Many product quality issues are troubling
It is inevitable for product quality problems to occur, but the troubles that arise for distributors come. In addition to affecting sales performance and customer trust, there are two other things that are most headache inducing for distributors:
1) Few companies can compensate for the losses caused by quality issues at the original price, especially for indirect losses caused by credit damage that cannot be compensated.
2) Quality issues lead to consumer disputes. Many small and medium-sized enterprises have small business teams, and in order to facilitate and save time, they entrust consumer disputes to distributors for handling. If the product is selling well and profitable, distributors will do a good job. If the product is not competitive and problems occur frequently, distributors will give up the product soon.
Frequent changes in business personnel result in unfulfilled promises
Many companies have frequent turnover of salespeople due to issues with compensation, development platforms, management, and so on. Especially in companies where salaries are based on performance, salespeople make random promises in order to encourage dealers to purchase more goods. When bonuses are received and customer promises cannot be fulfilled, salespeople choose to leave. However, companies will not fulfill those false promises, and the dealers are the ones who suffer the most.
Shortage of goods is frustrating
Many companies are not good at connecting sales and production, resulting in shortages of some products. It is very frustrating for distributors to find out that they are out of stock after receiving payment. Firstly, the funds cannot be refunded. Secondly, they have to adjust their demand plan in order to ship, resulting in some products exceeding the expected purchase quantity and some products having zero inventory. Thirdly, when delivering to the terminal, the sales performance declines due to incomplete items, but the cost of delivery does not decrease due to incomplete items, resulting in a double reduction in profits.
Long delivery cycle
Many companies suffer from delayed delivery due to complicated shipping processes, long delivery distances, incomplete logistics systems, and issues with company funding operations. If a hot selling product has a long delivery cycle, it will cause extreme disgust among distributors. For example, the payment for a car of product A is 100000 yuan, and the sales cycle is 10 days. The speed of the process from the date of payment to the arrival of the goods at the customer's warehouse has a significant impact on the dealer's revenue.
If the cycle is 2 days, then this customer can basically turn over with only 120000 yuan. If the cycle is 10 days, then the distributor needs to spend at least 200000 yuan to turn over this product, and the profit output is the same, with the output return rate almost doubling.
Sales support is not fixed
Many companies cannot provide their distributors with a complete promotional plan, but only provide a framework for distributors to handle on their own. At the same time, they inform them that the expense reimbursement ratio will be based on the ratio of sales volume to sales tasks. If the achievement rate of a certain task is lower, the expense support will be cancelled. It seems that the enterprise is really suitable in this way. As long as there is sales, there will be profits, and if the task cannot be completed, market expenses can be deducted.
But as a distributor, it is important to avoid the risk of expense expenditure. When they are not confident in reimbursing the expenses from the company, they would rather choose to do less promotion or not do it. Over time, they will eventually be captured by competing products and your market share will be lost. Many products die in this way.
Excessive occupation of dealer fees
Distributors' money is used for profit, not for the enterprise to occupy. In other words, if the distributor's strength is limited and they barely operate your product, if you occupy too much of their expenses at this time, it will lead to passive sales for the distributor. Have the manufacturers you work with encountered these problems before?