What Is a Point of Sale Terminal?

The terminal point of sale refers to the place where the product enters the field of consumption and enters the field of consumption. For consumer goods, it is a retail location; for means of production, it is a delivery station. The terminal point of sale is a frontier for enterprises to achieve their own business purposes. The final sale of enterprise products and the ultimate economic benefits are directly related to the selection and operation of the terminal point of sale.

Point of sale

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The terminal point of sale refers to the entry of goods from the field of circulation.

The terminal point of sale refers to the place where the product enters the field of consumption and enters the field of consumption. for

The point of sale is

The density of terminal sales points is directly related to the equilibrium situation of the overall layout of the enterprise market. If the distribution points are too thin, it is not conducive to fully occupying the market; if they are too dense, it may increase sales costs, and the sales efficiency may greatly decrease and intensify Conflicts and contradictions at various points of sale. Therefore, how to maintain the proper distribution of terminal sales points has become the key and central task of density decision-making.

(I) Tasks of density decision of terminal sales points

The basic task of the decision on the density of the terminal point of sale is to determine how many channel members the company uses in the target market to sell products, so as to maximize the efficiency of product distribution. The main basis for evaluating a company's terminal sales point density decision is correct is the market coverage and distribution efficiency of the company's products.

The density of local terminal points of sale with high market coverage is also higher, because if there is not enough market coverage, it will be difficult for production enterprises to achieve their sales goals. Market coverage should be analyzed using market segments. Sometimes, although the overall market coverage of a product is satisfactory, it is not so optimistic if it is aimed at a specific target market.

Distribution efficiency mainly refers to the time and speed of delivery of enterprise products from manufacturers to target customers. A good distribution network should quickly deliver products to consumers, and at the same time, the cost of delivery and management should be as low as possible. If the terminal point-of-sale network established by the enterprise can achieve this goal, it means that its density is moderate. Otherwise, further improvements are needed.

Specifically, the task of the density decision of the terminal point of sale has the following three points:

1. Maintain the balanced development of all terminal sales points of the enterprise.

2. Promote the coordination of the terminal sales points and reduce conflicts between the sales points.

3. Promote the orderly expansion and sustainable development of the enterprise product market. In essence, this requires that when making terminal point of sale density decisions, attention should be paid to the combination of short-term and long-term strategies for enterprise market development.

(B), optional density scheme

Depending on the density of the terminal point of sale, enterprises can adopt different density solutions based on their own and market environment status and changes.

1. Intensive distribution strategy

In intensive distribution, all channel members who meet the manufacturer's minimum credit standards can participate in the distribution of their products or services. Intensive distribution means intense competition among channel members and high product market coverage. Intensive distribution works best for convenience. It drives sales by maximizing consumer convenience. Adopting this strategy is conducive to occupying the market widely, facilitating purchase, and selling products in a timely manner. The disadvantage is that the number of dealers who can provide services in intensive distribution is always limited. Manufacturers sometimes have to evaluate dealer training, distribution support systems, transaction communication networks, etc. in order to find obstacles in time. In a certain market area, competition between dealers will waste sales efforts. As intensive distribution intensifies competition among distributors, their loyalty to manufacturers is reduced, price competition is fierce, and distributors are no longer willing to receive customers reasonably.

2. Choose a distribution strategy

Production companies choose a part of the middlemen in specific markets to promote their products. By adopting this strategy, production enterprises do not have to spend too much energy to contact a large number of middlemen, and it is convenient to establish a good cooperative relationship with middlemen, and they can also obtain appropriate market coverage for production enterprises. Compared with intensive distribution strategy, adopting this strategy has stronger control power and lower cost.

A common problem in selecting a distribution is how to determine the extent to which dealers' regions overlap. The amount of overlap in selective distribution determines how close selective distribution and dense distribution are to a given area. Although the market overlap rate will be convenient for customers to buy, it will also cause some conflicts between retailers. Low overlap will increase dealer loyalty, but also reduce customer convenience. 3.Exclusive distribution strategy

That is, the production enterprise chooses only one middleman to sell its products in a certain area and at a certain time. Exclusive distribution is characterized by a low level of competition. Generally, exclusive distribution is used only when the company wants to establish a long-term and close relationship with the middleman. Because it requires more cooperation and cooperation between enterprises and distributors than any other form of distribution, its success is interdependent. It is more suitable for professional products with high service requirements.

Exclusive distribution allows dealers to take refuge, that is, to avoid the risk of fighting with other competitors.Exclusive distribution can also allow dealers to increase sales expenses and personnel to expand their business without any fear. on. With this strategy, manufacturers can have strong control over the sales prices, promotions, credits and various services of middlemen, and manufacturers engaged in exclusive distribution also hope to obtain strong dealers' sales through this form. sales support.

The shortcomings of exclusive distribution are mainly due to the lack of competition, which weakens the strength of dealers, and is inconvenient for customers. Exclusive distribution makes dealers think that they can dominate customers because they occupy a monopoly position in the market. For customers, exclusive distribution may make them inconvenient in choosing the place of purchase. With exclusive distribution, usually the two parties have to sign an agreement, stipulating that in certain regions and time, distributors may no longer distribute the products of other competitors; manufacturers may not find other middlemen to distribute the products.

(3) Evaluation criteria and methods for selecting a density scheme

The main criteria that an enterprise can refer to when making density decisions are as follows:

Distribution cost

The cost of the network can be divided into two types: one is the investment in developing a distribution network; the other is the cost of maintaining the network. Similar to production costs, the investment in the development of a distribution network can be viewed as a fixed cost, while the cost of maintenance can be considered a liquidity cost. Both constitute the total cost of the distribution network. Obviously, when choosing a density solution, we cannot blindly make decisions without considering costs. We must not only control the overall level of product sales costs, but also form a mechanism to continuously reduce costs by improving distribution efficiency.

2. Market coverage

Except for those companies that are just starting out in the market, it is impossible for companies in the period of growth, expansion and maturity to ignore the market coverage of their products at any time. It can be said that coverage is always the core factor that must be considered when making enterprise density decisions, because it is related to the survival and development of the enterprise. That is to say, when designing a distribution network, it is not enough to consider only reducing the cost of the distribution network. The pursuit of reducing the cost of the distribution network may lead to a decline in sales volume, and the appropriate increase in the cost of the distribution network may also promote a greater increase in sales volume. Therefore, under certain conditions, in order to increase sales and market coverage, companies may even increase costs to achieve their sales goals. This is because each specific distribution network is always targeted at a specific target market. Increasing market coverage means that the sales ability of a distribution network is increased, which means that the space for product survival and development of the company is increased, which is conducive to the realization of the company's long-term strategic goals.

3. Control ability

An important criterion for the correct decision of the enterprise's terminal point-of-sale density is the enterprise's ultimate ability to control the expanding distribution network. In fact, quite a number of companies are declining due to their out-of-control of the terminal point of sale. The consequences of such out-of-control will not only reduce the distribution efficiency of the enterprise, but may also destroy the entire product market. In short, whether to choose exclusive distribution or selective distribution requires enterprises to have good control over the distribution network. ^[1]