★ Type 1: Distributors Respected by Peers When our salespeople go to the market and inquire, if everyone praises a distributor for their strong capabilities, high level, good service, and credibility, we don't need to conduct a detailed investigation; we can directly visit them and invite them to be our general distributor. Let me show you a case: when a famous brand's salespeople were developing distributors in the market, they first went to local retail outlets to see which product had the highest distribution rate and which product had the best in-store display. If product A had the highest distribution and best display, they would ask the retailer, "Who supplies you with product A? Is their service thorough? Is their reputation good?" The retailers would unanimously say, "Our goods are supplied by Mr. Wang from a certain trading company. Mr. Wang is capable, high-level, provides good service, and keeps his word." Then the salesperson would directly approach Mr. Wang and say, "Distribute our product!" A distributor praised by terminal owners is the best distributor for us.
★ Type 2: Distributors with Monopoly Power in Regional Markets Over the years, through market洗礼, our country has seen the emergence of a number of powerful distributors. These distributors monopolize local market resources, and they are the ones our company must approach if we want to enter the local market. To successfully enter the local market, you must go to them.
Specifically, these distributors can be divided into the following types: First, market monopoly. These distributors have a sound network, strong promotion capabilities, and a relatively high market share in the local market. For example, there is a cosmetics distributor in Linfen, Shaanxi, who boasted, "In Linfen, whatever cosmetics I sell become popular. It's not because your brand is big, well-known, or has strong promotions; it's because I am willing to sell a product, and it will sell well in this market." Why did this distributor dare to make such a bold claim? Simply because this distributor monopolizes over 60% of the local cosmetics business. Second, category monopoly. These distributors monopolize the operation of most brands in a certain category in the local market, including first-tier and second-tier brands. They may represent dozens or even hundreds of products of the same category. For example, a condiment distributor monopolizes over 70% of the condiment shelves in supermarkets. If such a distributor supplies 70% of the condiment varieties on local supermarket shelves, can your product enter these terminals and channels without approaching this distributor? Impossible. Third, terminal or channel monopoly. These distributors have absolute advantages in certain channels or terminals, occupying a considerable share. For example, a liquor distributor in a certain place monopolizes over 80% of the sales in local nightclubs. If you want your product to enter local nightclubs, you must have this distributor represent you; otherwise, you cannot enter at all. This is channel monopoly or terminal monopoly. Fourth, promotion monopoly. Some distributors have bought the promotion rights of local terminals. If you want your product to enter these terminals and conduct promotions, you must go through them; otherwise, you cannot carry out promotional activities in these terminals.
★ Type 3: Distributors Who Provide Good Service to Downstream Customers The service we talk about here is not just sales service, but more importantly, guidance service. These distributors not only provide good sales service to wholesalers and retailers but also provide training, consulting, and other guidance services to downstream wholesalers and retailers. What are the common characteristics of such distributors? They have advanced business concepts and strong management capabilities. When cooperating with downstream customers, they can provide guidance, training, and consulting services to help downstream customers keep up with the development pace of manufacturers. These distributors are the spiritual leaders of downstream customers. If we cooperate with such distributors, it will greatly improve the quality of our company's network and help the development of our channels.
Let me give you an example: Piaoxiang Food Co., Ltd. There is a condiment distributor in a certain place whose company is called Piaoxiang Food Company, and the boss is Pei Xiaosheng. In 1989, he left his government job to become a distributor. A few years later, he became a leading condiment distributor in the prefecture-level market. This distributor, in the process of cooperating with downstream customers, can provide guidance services or advisory services. Many distributors in our country manage downstream customers by lowering prices or offering promotions to attract customers to purchase from them, but this distributor cultivates the loyalty of wholesalers and retailers through good service.
He mainly uses two methods in managing downstream customers: The first method is concept guidance. The general distributor said a very good sentence: "The path that the general distributor has walked is a path that the second-tier wholesalers have not walked. Therefore, the general distributor has the responsibility to point out to the second-tier wholesalers the direction they should develop." Today, many general distributors have developed step by step from wholesalers. They have already walked the path from wholesaler to general distributor. Now, there are still many wholesalers in the wholesale field, working hard every day to move goods and make money. The general distributor has the responsibility to point out the way for wholesalers to develop. Therefore, when Pei Xiaosheng cooperates with wholesalers, first, he instills new marketing concepts into downstream customers. He conveys and implements new marketing concepts to these wholesalers, discarding the outdated and backward ideas in their minds. For example, many wholesalers at that time held the concept of selling whatever products sell well, often selling counterfeit and shoddy products, not paying attention to credibility or service. During cooperation, Mr. Pei patiently taught them that this approach would not work, and admonished them to establish the concept of legitimate, credible, and honest operation. Mr. Pei also helps these wholesalers formulate development goals for the new year and strategies and methods to achieve these goals. This is the first method of managing distributors.
Mr. Pei's second method is the "Five-ization" management of customers. First, branding: use the manufacturer's brand to arm wholesalers. When Mr. Pei first started his business, many wholesalers had no concept of branding. Without the concept of brand, when choosing products, they would look at which product was cheaper, which sold well, which had strong promotions, or which had high profit margins, and then sell that product. They often sold counterfeit and shoddy products. During his interactions, Mr. Pei repeatedly advised them that we have entered an era of brand marketing; only by operating, representing, and managing brands can we do business well. Many wholesalers, after listening to his advice, began to abandon counterfeit products and start representing branded products.
Second, specialization: assist downstream customers in product brand portfolio. In the past, many wholesalers had no concept of brand integration. Many distributors and wholesalers represented several or dozens of brands, but there was no organic connection between the brands, and they did not achieve the effect of 1+1>2. Mr. Pei patiently guided them to recombine their products: which products are image products, which are profit products, which are volume products, and which are products to attack competitors. By helping wholesalers with brand portfolio, they achieved the effect of 1+1>2.
Third, individualization: Mr. Pei believes that every wholesaler has strengths and weaknesses, strong points and weak points. Therefore, he patiently observes and investigates each wholesaler's situation and then provides targeted guidance based on each wholesaler's weaknesses.
Fourth, humanization: make friends with these wholesalers.
Fifth, knowledge-based: Mr. Pei believes that wholesalers should play the role of "five members": shelf stocker, delivery person, promoter, salesperson, and manager. Then, how to be a shelf stocker? How to be a delivery person? How to be a promoter? How to be a salesperson? How to be a manager? Mr. Pei provides targeted training for them. The sales network established by such a general distributor has very high loyalty from network members. If we rely on such distributors to build our sales network, it will definitely be an iron-clad network, a cement channel. We must recognize that distributors operate products, but what they sell is service. This is a concept we must understand. Distributors operate products, but they sell service. Distributors purchase products from manufacturers, but they must add service before selling to wholesalers and retail terminals. Conversely, if we find distributors who have no service awareness or concept, and only think about making money for themselves, then such distributors will ruin our products and our market.
★ Type 4: Distributors Who Can Provide Strategic Advice What are the common characteristics of these distributors? They have rich market operation experience and are familiar with local market conditions, consumer characteristics, channels, and competing products. They can propose highly effective promotion plans for our products. Zhang Ruimin of Haier once said, "Thinking determines the way out." What kind of distributors are these? They have ideas. Once they get your product, they can immediately identify the selling points and propose an effective market promotion plan. This is the most obvious characteristic of such distributors.
A sales director of a company in Sichuan warned his salespeople: "If you find a distributor who lacks strength but has ideas, we can support their development. Conversely, if a distributor has strength but no ideas, even if we give them great support, it will be difficult for them to sell our products well." This sales manager's words are very insightful.
★ Type 5: Distributors with Strong Market Expansion Capability The fifth type of distributor I recommend is those with strong market expansion capability.
What is the most typical characteristic of these distributors? They have a capable sales team under them. Once they get your product, they can quickly distribute it to retail terminals, develop blank markets immediately, and start our market. This tells us that we should not choose "sitting merchants" (those who wait for customers). Even today, there are still a number of distributors in our country who are "sitting merchants." Their business model is: husband purchases goods, wife collects money, open the door is a shop, close the door is home. Relying on such distributors who operate by sitting in the store, it is difficult to distribute our products to retail terminals, provide good service to downstream customers, collect the most useful market information, or sell our products well in the market.
★ Type 6: Distributors with Network Advantages These distributors have special advantages in a certain channel we plan to enter. They may not have experience or strong strength, but they have special advantages in the channel we plan to enter. For example, as we mentioned earlier, Yanghe Liquor entered the market through group purchase. Therefore, it looked for distributors with extensive personal connections, who knew a large number of factory directors, company presidents, government department heads, and government officials. With such relationships, our products can enter the group purchase channel, helping us start the market.
In recent years, due to the deepening of marketing, many distributors have also differentiated. Many distributors focus on the operation of a specific channel. For example, I know a distributor who focuses on the school channel, with a sound network in local middle schools, primary schools, and universities. If you want to enter the school channel, you go to him.
What common mistakes do many enterprises make? The mistake is that the distributor we find lacks advantages in the target channel we want to enter; it's a mismatch. We find a distributor with strong strength and interest in our product, but the product doesn't sell well. Why? After investigation, we find that this distributor is good at moving goods in the wholesale market but not good at terminal operations. Our product needs terminal sales, but he doesn't have that channel advantage. This is a typical mistake of many enterprises today: letting a distributor who is good at circulation operate terminals.
★ Type 7: Distributors of Competing Products The seventh type of distributor I recommend is to find the distributors of the largest and best-selling competitors in our industry and let them represent our products.
In "The Art of War," it is said, "Win by surprise, engage by orthodox means." Finding distributors of competing products, especially those of the largest and best competitors, to distribute our products is a surprise move. Sometimes, surprise moves bring very good results. For example, when Sofe cosmetics was first launched, the company's president proposed the slogan "Follow P&G's channel." He asked his salespeople to find P&G's distributors. Think about it: P&G's distributors have the most complete network, the strongest strength, and the best management capabilities. If P&G's distributors distribute our products, our products can quickly reach the market through P&G's channels and network.
Another example is Hualong Instant Noodles. In 1999, Master Kong launched a "channel intensive cultivation" strategy, which canceled large distributors and moved channels downstream. Many large distributors who had built their businesses by selling Master Kong products were now told they could no longer sell Master Kong products. They had no goods to sell, causing panic. When Hualong's president Fan Xianguo noticed this opportunity, he immediately told his salespeople to find Master Kong's distributors. Hualong's salespeople told them, "Master Kong won't let you sell their products, but we will. Master Kong won't let you make money, but we will." As a result, Hualong used Master Kong's sales network built over many years to make its products popular in the market immediately. This is the approach of finding the distributors of the largest and best competitors in our industry to sell our products.
★ Type 8: Distributors Who Are Former Salespeople of Large Companies The eighth type of distributor I recommend is those who are former salespeople of large companies. In recent years, our country has seen a number of such distributors. These distributors previously worked as salespeople, regional managers, regional directors, or even higher positions in large companies and big brands. After a few years, they didn't want to work for others for life as professional managers; they wanted to create their own careers and became distributors. This type of distributor is very good for us. Why? There are two main reasons. First, these distributors, having worked in large companies, know the thinking, methods, and approaches of large enterprises in market operations. They have received comprehensive training in large companies, and their overall market operation capability is relatively strong. This is their first advantage. Their second advantage is that, coming from a manufacturer background, they know what manufacturers need, what they expect, and what they want distributors to do. Therefore, these distributors, who are former manufacturer salespeople, cooperate very well with manufacturers. This is the eighth type of distributor I recommend.
★ Type 9: Large Second-Tier Wholesalers with Potential This is also a very successful experience in developing distributors in our country. Every second-tier wholesaler has the idea of rising above the rest and becoming a general distributor one day. We should find those large second-tier wholesalers with strong strength in the local market and develop them into general distributors. These distributors have relatively high loyalty to our company. This is a path proven by enterprise practice, especially when we look for large second-tier wholesalers of competing products. Developing them into our general distributors can use the competitor's channels to sell our products.
★ Type 10: New Generation Distributors New generation distributors are young distributors around 30 years old. These distributors have important characteristics: advanced thinking, full of drive, competitive, and eager to learn. Such distributors are very good for our enterprise.
In recent years, in our country's beer industry, a rising star, a dark horse, has emerged: Wei Xue Beer. When developing distributors, this company's salespeople do not look for older distributors in their 40s, 50s, or 60s; they all look for a group of young distributors around 30. Why? The salespeople explain: "The old distributors in their 50s, 60s, or 70s are, first, conservative in thinking and concepts, rely on experience, and don't like to learn. Moreover, these distributors have been in business for one or two decades, and they already have hundreds of thousands, millions, or even tens of millions in assets. Their desire for money is no longer strong, and their pursuit of money is no longer impulsive. Therefore, they are content with small wealth and have lost their drive. If you find such distributors, it will be difficult for them to sell your products very well in the local market. On the contrary, if you find young distributors, they are full of drive, eager to learn, and have liberated thinking. Additionally, these distributors around 30 are not yet very strong, and they still want to get rich and make more money. This desire for wealth and profit drives them to work hard every day to promote our products."
★ Type 11: Cross-Industry, Powerful Distributors The last type of distributor I recommend is cross-industry, powerful individuals. When selecting distributors, we should not be limited by industry experience. I have seen in some enterprises that salespeople often hope the distributor has experience in our industry. For example, if you are a liquor producer, you hope the distributor has previously sold liquor and has rich experience in liquor operations. Now many enterprises do the opposite: they deliberately look for people from other industries who have no experience in this industry, or even have never done sales, to sell our products. As a result, these people still sell very well and successfully.
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