In today’s business environment, the distribution system has become an important means for enterprises to expand the market and reduce customer acquisition costs. Whether it is traditional retail or emerging e-commerce, an efficient and incentive distribution system can bring significant performance growth to enterprises. This article will introduce in detail the core elements of the distribution system from the perspective of product design,
In daily life, we participate in the distribution chain almost every day – whether it is shopping in the supermarket, placing an order in a group or following a blogger to “plant grass”, the essence is the process of efficiently reaching the demand of goods through different paths. Recently, I happened to be doing the needs of the distribution system, and this article will explain the knowledge related to distribution for you from the perspective of products, I hope it will be helpful to you
1. Explanation of terms
● Distributors: Customers who can help drive product sales
● Consumer: The person who buys and ends up using the product
● Direct promotion: The downline directly promoted by the distributor is the primary distributor
● Interference: The downline promoted by the primary distributor under the distributor is the secondary distributor
● Profit sharing/commission: a certain percentage of the commission brought by attracting new and subordinate distributors.
2. The concept of distribution
1. Basic definition
Distribution refers to the process by which an enterprise transmits products or services from producers to consumers through intermediaries or self-built channels.
2. Participants
Starting point : Producer (manufacturer)
Endpoint: consumer or user
Intermediate link: intermediaries (such as wholesalers, retailers), agents (do not own the ownership of goods)
3. Essence
The essence of distribution is to build a system that drives users to explore their connections at a deeper level.
What does a product manager need to do?
In the process of a product from scratch, it is not easy to do a good job in the role of product manager, in addition to the well-known writing requirements, writing requirements, writing requirements, there are many things to do. The product manager is not what you think, but will only ask you for trouble, make a request:
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In this process, distributors directly or indirectly continue to create value for the platform, and optimize the efficiency of commodity circulation through division of labor and collaboration.
Every user is a potential advertising body, and every distributor is a communication body.
● For users, due to the credit communication of distributors, they have a certain degree of trust in the platform and media.
● For distributors, get generous enough distribution commissions through the distribution policies provided by the platform.
● For the platform, it allows users to form a closed loop of self-growth, reducing customer acquisition costs while gaining more accurate users.
4. Key
The core goal of distribution is to achieve a double breakthrough in user growth (new recruitment) and product sales (sales) through the fission mechanism
(1) Attract new people
Attracting new people is the starting point, lowering the threshold for participation through short-term incentives, and using the trust of acquaintances to reduce customer acquisition costs
(1) Attracting new people can obtain separate user reward fees, which has the advantage of making users actively attract new users for the platform, but the disadvantage is that it is easy to fall into the cycle of infinite “pulls”, and it is also easy to breed wool parties.
(2) If you do not receive a fee for new recruitment, you can become the distributor’s downline, and the downline will consume on the platform, and the distributor will receive a certain percentage of commission according to its level.
(2) Selling goods
Selling goods is the end: increase distributor motivation through commission stratification and product strategy to form a sustainable closed loop of sales.
3. Distribution model
1. Chain 2+1
Chain 2+1 is a social fission marketing model based on secondary distribution, also known as the “chain detonation promotion model”, its core logic is that A recommends B, B recommends C, as long as this recommendation chain is activated and generates a transaction, both A and B can get commissions.
To put it simply, it is to bind three characters through a recommendation chain to stimulate the compound motivation of “recommendation + bringing people” to the greatest extent. Peculiarity:
● Strong social attributes: suitable for dissemination in circles of friends, WeChat groups, and social media;
● The incentive chain effect is obvious: each level can receive rewards, promoting users to actively form a promotion chain;
● Suitable for explosive product promotion or event drainage, with quick short-term results
2. Push 3 to 1
Push three to one is a promotional strategy based on “recommendation and return”.
The most common form is: A shares the product link, and after successfully referring 3 people to place an order, A can get free qualification or cashback for the product.
Peculiarity:
● Explosive products: concentrate on detonating a commodity and drive a sharp increase in sales;
● Easy user participation: just share the link, no complicated operations;
● Clear rebate logic: recommendation = reward, easy for users to understand and disseminate
3. Team partner
Team partners are a kind of distribution logic of “group leadership”, users can not only earn direct promotion commissions, but also receive team rewards from the recruited subordinate partners.
This model emphasizes the role of “team leader”, guiding users to actively develop the team and continue to operate. Peculiarity:
● Long-term income type: more suitable for building a stable distribution team and agency system;
● Clear hierarchy: clear promotion and rebate system to enhance user stickiness;
● Sustainable operation: suitable for operation in conjunction with the member growth system and points system
4. Regional partner model
According to the performance of salespeople, the authority of different regional agents is assigned, and the product areas under their jurisdiction are assigned according to the actual situation, so that the salespeople in this area become regional partners;
Salespeople who become regional partners have a certain percentage of product profit rewards.
Usually use the delivery address to divide different regional agents, and the salesperson becomes a regional partner after being promoted, and all orders with the delivery address within the region belong to the salesperson can get the regional partner commission.
5. Store manager mode
The platform operator selects a certain percentage of product profits to reward the promoters with outstanding performance on the platform (such as store managers, etc.), and evaluates the corresponding store manager level according to the performance of the promoters, and distributes the performance dividends of their teams
6. Membership model and hierarchical gradient
On the basis of the original “member”, the salesperson at each level is further divided into multiple levels, so the salesperson level is subdivided into multiple roles of “N*N”, and the salesperson is rewarded with the corresponding level ratio
7. Monthly sales gradient reward model
For different store manager teams to complete different sales, the profit sharing commission allocated is also different, and the monthly sales of the team reach a certain gradient, and the store manager will be rewarded with the sales ratio of the corresponding gradient team
4. Distribution threshold
Distribution qualifications can be divided into application type, purchase type type, platform entry type, and free membership type
1. Application type
Relevant information needs to be submitted, reviewed by the platform/merchant, and you can become a distributor/member after passing
2. Purchase and join type
You need to purchase general/customized products, how many quantities, and how much to pay according to the platform/merchant rules to become a distributor/employee.
3. Platform settlement type
This is usually aimed at SaaS platforms, entering the platform as a subordinate merchant, purchasing a high version to obtain the qualification to open recruitment and promotion.
4. Free to join
That is, if the platform/merchant opens recruitment and opens the invitation qualification at the same time, it can be invited to become an agent/member through other agents/members.
5. Traffic-based threshold
Some platforms need distributors with a certain amount of traffic, so they need users with a certain amount of traffic to become distributors and filter out some “fishing” distributors, so when applying, users will be required to upload evidence that can prove their traffic, such as WeChat friend screenshots, WeChat community screenshots, etc., and the background operation staff will verify and then approve.
5. Distribution invitation method
1. Poster
Fixed poster images or multiple sets of editable poster templates (supporting custom copywriting, QR code, distributor avatars), users can generate exclusive posters with one click
2. Short link + mini program card
Generate short links (such as t.cn/XXX) to lower the threshold for user copying, and embed mini program cards to achieve closed-loop jumping
6. Distributor promotion mechanism
Like the membership system, the distribution system also needs to set a reasonable promotion mechanism in the system to gradually strengthen the role of distributors in the distribution system. Such as primary distributors, intermediate distributors, and senior distributors
When designing the promotion mechanism, it is necessary to consider the classification and promotion conditions, as well as the rights and interests of the ranks
1. For the classification and promotion conditions, there are generally the following types
(1) Reach a certain consumption amount
(2) Reach a certain number of team members
(3) Reach a certain number of team members and there must be X senior distributors in the team
(4) Reach a certain consumption amount & a certain number of team members
2. Class rights and interests generally include:
Commissions, level markings, customized marketing materials, exclusive customer service channels, participation in brand strategy meetings, offline event invitation qualifications, etc
7. Reward mechanism
1. Diversified rewards
(1) Cashback
Withdraw directly to WeChat change (1 ≥yuan for a single transaction, and the handling fee will be borne by the platform).
(2) Points system
Invite 1 person to get 100 points, and the points can be exchanged for goods or deducted orders (1 point = 0.1 yuan).
(3) Privilege rewards
Distributors above the gold medal enjoy exclusive customer service and priority participation in internal testing activities
2. Combination of short-term and long-term incentives
(1) Novice mission
For the first time, one person was invited to get 5 yuan in cash, lowering the threshold for participation.
(2) Ladder tasks
Invite 10 people to an additional 50 yuan, and 50 people to 200 yuan + diamond level
3. Distribution commission
Distribution system commissions include distribution system commissions, self-purchase/sales commissions, management commissions, invitation commissions, platform dividends, etc.
(1) Distribution system commission
The total commission paid by the platform/merchant after the sale of a certain product;
Usually, when setting the distribution ratio, there are several factors: the commission for all products by default, the commission for individual products, and different commission ratios for different distributor levels.
Follow the following priorities: Single-product commission rate > tier commission rate > default commission rate.
(2) Self-purchase/sales commission (first-level profit sharing)
Commissions incurred by distributors directly selling/purchasing a product
(3) Management commission (secondary profit sharing)
The commission that a directly recruited distributor (downline) can get after purchasing/selling a certain product;
(4) Invitation commission
In order to promote promotion and team building, the platform/merchant sets up the first order reward commission such as invitation to register, recruitment and downline sales/purchase;
(5) Platform dividends
For premium distributors, the platform/merchant will give dividends in the form of partners.
4. Commission settlement
(1) Automatic settlement
The standard distribution system supports the automatic settlement function of commissions, such as: after the order is confirmed and received, the commission is automatically calculated;
(2) Withdrawal threshold
After reaching the withdrawal threshold (such as 50 yuan or 100 yuan), the distributor can apply for withdrawal;
(3) Withdrawal cycle/handling fee
You can set the withdrawal cycle (e.g. 7 days/15 days) and the withdrawal fee.
(4) Review and withdraw
Manual review of withdrawals is also a must-have feature for many merchants – preventing the risk of abnormal withdrawals and improving financial security
8. Distribution relationship chain
1. Fixed relationship chain
Distributors establish a fixed relationship between superiors and subordinates, subordinates generate trading orders, and superiors can receive rewards
2. Non-fixed relationship chain
There is no superior-subordinate relationship between distributors, and if there is no corresponding customer binding relationship, the commission will be determined according to whose link the user buys through (the profit sharing method is similar to the first-level distribution).
If there is a customer binding relationship, the commission sharing will be determined according to the binding relationship
9. Distribution validity period and protection period
When a consumer clicks on Distributor A’s promotion link, the consumer makes a purchase in the store within a period of time, and Distributor A can receive a commission, which is valid for this period.
The protection period means that during the protection period, the distributor establishes a binding relationship with the customer, and the binding relationship will not be changed during the protection period
