Score a China distributor every quarter on eight KPIs: sell-out, weeks of cover, store coverage, price discipline, payment days, marketing spend, reporting and team. Give each one a target band and a weight. A sales target alone pays the distributor for loading stock, and you find out a year later.
Sources quoted here were checked November 7, 2026.
Plenty of foreign brands sign a Chinese distributor with one number in the contract, the annual purchase target. The distributor hits it and the brand’s export team books the sales. The cartons are somebody else’s problem until the reorders stop.
That’s how a channel fills up. The difference between what a distributor buys and what shoppers buy is covered in sell-in vs sell-out with a Chinese distributor, along with how to count weeks of cover. This page is the scoring sheet that sits on top of it. Print the quarterly China distributor scorecard and bring it to the review.
The eight China distributor KPIs, with bands and weights
The weights below are our recommended starting point. They add up to 100. Move them to fit your category, but agree them in writing before the quarter starts. Distributors dispute weights they first hear about at the review.
| KPI | Target band (full points) | Half points | Weight (%) |
|---|---|---|---|
| Sell-out | 90% or more of the quarterly sell-out plan | 75% to 89% | 25 |
| Weeks of cover | Your replenishment lead time plus up to four weeks | Up to four weeks outside the band | 15 |
| Store coverage | 90% or more of agreed outlets sold at least once | 75% to 89% | 15 |
| Price discipline | No stock traced to an unapproved channel; promotions only from the agreed calendar | One breach, stopped within 14 days of notice | 10 |
| Payment days | Every invoice paid on contract terms | One invoice up to 30 days late | 10 |
| Marketing spend | 90% or more of the agreed budget spent, with proof | 70% to 89% with proof | 10 |
| Reporting | Monthly sell-out and stock report by SKU, on time three months out of three | One month late or incomplete | 10 |
| Team | Agreed named staff in place all quarter | A vacancy filled within the quarter | 5 |
A line in band scores its full weight, and half points score half. Anything else gets zero.
Why sell-out carries a quarter of the score
Sell-out is the only line that tells you shoppers bought the product. It gets the biggest weight for that reason. Purchases don’t appear anywhere on the sheet. They still matter for your forecast, but a distributor that buys more than it sells loses points twice, on sell-out and on weeks of cover.
For the cover band, start from how long a reorder takes to land. With an eight-week lead time, the band runs from eight to 12 weeks. Score the figure at quarter end, and expect it to jump before Double 11. China’s car dealers work to a much tighter rule.
China’s car dealers held 1.58 months of stock against monthly sales in August 2026. The association treats 0.8 to 1.2 months as the reasonable range and anything above 1.5 as the warning level. Source: China Automobile Dealers Association (中国汽车流通协会), September 2026. http://www.cada.cn/Data/info_85_10567.html
Imported goods need more cover than that. They don’t need 20 weeks.
Store coverage counts outlets that sold at least once in the quarter. A shelf can stay listed for a year while sales slide. That’s what happened to Langnese, the German honey brand: sales kept dropping month after month while its distribution in China stayed stable. The way out, from our published Langnese case, was a plan that brand and distributor agreed together, built on nine growth pillars. A scorecard is how you check a plan like that every quarter.
Score price discipline without breaking China’s competition law
This line needs the most care. China’s Anti-Monopoly Law bars a supplier from agreeing with a distributor to fix its resale price or set a minimum one.
Article 18 prohibits an operator from reaching an agreement with a trading counterparty to fix the resale price to a third party or to set a minimum resale price to a third party. Source: Anti-Monopoly Law of the People’s Republic of China (2022 amendment), Ministry of Commerce (商务部) policy database, June 2022. https://policy.mofcom.gov.cn/claw/clawContent.shtml?id=97047
A KPI that docks points for selling below a set price is that kind of agreement, written into an assessment. SAMR has fined a company for exactly that.
SAMR fined Yangtze River Pharmaceutical 764 million RMB, 3% of its 2018 sales, for fixing and setting minimum resale prices. The company enforced them through rules, tighter assessment, penalties on distributors that sold low and an agency paid to watch online prices. Source: State Administration for Market Regulation (市场监管总局), via the Shanghai Medical Products Administration, April 2021. https://yjj.sh.gov.cn/scjgyw/20210419/a2af0d4d5fae4bbc94e9105b8edc60c1.html
So score what the distributor controls and the contract can lawfully ask for. Did stock from its batch codes turn up through a channel you never approved, on Tmall, JD, Douyin or Pinduoduo? Did it run promotions outside the calendar you agreed? Have a lawyer qualified in China read the clause before it goes into the contract.
Payment days, and what a score should change
Payment days score against the terms you signed. Chinese buyers stretch terms, and the market average is long.
Companies in mainland China offered customers 81 days of credit on average in 2026. Of those surveyed, 86% suffered late payment, and late payments ran 73 days past due on average. Source: Coface (科法斯), Asia-Pacific Payment Survey 2026, via PR Newswire (美通社), August 2026. https://www.prnasia.com/story/543914-1.shtml
A score has to change something the distributor cares about. Chinese brands already tie it to money, and one noodle maker’s IPO filing shows how.
Xiangnian Foods sets each credit distributor’s credit line and credit period from an assessment across several dimensions. For credit distributors with under 20 million RMB of revenue, the credit period was 120 days in 2020 and 30 to 90 days in 2021 and 2022. Source: Xiangnian Foods (想念食品) and Sinolink Securities, reply to the Shanghai Stock Exchange IPO inquiry, June 2023. https://static.sse.com.cn/stock/disclosure/announcement/c/202306/001518_20230626_JL8O.pdf
Our scoring rule is simple. At 80 or above, terms stay and you talk about growth. Between 60 and 79, agree two fixes with named owners for the next quarter. Below 60 for two quarters running, start the remedy route your contract sets out.
One more rule. Expect pushback on it. No report, no score. When the monthly report is missing, sell-out and weeks of cover score zero too, because nothing on the sheet can be checked.
A worked score
Take a distributor that bought 130% of its annual target. On sales alone, it’s your best partner. On the sheet, it looks different.
| KPI | Result this quarter | Points (of weight) |
|---|---|---|
| Sell-out | 95% of plan | 25 of 25 |
| Weeks of cover | 17 weeks against an 8 to 12 week band | 0 of 15 |
| Store coverage | 80% of agreed outlets | 7.5 of 15 |
| Price discipline | No breach | 10 of 10 |
| Payment days | All on terms | 10 of 10 |
| Marketing spend | 75% spent, with proof | 5 of 10 |
| Reporting | Three reports on time | 10 of 10 |
| Team | Fully staffed | 5 of 5 |
| Total | 72.5 of 100 |
A 72.5 is a fixable quarter. Those 17 weeks of cover are the problem, and the next order should wait until stock comes back into the band.
FAQ
What KPIs should I set for a distributor in China?
Eight, scored every quarter: sell-out against plan, weeks of cover, store coverage, price discipline, payment days, marketing spend, reporting and team. Weight sell-out highest, about a quarter of the total. Leave purchases off the sheet, because a distributor can hit a purchase target by loading stock it can’t sell.
Can I penalize a Chinese distributor for selling below my price?
No. Article 18 of China’s Anti-Monopoly Law bars agreements that fix resale prices or set a minimum, and SAMR fined Yangtze River Pharmaceutical 764 million RMB partly for punishing low-price distributors. You can score whether stock leaks into channels you never approved and whether promotions follow the agreed calendar.
How often should I review the scorecard?
Every quarter, at a fixed meeting, using the distributor’s monthly reports for the three months. Agree the weights and bands before the quarter starts. A first-year distributor needs one full quarter of reports before the score means much, so treat the first review as a baseline.
What if my distributor won’t share sell-out data?
Write it into the contract before you sign: a monthly report by SKU and outlet, due on a fixed day, with stock on hand. After signature it’s a favor you have to ask for. Until the reports arrive, the reporting line scores zero and so do sell-out and weeks of cover, which tends to settle the argument.
Before you sign, the guide to finding a distributor in China lists the terms to settle, and Compass holds distributors we have met in person. After signature, distributor management runs the reviews.
Updated November 7, 2026
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