Rebate, How Can We Get Better?

Why do manufacturers want to rebate their distribution customers?

Is it because other manufacturers are rebate, and should they go with the stream?

What kind of purpose should the manufacturer achieve for the dealer's rebate?

Why do we pay a lot of rebates to our customers, or can we not mobilize the sales enthusiasm of our customers?

Even the phenomenon of frequent fleeing and unlawful price often happens.

Can those indicators be used as rebates in addition to profits from customers' sales?

In addition to returning cash to customers, what else can be returned?

I believe these are the practical problems that plague many manufacturers when formulating and implementing rebate policies.

Then, how should we do the rebate work to achieve the expected effect of the manufacturer, and make it more beneficial?

Let's start with the rebate case of a pharmaceutical company below.

Case study: a rebate policy of a pharmaceutical company in Beijing

In analyzing the sales agreement between a pharmaceutical company in Beijing (hereinafter referred to as "A pharmaceutical company") and distributors, the author found that his rebate practice has some reference significance. In order to facilitate readers to fully understand, we now quote some of the original texts:

First, the sales progress rebate policy:

1, as long as the dealer completes 25% of the annual sales task in each quarter, the policy can be enjoyed.

2, the progress rebates of different varieties were implemented in different proportions, and the progress rebate points of Zhongjing Wei Ling Wan, "Bao Yi Tie Ling" and "Zhen Ju Jiangya tablets" were 1.5%, 1% and 0.5% respectively.

3, the progress rebate will be realized at the end of the first month of the next quarter, and the rebate will be arranged in the form of arranging distributors and salesmen to go sightseeing.

Two, annual gross rebate policy:

1, after the total sales volume of each year is completed, the dealer will enjoy the rebate according to the unified standard regardless of the size of the dealer. "Zhongjing Wei Ling pills" is in accordance with 2%, "baby one sticker" according to 1.5%, "Zhen Ju Jiangya tablets" according to the 1% standard.

2, rebates are paid by A pharmaceutical companies to dealers in the form of cash at the end of the first month of the second sales year.

Three, timely return money rebate policy:

1, each batch of timely settlement of the dealer, enjoy the monthly payment of the total amount of 0.5% of the timely refund of rebates; 180 consecutive days without receivables dealers, enjoy 180 days of the total amount of 1% of the rebate rebate; the annual accounts receivable dealers, in addition to the two above, and enjoy the annual sales volume 0.5% of the rebate rebate;

2, the above rebate is a cumulative rebate, the dealer can enjoy it repeatedly; however, if a default occurs, the refund of all rebates will be cancelled.

3, the amount of rebate should be used as an input fee for the organization to participate in the advanced learning training class.

Four, product monopoly rebate policy:

1, in similar products (such as Shanghai's Lei Yun's "Zhen Ju Jiangya tablets", Hubei Dahua's "baby wears a spirit" and Shenzhen Zhonglian's "Zhongjing Wei Ling tablets"), if the distributor voluntarily sells only three corresponding products of A pharmaceutical enterprises, it can enjoy the rebate policy.

2, the rebate will be sold in the second sales year in the form of purchase price discount; dealers will operate other similar products halfway, and the rebate item will be automatically cancelled.

3, the standard of monopoly rebate: "Zhongjing Wei Ling pill" 1.5%; "baby one sticker" 1%; "Zhen Ju Jiangya tablets" 0.5%;

Five, the new product promotion rebate policy:

1, for example, A pharmaceutical enterprises have other new varieties to go public, cooperate with close distributors (organize new product promotion promotion meetings, carry out the promotion and maintenance work quickly) according to the requirements, in addition to enjoying the above four conventional rebates, they will enjoy an additional 3% of the sales rebate of new products.

2, the new product promotion rebate at the end of the year settlement, at the end of the first month of the second sales year, in the form of equal value truck, computer and other forms of return;

Six, rebate execution instructions: the above rebate policy is a cumulative rebate, to achieve the standard of each item can be enjoyed; once the dealer has broken the price, cross regional sales behavior, all rebates will be automatically canceled.

The basic purpose of rebate

From the case materials of A pharmaceutical enterprises, we can see that their rebate policies are divided into five parts: sales progress rebate policy, annual gross rebate policy, timely return rebate policy, product monopoly rebate policy and new product promotion rebate policy.

So why should A pharmaceutical companies design rebate policy projects like this?

I think it is easy to see the corresponding purpose through these rebate projects.

1, to achieve the goal of promoting the stage.

The "progress rebate" of A pharmaceutical enterprises is to facilitate distributors to complete quarterly sales tasks on time. This is conducive to market development in the early stage of fast distribution, channel coverage and distribution network construction, which helps to reduce the annual big target to zero and enhance the confidence of distributors in achieving their annual goals.

2, in order to enhance the overall sales volume or sales volume.

Encourage and stimulate distributors to sell more products, and maximize sales of products, so as to enhance the overall sales volume or sales volume of products is the main purpose of rebate.

This is also the fundamental reason why rebates are always linked to sales volume or sales volume (dealers enjoy a higher proportion of rebates as sales or sales increase).

For example, the annual rebate of A pharmaceutical companies is the affirmation and reward for dealers' annual sales work on the basis of progress rebates.

3, to accelerate the return of money for the purpose.

The rebate is directly linked to the speed of refund, for example, the 3 timely rebates made by A pharmaceutical companies according to the length of the time spent on repayment are to promote the rapid withdrawal of company funds and prevent the funds from being occupied by dealers. This is an effective means to ensure the safety of the loan.

4, in order to standardize the sales behavior of distributors.

This is a form of controlling market function through rebate.

In addition to being linked to sales or sales, rebates will also be combined with market management objectives such as excluding competitors, increasing market share, maintaining prices and protecting areas.

For example, the monopoly rebate of A pharmaceutical enterprises is particularly offensive to competitors' similar products, and it is a bait to guide dealers to crowd out products.

5, the promotion of brand image for the purpose.

For example, the A company donated the dealer's van to the printing of the "A pharmacy serial products delivery special vehicle" and so on. It will undoubtedly show the strength of the enterprise and establish a good image of the enterprise.

Diversified forms of rebate

In order to implement the above five rebate policies and achieve the corresponding purpose of each policy, A pharmaceutical companies have also adopted various forms of rebate.

Then, what are the different functions of different rebate forms?

1. Cash form: manufacturers directly pay cash rebates that dealers deserve.

This is the most primitive and simplest form of rebate.

This form is easy to operate and easy to manage for manufacturers.

However, the cash pressure of manufacturers is increasing, and the follow-up control ability of channel members is lacking.

2, the form of Discount: rebate is not paid to the distributor in cash, but allows the dealer to enjoy a discount in the next delivery.

Manufacturers mainly reduce their cash pressure through this mode.

At the same time, in the dealer's rebate pull on the formation of a closely linked situation, do not enter the next batch of goods will not be able to get the rebate.

3, physical form: the manufacturer pays the rebate of the distributor in equal value.

For example, the distribution of vehicles and computers to distributors can increase distributors' distribution and promotion capabilities and business management capabilities.

4, the form of market publicity and training: use rebate funds as distributors' training costs and local distributors' advertising expenses.

To do some practical things for dealers, such as marketing activities, advertising campaigns, helping dealers expand their impact on fast sales, enhance the business capacity and management level of distributors, and lay a solid foundation for expanding sales volume.

It can be said that the money is used on the knife edge.

5, the form of social activities.

Such as sightseeing, tourism, get-together and so on, alleviate the pressure of manufacturers, create opportunities, enhance communication and deepen feelings, and help to weaken interests and harmonizing the relationship between manufacturers.

Other notices of rebate

In addition to the clear return purposes and different forms of return, the A pharmaceutical companies are more skillful in the arrangement of the rebate cycle, the design of the rebate projects, the emphasis of the rebate and the grade differentiation of the rebate points.

1, flexibly formulate the calculation cycle of rebate.

The rebate cycle of A pharmaceutical enterprises is divided into monthly, quarterly, semiannual and annual. This helps to achieve the goal of phasing, and finds out the inadequacies of the dealers in the process of cooperation, so as to clarify the breach of the rectification work.

2, according to the needs of process management, design rebate projects.

Sales volume is no longer the only assessment index of rebate, for example, A pharmaceutical companies set up sales rebate projects, but also set up rebate policies such as progress rebates, rebate rebates, special sales rebates, new product promotion rebates and other rebate policies.

Through the management of distributors' sales process, rebate really becomes a means to control and regulate the market.

3, adjust the focus of rebate according to different marketing stages.

Because the three main varieties of A pharmaceutical enterprises are in different stages of marketing: Zhongjing Wei Ling pill as a new product listing promotion; "baby one sticker" as the two popularity of the market coverage; "Zhen Ju Jiangya tablets" as a general drug focus on sales promotion again, so the three rebate strength is completely different.

4, formulate reasonable rebate points to ensure that rebates are seductive.

"Zhongjing Wei Ling pill" has a cumulative rebate ratio of up to 7%; the cumulative rebate of "baby one sticker" is 5.5%; the rebate of "Zhen Ju Jiangya tablets" is the lowest, also 4%, which is still quite attractive for dealers with low gross profit margins, and only in this way can it be difficult to arouse the enthusiasm of dealers.

Two functions of rebate

To sum up, we can say that rebate is not an end, but a means, through means of diversification, to achieve the goal of service.

The basic function of rebate is to encourage dealers' sales confidence and control sales behavior.

1, incentive function.

When the distributor sells the products of the manufacturer, the manufacturer has set aside a certain profit margin for the dealer in a certain proportion of the price difference according to the pricing principle of the corresponding channel level. With this difference space, the distributor has a profit guarantee for the distribution of products.

Rebate should be considered as an additional profit income for dealers, so it can enhance the enthusiasm of dealers and stimulate and stimulate the role of distributors in selling more products.

2, control function.

However, it is not easy for a distributor to get the "extra money", especially a high percentage of rebates.

Because manufacturers will require dealers to comply with certain rules of the game: in addition to the sales volume or sales volume requirements, dealers are usually asked that dealers should not have any illegal activities such as fleeing, random prices, dragging payment of goods, selling competitive products, otherwise, they will deduct or even cancel the relevant rebates.

Therefore, when formulating a rebate policy, any manufacturer should focus on these two basic functions to determine exactly what rebate items they need to set up and what form of rebate should be adopted.

In other words, if a rebate policy fails to achieve these two functions for manufacturers, we can say that such a rebate policy is ineffective or even negative effect, that is, the more unfavorable the more.