---
title: "11 Types of Distributors Manufacturers Prefer to Cooperate With"
description: "This article outlines 11 types of distributors that manufacturers prefer to cooperate with, including those respected by peers, with monopoly power, providing good service, offering strategic advice, strong market expansion, network advantages, competitors' distributors, former salespeople from big companies, potential large secondary wholesalers, new-generation distributors, and cross-industry strong players. It also promotes the 2018 China Digital Innovation Conference."
author: "New Distribution"
publisher: "New Distribution"
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published: "2018-06-26"
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# 11 Types of Distributors Manufacturers Prefer to Cooperate With

> This article outlines 11 types of distributors that manufacturers prefer to cooperate with, including those respected by peers, with monopoly power, providing good service, offering strategic advice, strong market expansion, network advantages, competitors' distributors, former salespeople from big companies, potential large secondary wholesalers, new-generation distributors, and cross-industry strong players. It also promotes the 2018 China Digital Innovation Conference.

Click 'Read Original' for details.

★ Type 1: Distributors Respected by Peers
When our salespeople go to the market to inquire, if everyone praises a distributor for strong capability, high level, good service, and good reputation, we don't need to do a detailed investigation; we can directly visit and ask them to be our general distributor. Let me show you a case: when a famous brand's salespeople develop distributors in the market, they first go to local retail terminals to see which product has the highest distribution rate and which product has the best in-store display. If Product A has the highest distribution and best display, they ask the retailer, "Who supplies Product A? Is their service thoughtful? Is their reputation good?" The retail store owners unanimously say, "Our goods are supplied by Mr. Wang from a certain trading company. Mr. Wang is capable, high-level, service-oriented, and trustworthy." Then the salesperson directly finds Mr. Wang and says, "Distribute our products!" A distributor praised by terminal owners is the best for us.

★ Type 2: Distributors with Monopoly Power in Regional Markets
Over the years, through market baptism, a number of powerful distributors have emerged in our country. These distributors monopolize local market resources, and they are the ones we must approach to enter the local market. To successfully enter the local market, you must find them.

**Specifically, these distributors can be divided into the following types:**

**First, market monopoly.** These distributors have a sound network, strong promotion capabilities, and high market share in the local market. For example, in Linfen, Shaanxi, there is a cosmetics distributor who boasts, "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 choose to sell a product, and it sells well. Why?" The reason is simple: this distributor monopolizes over 60% of the local cosmetics business.

**Second, category monopoly.** These distributors monopolize most brands in a certain category in the local market, including first- and second-tier brands. They may represent dozens or even hundreds of products of the same category. For example, a seasoning distributor monopolizes over 70% of the seasoning shelves in supermarkets. If such a distributor supplies 70% of the seasoning varieties in local supermarkets, can your products enter these terminals and channels without cooperating with them? Impossible.

**Third, terminal or channel monopoly.** These distributors have absolute advantages in certain channels or terminals, occupying a significant share. For example, a liquor distributor in a certain place monopolizes over 80% of sales in local nightclubs. If you want your products to enter local nightclubs, you must find this distributor; otherwise, you cannot enter at all. This is channel or terminal monopoly.

**Fourth, promotion monopoly.** Some distributors buy out the promotion rights of local terminals. If you want to promote your products in these terminals, you must go through them; otherwise, you cannot conduct promotions there.

★ Type 3: Distributors Providing Good Service to Downstream Customers
Here, service does not only mean sales service, but more importantly, guidance service. These distributors not only provide good sales service to wholesalers and retailers but also offer training, consulting, and guidance services to downstream wholesalers and retailers. What are the common characteristics of such distributors? They have advanced business awareness and strong management capabilities. When cooperating with downstream customers, they provide guidance, training, and consulting to help them keep up with the manufacturer's development pace. These distributors are the spiritual leaders of downstream customers. If we cooperate with such distributors, it will greatly improve the quality of our network and help our channel development.

Let me give an example: Piaoxiang Food Co., Ltd. There is a distributor in a certain place who deals in seasonings. His company is called Piaoxiang Food Company, and the boss is Pei Xiaosheng. In 1989, he left a government position to become a distributor. A few years later, he became a top seasoning distributor in the prefecture-level market. This distributor provides guidance or advisory services to downstream customers during cooperation. Many distributors in our country manage downstream customers by lowering prices or offering promotions to attract them, but this distributor cultivates loyalty from wholesalers and retailers through good service.

He mainly uses two methods to manage downstream customers: **First, concept guidance.** This general distributor said a very good sentence: "The path the general distributor has walked is a path that secondary wholesalers have not walked. Therefore, the general distributor has the responsibility to point out to secondary wholesalers the direction they should develop." Today, many general distributors have developed step by step from wholesalers, having walked the path from wholesaler to general distributor. But there are still many wholesalers in the wholesale field, working hard every day to move goods and earn money. The general distributor has the responsibility to point out how wholesalers should develop. Therefore, when Pei Xiaosheng cooperates with wholesalers, first, he instills new marketing concepts into downstream customers, conveying and implementing new marketing ideas to these wholesalers, discarding their outdated and backward ideas. For example, many wholesalers used to sell whatever sold well, often selling counterfeit and shoddy products, ignoring reputation and service. During cooperation, Pei patiently taught them that this approach would not work, advising them to establish concepts of legitimate, reputable, and honest operation. Pei also helps these wholesalers set development goals for the new year and strategies and methods to achieve them. This is Pei's first method.

Pei's second method is **managing customers with five modernizations.**

**First, branding.** Use the manufacturer's brand to equip wholesalers. When Pei first started, many wholesalers had no concept of branding. Without brand awareness, they chose products based on low price, good sales, strong promotions, or high profit margins, often selling counterfeit products. During interactions, Pei repeatedly advised them that we are now in an era of brand marketing; only by operating and representing brands can we do business well. Many wholesalers, after hearing 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 without organic connections, failing to achieve a synergistic effect of one plus one greater than two. Pei patiently guided them to recombine their products, identifying which are image products, profit products, volume products, and competitive products, thereby achieving the effect of one plus one greater than two.

**Third, personalization.** Pei believes that each wholesaler has strengths and weaknesses, advantages and disadvantages. Therefore, he patiently observes and investigates each wholesaler's situation, then provides targeted guidance based on their weaknesses.

**Fourth, humanization.** Make friends with these wholesalers.

**Fifth, knowledge-based.** Pei believes that wholesalers should play five roles: stock clerk, delivery person, promoter, salesperson, and manager. Then, how to be a stock clerk? How to be a delivery person? How to be a promoter? How to be a salesperson? How to be a manager? Pei provides targeted training for them. The sales network built by such a general distributor has members with very high loyalty. The network we build relying on such distributors is bound to be an ironclad network, a cement channel. We must recognize that distributors operate products, but they sell service. This is a concept we must understand. Distributors operate products and sell service. They buy products from manufacturers, but they must add service before selling to wholesalers and retail terminals. Conversely, if we find distributors without service awareness or concept, only thinking about making money, such distributors will ruin our products and market.

★ Type 4: Distributors Providing 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 competitors. They can propose highly timely promotion plans for our products. Zhang Ruimin of Haier said, "Thinking determines the way out." What kind of distributors are these? They have ideas; after taking 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 Sichuan enterprise warned his salespeople: "If you find a distributor without strength but with ideas, we can support their development. Conversely, if a distributor has strength but no ideas, even with our full support, it's hard for them to sell our products well." This sales manager's words are incisive.

★ Type 5: Distributors with Strong Market Expansion Capability
The fifth type I recommend is distributors with strong market expansion capability.

What is the most typical characteristic of these distributors? They have a capable sales team that can quickly distribute your products to retail terminals, develop blank markets, and start the market immediately. This tells us not to choose those "sitting merchants." Even today, there are still many distributors in our country who are sitting merchants, with a model of "husband buys goods, wife collects money; open door is shop, close door is home." Relying on such distributors, 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.

★ 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, Yanghe Liquor entered the market through group purchases, so it found distributors with extensive personal connections, knowing many factory directors, company presidents, government department heads, and 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 differentiated, with some focusing on specific channels. 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 mistakes do many enterprises often make? The common mistake is finding distributors who lack advantages in the target channel, like "a horse's jaw against a cow's mouth." We find a distributor with strong strength and interest in our products, but they don't sell well. Why? After investigation, we find that this distributor is good at moving goods in the wholesale market but not at terminal operations. Our products need terminal sales, but they lack channel advantages. This is a typical mistake today: letting distributors good at circulation do terminal sales.

★ Type 7: Competitors' Distributors
The seventh type I recommend is to find the distributors of our largest and best-selling competitors in the industry and let them distribute our products.

"The Art of War" says, "Win by surprise, engage by orthodox means." Finding competitors' distributors, especially those of the largest and best competitors, is a surprise move. Sometimes, surprise moves bring excellent results. For example, when Sofe cosmetics was first launched, their president's slogan was "Follow P&G's path." They asked their salespeople to find P&G's distributors. Think about it: P&G's distributors have the most sound networks, strongest strength, and 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 refinement" strategy, canceling large distributors and sinking channels. Many large distributors who had built their businesses selling Master Kong products were now told they couldn't sell Master Kong products anymore, leaving them with nothing to sell and causing panic. Hualong's president Fan Xianguo saw this opportunity and immediately told his salespeople to find Master Kong's distributors. Hualong's salespeople told them, "Master Kong won't let you sell their products; we will. Master Kong won't let you make money; we will." As a result, Hualong leveraged Master Kong's years of established sales network, making its products immediately popular in the market. This is the approach of finding the largest and best competitor's distributors to sell our products.

★ Type 8: Distributors Formerly from Big Companies' Sales Teams
The eighth type I recommend is distributors who come from sales positions in big companies. In recent years, our country has such a group of distributors. These distributors previously worked as salespeople, regional managers, or even higher positions in big companies and big brands. After a few years, they didn't want to work for others all their lives 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 big companies, know the thinking, methods, and approaches of big enterprises' market operations. They have received comprehensive training in big companies, so their overall market operation capability is strong. This is their first advantage. Their second advantage is that they come from manufacturers, so they know what manufacturers need, what they hope for, and what they expect from distributors. Therefore, these distributors cooperate very well with manufacturers. This is the eighth type I recommend.

★ Type 9: Potential Large Secondary Wholesalers
This is also a successful experience in developing distributors in our country. Every secondary wholesaler has the idea of standing out and one day becoming a general distributor. We should find large secondary wholesalers with strong strength in the local market and develop them into general distributors. These distributors have higher loyalty to our company. This is a proven path in enterprise practice, especially when we look for large secondary wholesalers of competitors. Developing competitors' large secondary wholesalers into our general distributors allows us to use competitors' 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, strong drive, competitiveness, and eagerness to learn. Such distributors are very good for our enterprises.

In recent years, in our country's beer industry, a dark horse has emerged: Wei Xue Beer. When developing distributors, this company's salespeople do not look for older distributors aged 40-60, but all find young distributors around 30. Why? The sales staff explain that older distributors aged 50-70 are, first, conservative in thinking and concepts, rely on experience, and don't like learning. Moreover, these distributors have been in business for 10-20 years, with assets of hundreds of thousands, millions, or even tens of millions, so their desire for money is no longer strong, and their pursuit of money is no longer impulsive. They are content with small wealth and have lost their drive. Finding such distributors makes it hard for your products to sell well locally. Conversely, young distributors are full of drive, eager to learn, and open-minded. Additionally, these distributors around 30 are not yet very strong, and they still want to get rich and earn more money. This desire drives them to work hard every day to promote our products.

★ Type 11: Cross-Industry, Strong Distributors
The last type I recommend is cross-industry, strong people. When selecting distributors, we should not be limited by industry experience. I have seen in some enterprises that salespeople often hope distributors have experience in our industry. For example, if you produce liquor, you hope the distributor has sold liquor before and has rich experience in liquor operations. Now many enterprises do the opposite, specifically looking for people without industry experience, even those who have never done sales, to sell our products. As a result, these people still sell very well and successfully.

From August 22-24, the 2018 China Digital Innovation Conference (2018FDIC), hosted by the China FMCG Industry Association and organized by New Distribution, with the theme "Finding New Growth Engines," will be held in Shanghai!

This conference lasts 3 days and will focus on two main themes: marketing and supply chain, with six parallel forums: brand, channel, communication, B2B, same-city logistics, and innovative retail. We will invite industry experts, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.

We will invite over 500 FMCG enterprise executives, 200+ B2B industry CEOs, and 1000+ FMCG industry leaders to gather and discuss how the FMCG industry can use digital tools to achieve rapid growth again in the digital era. This conference will build a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information, understand best practices, and master more transformation skills.

Proposed Invited Enterprises

Conference Time
August 22-24, 2018

Conference Venue
Shanghai Baohua Marriott Hotel

Conference Content
August 22: Full-day check-in
Afternoon 14:00-17:30: Distributor Same-City Logistics Parallel Forum
Evening 18:30-21:00: New Distribution Night Gala Dinner
August 23: Theme: Marketing Digital Innovation
Morning 9:00-12:00: Marketing Digital Innovation Main Forum
Afternoon 14:00-17:30: Brand, Channel, Communication Parallel Forums
August 24: Theme: FMCG Supply Chain Digital Upgrade
Full day: FMCG Supply Chain Conference

Registration Method
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Highlights of Previous New Distribution Conferences
Click the links below to review the first, second, third, and fourth FMCG + Internet Conferences:

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