In a recent market research, I visited several dealersLocated in the county with a population of less than 800,000, its paper and bathroom cleaning products business has become a 40 million scale of distributors. On the surface, his performance can be described as quite good. However, when talking about his business plan for 2024, his tone was full of helplessness and seemed quite confused. The voice of this dealer can't help but make people reflect, what are the real challenges faced by dealers?
Since October last year, a dealer in the daily chemical industry has felt a significant decline in sales. In the past,He was able to ship 800,000 of a certain brand of products stably every month, but now it is difficult to maintain a monthly sales of 500,000, and the sales volume has almost halved. There are two main reasons behind this shift. First of all, during the epidemic, consumers' hoarding of daily consumables such as paper toilets led to temporary saturation of market demand. Secondly, the impact of e-commerce platforms is becoming more and more severe, and many consumers are turning to online purchases, resulting in a huge impact on offline sales.
The dealer also mentioned that in a small village with a population of less than 700, the daily inbound volume of e-commerce logistics sites can reach more than 100 orders during peak periods. This phenomenon reflects the huge impact of e-commerce on traditional distribution channels. Another dealer told me that even if he continued to expand the market and increase the number of sales points, it was still difficult to increase sales. The diversion effect of online channels has made it extremely difficult to sell in offline stores.
In addition to the decline in sales, dealers are also facing difficulties in collecting payments. In the long-term credit market environment, some stores have delayed payment, which has caused a lot of financial pressure on dealers. Faced with stores that sell a lot of money but are unwilling to settle payments, dealers are often in a weak position and have to compromise to maintain sales. In this case, the arrears of accounts become a major problem.
In addition, some dealers reflectedIn order to pursue performance growth, manufacturers continue to press dealers, ignoring the actual demand and sales capacity of the terminal market. A dealer said that even at the end of the year, in the face of inventory backlog, he had to accept the manufacturer's conditions, hoping to achieve the annual sales target in this way. However, this practice not only did not solve the problem, but instead increased the burden on the dealer.
When it comes to product upgrading, the rapid iteration cycle creates additional challenges for dealers. Some dealers have reported that the current product update speed is too fast, resulting in a large backlog of old packaging products in the warehouse. Manufacturers have also imposed restrictions on the sale of old packaging products, making it more difficult to sell these products.
In addition, the price of the same product in different stores varies greatly, partly because of the existence of circulating goods and fleeing goods. In order to resist this market competition, some dealers have to reach an agreement with the store, resulting in a further compression of the profit margin of the goods.
With so many challenges in the face, dealers are generally taking a cautious approach when considering their business plans for 2024. According to the "2022-2023 China FMCG Dealer Business Status Survey Report".Most dealers' performance last year did not meet the expected targets, and operating income and profit generally declined. In this situation, dealers are thinking more about how to survive in a competitive market than just chasing sales growth.
In the face of various challenges in the industry, dealers' strategies and mentality are also quietly changing. They began to analyze the market more deeply and look for new ways to survive and grow. In the face of the impact of e-commerce, some dealers have begun to try the online and offline integration of the sales model, hoping to enhance their competitiveness by broadening sales channels.
For example, some dealers promote products through social platforms, or cooperate with e-commerce platforms to open *** to attract more consumers. This change, although it may face rising costs and operational complications in the early stage, is an effective strategy to adapt to market changes and expand sales channels in the long run.
At the same time, dealers are actively looking for ways to improve efficiency and reduce costs. In terms of chain management, they try to reduce the backlog by optimizing inventory control, so as to reduce the financial pressure. In addition, through negotiation with the best businessmen, we will seek more reasonable procurement and payment terms to reduce the financial burden. In terms of sales strategy, dealers began to pay more attention to the cooperation with terminal stores, and enhanced the sales momentum of products by providing marketing support and activities.
For brands, feedback from dealers is also very important. Some dealers reflect the market situation and consumer needs through communication with the brand, hoping that the brand can provide more competitive products and strategies. This kind of two-way communication not only helps dealers to better sell products, but also helps brands adjust their marketing strategies to better meet market demand.
However, despite dealers' efforts to find solutions, market uncertainty remains a huge challenge. From international fluctuations to changes in the domestic economy, it may affect consumers' spending ability and willingness to spend. Therefore, dealers also need to take these external factors into account when making plans, and be prepared for risk management and response.
In the process, some dealers began to realize that relying solely on the traditional sales model was no longer sustainable. They are beginning to explore new business models, such as:Transform into a service provider that provides consumers with more personalized and high-quality services. Or,Build closer consumer relationships by engaging in community marketing to increase brand loyalty. These attempts, although full of challenges, have also opened up a new development path for dealers.
In the face of a complex and changeable market environment, dealers are looking for a way out of survival and development through various ways. Whether it is through the integration of online and offline sales models, the optimization of first-chain management, or the close cooperation with brands, or even the exploration of new business models, these efforts reflect the dealers' active response and adaptation to market changes. Although the future is still full of uncertainties, dealers are expected to find their foothold in the highly competitive market through continuous exploration and experimentation.