG distributors in the end how to live

In China, FMCG distributors as long as you want to pan for gold in the circulation area, the future is mainly three functional forms:

1, distributors: regional oligarchs to eat, in order to function through the "addition" or "subtraction" profit; this will be less and less, and only belong to a small number of people with "monopoly" ability. This person will be less and less, and only belongs to a small number of people with "monopoly" ability, because the traditional distribution of space and opportunity must be with the "distribution space" (sales space + information asymmetry space) is reduced and shrinkage.

100% of the dealers in the hands of the network as their own bargaining chips, but can not be presented to the manufacturers of real. When dealers are afraid and unable to make the network information and business relationship clear to the manufacturer, the manufacturer allocates the target volume according to the self market purpose. The target volume in the region is the only indicator of the dealer. Distribution of products or stock is the dealer's biggest capital at the moment. Once the enterprise is no longer the volume as the key requirements of the time, the market management of the first constraints on the object is the distributor, the interests of the distributor is the first to be trampled on.

Usually, under the big distributors, there are many dealers who operate terminals with a volume of 1-2 million. These dealers are rapidly eating into the market space of large distributors, like a noose to their originally developed distribution network confined. But these small and medium-sized terminal professional business because of the limited strength, always in the development of the situation of insufficient power, monopoly of a suburb of the dealer has not yet appeared. As of now, the power of capital for these dealers is a very key force, this key force is always in a short-board state, resulting in a considerable part of the dealers in the reality of the green and yellow.

Dealers can do sales work with five major content: development, distribution, settlement, promotion and service. But ultimately depends on the actual results, so efficiency is the biggest requirement of all enterprises to dealers. The foundation of the dealer's survival comes from two elements: space and efficiency. The shortest possible time to complete the requirements of high-quality enterprises, which requires such characteristics - the characteristics of the sales space is broad, decentralized, independent; information space is closed, fuzzy, variable. In the same space, the requirements of the dealer in the cost, time, labor for the enterprise to do subtraction, and in the quality, speed, service requirements to the enterprise to do addition. Can not meet the requirements of the enterprise naturally will not have the next opportunity to cooperate.

Doing distributors, the requirements out of the local area, in a considerable regional scope to do one or two, so that you can achieve a monopoly, in order to be able to quickly form the scale of the brand effect, so that the manufacturers in a short period of time will not dare to have a deposed to the actual move, so as to win the time for the accumulation of capital.

2, suppliers: peer or downstream as the object of the transaction, through the right to speak with the upper reaches of the reciprocity to be able to obtain the best-selling varieties, thus evolving into a supplier; the biggest difference between the supplier and distributor - distributors are mainly through the continued relatively fixed categories of distribution profits; suppliers are mainly short-term transaction spreads and are therefore more like traders.

In fact, in the process of Yingang Consulting's visit to certain cities and urban neighborhoods, it was found that many distributors of a certain size, such as those who have reached several hundred million dollars in size, are coming out of the traditional form of distribution of products. With considerable asset strength, they are no longer held hostage to the manufacturer's products, so they can get additional product selection and underwriting power outside the general sales process of the manufacturer, the bottom price operation has become its main source of profit.

Relying on the mode of operation of the bottom price can be obtained at the same time a variety of products to choose and the power of underwriting, so that the attraction of the downstream will be able to go beyond the manufacturer: product than the manufacturer's rich, flexible pricing system than the manufacturer, the supply form and very flexible. Relative to manufacturers, they may also get a different length of time the billing period, invariably increase the downstream small and medium-sized dealers in the speed of capital turnover and the ability to fundamentally improve the circulation of the generally very low capital margins. Good cash turnover and relatively high capital margins for the downstream development of terminal network resources to provide adequate protection. This is based on the consumer segment of the product or brand with the principle of small and medium-sized terminal professionals need a solution, do not have to go at the same time to play a number of manufacturers of the "three companions"; and on the downstream, because of the good state of funds, so the backbone of the hard up: to give it, who is afraid of who ah. When the supply of products, whether the number of varieties or brand prices than the general level of advantage, the terminal is naturally happy to be incorporated.

Even in Shanghai and other such commercially developed urban areas, this is a temporary form of basic uncontrollable cooperation.

3, buyers: downstream network and customers are numerous and stable, the primary stage, through the scale of procurement and upstream visitor sentiment to obtain a premium, to meet the needs of the downstream; advanced stage, upstream and downstream two-way joint or even integration.

Unlike suppliers, buyers are not simply for low-discount products. Purchasing body can be molded itself already shows that the control of the downstream network has been very strong, and even has some capital management design in it. The fact that the purchased products can be distributed is actually not very far from the operational management of a general enterprise.

The buyer model is a consortium in the early stage of the form, the later development may reach the form of the group's joint-stock companies, in some developed regions are still only in the joint experimental stage. This requires considerable bonding process, and even quite a lot will end in failure. The key to this mode of operation is in the break-in period, that is, joint purchasing when how to realize the excess of business, as well as the overall strategic purpose is accepted by the group. The product is important, but simply relying on the product itself still can't really achieve the depth of integration of interests, because it may be faced with very different business models and business habits, so it can only rely on professional knowledge and a clear analysis of the facts to guide everyone step by step towards *** the same profitability of the road.

Taiwan's Lianqiang International launched its own brand after integrating the agent industry and becoming the industry leader itself. In the future, the purchaser becomes a kind of brand operator. Dealers to do private labeling need to deal with the tripartite relationship between consumers, commissioned manufacturers, and the dealers themselves.

Jinlufu's success is certainly related to its capital and communication strategy in place, but behind the relationship between manufacturers, product positioning, price differences, promotional operations, etc. have done a lot of communication and coordination work. Own brand can be done, but can not be made into a high gross profit, zero net profit "chicken ribs".

When this model is successful, with the Japanese trading company similar functions and management capabilities of Chinese-style business groups, trading companies will appear. By that time, enterprises will only become part-time workers of the trading company.

4. Summarize: industry drivers and the impact on other industries

The above three development models each have a different way of allocating resources, but also means a different way out of the industry, which today does not see its own future direction, will soon disappear. The survival of any social industry must have its own irreplaceable value, so as to maintain a strong and sustainable survival and competitiveness.

Traditional FMCG wholesalers must increase their efforts to provide value-added services to manufacturers or retailers in order to remain competitive in the market. For China's distributors, the golden age has passed, the industry is in chaos when profits are high, the industry standardized, profits are gone. Therefore, low profit margins will drive the industry for quite a long time to come. Wholesalers, on the other hand, need to center their business around service and information. Several related factors include:

1) multiple competition across channels: including the rise of self-wholesaling, including the manufacturers of the market business behavior and the ability of large wholesalers to cover, directly to the terminal is an inevitable trend, which has reached more than 80% in the United States;

2) cost-cutting, wholesalers are always looking to improve the efficiency of the supply chain management, and constantly replacing the new product It is becoming less and less cost-effective;

3) Associated labor costs, including the costs associated with managing human resources, training workers and providing benefits, as well as finding and retaining qualified workers;

4) Adoption of new technologies. Currently, dealers don't need information technology alone, but rather a comprehensive solution for their operations. If they simply promote new information technology, they will not achieve much because dealers will have to consider the considerable costs of implementing the new technology and related processes.

From FMCG.com: http://www.ksxfp.org/sales/dealer/475.html