Market competition is intensifying day by day, and the entire fastener industry has entered a real era of small profits, but downstream daily expenses, personnel, warehousing and other expenses have increased year by year, and today’s fastener dealers are more and more difficult.

However, in the daily complex work, dealers will encounter various difficulties in operation and management. This article classifies and summarizes the problems commonly encountered by these fastener dealers, and gives some business suggestions, hoping to be helpful to the business guidance of all dealers.

01 Business direction: Do you want to be a product expert or a channel expert?

This question touches on a topic of positioning. How can dealers make full use of their resource advantages and turn them into competitive advantages.

Every fastener dealer is suffering from the backlog of the market and the competition of peers. There is a game of interests with fastener manufacturers, with peers, with retail terminals, and with distributors. In each round of the game, the dealer is torturing how many cards you have in your hand to get you the final victory. This requires dealers to establish their own regional advantages in the industry.

There are two basic ways for dealers to gain advantages in the industry: one is to become a professional household and product expert in a certain industry. The second is to specialize in a certain type of channel. Such as specializing in factory channels, specializing in supermarket channels or specializing in distribution channels. Make a class of channels special and thoroughly, form your own channel advantages, and become a channel expert.

02 Enterprise development wins by profit or by quantity?

Many small-scale fastener dealers have a profound experience: “best-selling models do not make money, and profitable models do not sell well”. There are very few products that make money and sell well.

This is caused by market competition and the rapid turnover of products.

This makes many dealers divided into two schools: one is the products with gross profit margins below 10%, which I do not do. The other category is the products I distribute, which only earn 5 points. Do not earn more.

The attitudes of these two sects are diametrically opposite, but each has its own reasons.

The idea of the first type of dealers is: “No profit, no early”. What do the unprofitable tasteless products do? The gross profit rate is less than 10%, and then deducting storage and transportation, labor, loss, profit and tax, etc., is a porter.

The second type of dealer’s idea is: “small profits sell well”. Small profits but big profits.
Distributors will ask: is the development of the enterprise to win by profit or by quantity. I think dealers must maintain a suitable operating profit basis and increase the volume.

03 Management structure How to change the management of family business?

The first generation of fastener dealers mostly originated from the family business model. The male lead is outside, the female lead is inside, the sister-in-law is in charge of finance, and the old husband is in charge of the warehouse.

This family-based management model plays an important role in the start-up and development stages of an enterprise. The synergy reflected by the family-oriented management has allowed the first generation of fastener dealers to complete the original accumulation. However, with the development and expansion of the scale of enterprises, the disadvantages of family-based enterprises are exposed.

The internal management system of the first enterprise is in name only, and the contradictions within the family directly affect the development of the enterprise. The suppression of the second talent. There are two major tribes among the employees of the company. One is the special class who have kinship with the boss, and the other is the ordinary employees who are not relatives but not related. The battle between these two tribes will lead to the loss of the main personnel. A third-family business can cause conflicts of interest. When the company started, it was still able to work together. When the scale is large, there will inevitably be conflicts between relatives for the sake of interests.

If fastener dealers want to make their enterprises bigger and stronger, they must change too many family management models. Transition to institutionalized and systematic management mode. 04How to establish an effective performance appraisal mechanism for personnel management?

Many fastener dealers’ assessment of business personnel is relatively simple. Generally, the model of basic work plus sales commission is adopted.

This mode is relatively simple and extensive. In the actual operation process, the following three problems will be encountered:

First, what is the product that sells well, the salesperson will sell what. Not conducive to the promotion of new products.
Second, product sales enter the off-season stage, which will lead to the inertia of business personnel and even the loss of excellent personnel.
3. Business personnel with strong ability will work alone after resignation. Added competitors.

It should be said: Most of the fastener dealers who are not on the scale have limited wages, and it is difficult to recruit excellent talents. Most of the business personnel employed by them are trained first-hand.

The old salesmen who have been doing it for a long time have mastered the company’s customer resources. Once the loss has a great impact on many dealers. Under this circumstance, it is particularly important to establish an effective performance appraisal and management system.

05 How does inventory management deal with unreasonable pressure from fastener manufacturers?

The business personnel of the brand manufacturers are to complete the monthly sales targets, or the manufacturers are to accelerate the return of funds. Unreasonable pressure warehouses are often required by fastener dealers. It adds operational risks to dealers and affects the normal return of corporate funds.

Brand manufacturers forcibly suppress goods from dealers, mainly in the following ways:

One is Li-induced. How much the dealer will pay back at one time, the company will give a few more points of rebate.

The second is the threat of opening other dealers. If the sales volume of the dealers this month fails to meet the company’s target, new dealers will be added.

The third is to create a lofty market prospect. Tell the dealer how the company will increase its advertising investment this month and how to increase its promotion efforts. Induce dealers to press the goods.
When the dealer refuses the unreasonable pressure of the screw manufacturer, he should not only fight on the grounds, but also avoid conflicts with the fastener manufacturer. Try to resolve it as gently as possible. When dealing with these kinds of problems, it is the best policy to be cool and smooth.  

06 How does customer management build its own distribution channels?

If a dealer wants to obtain the agency right in a certain region, it must establish its own distribution channel system in this region. In establishing distribution channels, dealers also have a diametrically opposite approach.

Do not distributors, set up their own offices in the county market. Of course, this method is faster and more powerful. But the first mode is to lengthen the management line and capital chain and increase business risks. Second, operating costs increased and profitability weakened. When the dealer’s management ability and scale strength have not reached this level, the author suggests not to adopt this model.

So how do fastener distributors establish their own distribution channels?

One is to establish a distribution alliance with distributors. Appropriate rebates based on annual sales.

Second, is to establish a return system. Swap out the distributor’s slow-moving model.

3. Regularly visit distributor customers to communicate emotions.

Fourth, it is to strengthen the work guidance for distributors.

5. Establish reserve customers of distributors. Timely exchange of unqualified and disloyal distributors.

07 How can resource management strive for the largest cost support from fastener supplier?

Fastener dealers become stronger and bigger, and it is inseparable from the support of manufacturers. Manufacturers support and cooperate with each other in order to open up the market situation and achieve a win-win situation for both parties.

There are three major misunderstandings of dealers’ support for manufacturers:
One, I don’t need support, as long as the manufacturer gives me a bare price to operate. Save both parties arguing. This model is often accepted by small manufacturers. Such products are often short-term products and have no future.

Second, the bigger the support, the better. Fastener Manufacturers have strong market support, which means that Fastener manufacturers have high hopes. The short-term profit of the manufacturer, if the desired goal is not achieved, the manufacturer will often give up the market. Therefore, the market input cost of manufacturers is not higher.

Third, the cost invested by the Fastener manufacturer is my due interest. Savings are profits. So try to deduct as much as possible and make false claims. Because there are three misunderstandings, it is very difficult for dealers to obtain the support of the manufacturer. Or it is difficult to obtain the maximum support within a reasonable range.

How can dealers strive for the greatest support from Fastener factory?

First, convince the fastener manufacturer to list the market under your jurisdiction as the key market of the fastener manufacturer. The higher the fastener manufacturer pays attention to the market, the greater the proportion of market investment.

2. After confirming the market operation plan with the fastener manufacturer’s sales management, fully cooperate. The higher your degree of cooperation, the greater the support from the manufacturer.

3. Transparency of market input costs. Try to spend all the expenses to the bright place, so that the fastener manufacturer can see the effect. Fourth, increase your investment appropriately. In exchange for their own small investment in exchange for a larger investment from the manufacturer. 

08 How does money management control accounts receivable?

In the course of operation of fastener dealers, accounts receivable will inevitably occur.

Many dealers like the cash and spot business model. Although the profit is thin, the money they make in their own hands is real. But now the competition in the industry is becoming more and more fierce, and it is difficult to achieve full cash on hand. Especially for terminal dealers, the number of accounts receivable is quite large.

How can fastener dealers control accounts receivable? A few points should be noted:
1. For customers who cannot realize cash and spot, approval procedures must be established. The application is submitted by the business personnel and reported to the boss for approval. Not approved, no credit is allowed.

2. For customers with accounts receivable, the credit line needs to be determined. If the amount exceeds the limit and the payment cannot be recovered, the supply shall be stopped and the reason shall be found out.

3. Review the receivables once a week. For those receivables that are due, determine the collection period.

4. Dealers with a large amount of receivables need to set up special personnel to manage the receivables. Every receivable is real money. Improper management of receivables will directly cause losses to the company, and will also allow the bad elements of the company to take advantage of the loopholes. Therefore, the management of receivables is an important part of dealer management.

09 How can profit analysis maximize profits?

The products operated by fastener dealers have large and small sales and high or low profits. Dealers should be differentiated and reasonably matched in the business process. Products with high sales are often less profitable. Large amount of funds. To properly control the sales volume. Products with small sales volume are often more profitable. should be the focus of promotion. Some products with small sales volume, low profit and no future will be resolutely eliminated.

Dealers should also learn to analyze the profit of the products they operate every year, and determine their investment direction according to the profit contribution rate of each product. Appropriately update the product structure of its own operation every year to make the product structure more rational. Maximize profits.