---
title: "13 Ways Distributor Bosses Die"
description: "Tolstoy famously said, 'Happy families are all alike; every unhappy family is unhappy in its own way.' The same applies to distributor bosses: successful ones share common traits, while those who fail do so for various reasons. Yet, upon closer analysis, common patterns emerge. As key sales channels for manufacturers, distributor bosses have existed for decades and no longer need to 'cross the river by feeling the stones,' as there are plenty of pioneers and martyrs whose successes and failures offer lessons to learn from."
author: "韩峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2015-08-04"
language: "en"
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---

# 13 Ways Distributor Bosses Die

> Tolstoy famously said, 'Happy families are all alike; every unhappy family is unhappy in its own way.' The same applies to distributor bosses: successful ones share common traits, while those who fail do so for various reasons. Yet, upon closer analysis, common patterns emerge. As key sales channels for manufacturers, distributor bosses have existed for decades and no longer need to 'cross the river by feeling the stones,' as there are plenty of pioneers and martyrs whose successes and failures offer lessons to learn from.

Tolstoy famously said, 'Happy families are all alike; every unhappy family is unhappy in its own way.' The same applies to distributor bosses: successful ones seem to share common traits, while those who fall, die, or close down do so for various reasons. Yet, upon closer analysis, common patterns can be found. As key sales channels for manufacturers, distributor bosses have existed for decades and no longer need to 'cross the river by feeling the stones,' as there are plenty of pioneers and martyrs whose successes and failures offer lessons to learn from.

The following content is based on the author's years of hands-on experience in distributor management, summarizing and compiling cases of distributors who failed in business. Presented as 'negative examples' to the vast number of distributor bosses in China, the aim is to serve as a warning, so that all distributor bosses can learn from these mistakes and avoid repeating them. Let the alarm bell ring long!

1. Death by Overwork
Diligence and pragmatism, traditional Chinese virtues, are particularly evident in most distributor bosses. They work from dawn to dusk, handling all matters inside and outside the store personally, without delegating to employees, not allowing staff to expand business, and never daring to leave the company. Some even dream about how to run the business better at night. This spirit is truly admirable. In the early stages of business, especially in third- and fourth-tier cities in the interior, 'mom-and-pop shops' are common, and this approach is effective initially. But the problem lies here: when the boss does everything, less capable employees cannot improve their skills, and capable employees feel there is no platform to utilize their talents and leave. There is no talk of improving business quality or building a team. After a few years, they may have earned some money, but their operational capabilities have not improved much. This way of operating can achieve some results in a less mature small market in the early stages, but as competition intensifies, the advantage of diligence becomes increasingly weak. At this point, it is more important to rely on the strength of the team and improve management capabilities to face fierce market competition. Otherwise, the result is that the distributor boss exhausts themselves, works harder than before, but business gets worse and worse. Eventually, either they cannot continue, or the manufacturer, with a phrase like 'the distributor cannot keep up with the company's development speed,' ruthlessly cuts them off.

2. Death by 'Letting Go'
Every distributor wants to make money and wants to earn it easily and happily, so many become 'hands-off bosses.' Not every boss can be a hands-off boss; if one truly achieves this, it means they have reached a certain level of mastery. But the reality is that many bosses 'let go' and end up losing the business, and naturally cannot remain the boss. The prerequisite for being a 'hands-off boss' is that the boss controls the overall direction, has a capable team, professional managers, a sound management system, and a reasonable and effective profit-sharing mechanism. Otherwise, it becomes 'shepherd-style' management, where the boss cannot promptly grasp the true state of the market, company, or employees. When business is poor, they only hear employees blaming the market or the manufacturer for insufficient advertising, poor products, or high prices, without discovering the real causes and making timely adjustments. Distributor bosses are particularly prone to listening to one-sided reports, only hearing employee feedback without deep investigation, and shifting all problems to the manufacturer, resulting in conflicts and becoming 'troublemakers' disliked by manufacturers. Worse, due to lack of store supervision and management, there are cases where the boss doesn't make money while employees rake it in. Operating this way, employees are scattered like loose sand, decisions are made 'by feeling,' and business cannot improve; sales will plummet and eventually hit a dead end.

3. Death by Comfort
Many third- and fourth-tier markets are still in the early stages of competition. Many distributor bosses, by representing a brand and opening a small store, can often run a lively business with their diligence and local resources. They then cultivate one or two capable salespeople and live comfortably. They are content with small success, stay stagnant, lack crisis awareness, and fail to use their first-mover advantage to surpass competitors. If you lead, you stay ahead. When strong competitors enter and market competition heats up, it is too late, and they have wasted excellent market opportunities. A distributor in a county-level city in Henan, representing a well-known domestic brand, was a mom-and-pop operation. Diligent, pragmatic, and articulate, they achieved sales of over 1.5 million in just over a year. The manufacturer's regional manager required the distributor to flatten the channel and do some terminal work before competitors entered on a large scale, to establish the brand image first, raise the entry barrier for competitors, and consolidate market position. The distributor felt business was good, their abilities strong, and they would deal with competitors when they came, finding various excuses not to adjust. As a result, their good days lasted less than two years. Many well-known brands entered the local market, with several major brands directly supplying terminals and launching aggressive brand promotions. The distributor's business was severely impacted. Only then did they decide to adjust, but the opportunity had passed, and regret was too late.

4. Death by Promotion
Promotion is a sharp tool to boost terminal sales, and no distributor can do without it. But promotion is also like a stimulant; it only temporarily boosts sales, and long-term use has side effects, causing great damage to the body's original functions. In today's fiercely competitive market, 'not doing promotions is waiting to die,' but more importantly, 'only doing promotions is seeking death.' More and more distributors find they have 'promotion dependency': no orders without promotions, no profit with promotions, and they are increasingly 'forced' into promotions. Manufacturers need volume, and regional managers' commissions come from volume, so distributors are forced to promote continuously, with increasing intensity and frequency. The result is that sales appear to increase, but the money in their pockets decreases, and prices keep falling. In one industry, a manufacturer brand that claimed to be a 'price butcher' promoted its own network to death. Promotions are necessary in many industries, but they must be 'time-limited, quantity-limited, and method-limited.' The key is moderation; going too far is as bad as not enough.

5. Death by Being Trapped
In the FMCG industry, many small enterprises are a mix of good and bad. When recruiting distributors, many manufacturers use sweet words and various preferential store-opening policies, even subsidizing terminal investments, making distributors feel they have found a bargain. But once the agency is signed, the manufacturer ignores them, with no guarantee of product quality or delivery, no support or management, leaving the distributor to fend for themselves. If the distributor performs poorly, the manufacturer doesn't care, only threatening to recruit new distributors to force compliance. Such distributors are typically trapped by unscrupulous manufacturers.

6. Death by 'Hanging a Sheep's Head, Selling Dog Meat'
In China, many distributor salespeople do private work, using the brand's name to visit customers but actually delivering products that are not from the represented brand, or secretly selling other products. This phenomenon exists because: first, salespeople generally focus on short-term interests; second, distributors cannot keep up with sales management; third, unscrupulous enterprises entice salespeople to 'stray.' This allows salespeople to exploit loopholes, and due to poor management, it is hard to detect such 'switching the prince for a cat' tricks in the short term. If distributors do not manage salespeople properly and supervise effectively, once salespeople taste the sweetness of such deception, it is unlikely they will return to the straight path. Once discovered, distributors, to protect their interests and market order, must make the painful decision to cut off the rotten limb.

7. Death by 'Straddling Two Boats'
Some distributors who now represent brands started with generic products. They saw no future in generics, so they chose to join more promising brand manufacturers. But some, after joining a brand, secretly keep their old generic business, thinking this increases their safety margin. In reality, 'straddling two boats' poses greater risks. First, the distributor feels they have a fallback; if the brand doesn't do well, they can always go back to generics, especially since generics still bring some cash flow and profit, and giving them up would be a pity. Because the distributor cannot wholeheartedly operate the brand, leaving a fallback is equivalent to blocking their own path to wealth. By spreading their energy, finances, and resources, the brand often fails to develop, and the manufacturer is very dissatisfied, eventually leading to replacement. All the distributor's efforts come to naught. A typical case is Boss Gan in a provincial capital city in Northeast China. While representing Brand A, he also operated his own Brand B. After three or four years, the market showed no improvement and kept declining. Manufacturer A repeatedly advised Gan to give up his generic brand, but he persisted. Seeing a promising market yield nothing, the manufacturer was forced to abandon Gan and recruit new distributors, starting from scratch.

8. Death by Nepotism
Many distributor bosses started as mom-and-pop shops and inevitably hired relatives. Hiring relatives is not inherently wrong, but one should 'appoint people on merit.' If relatives are incompetent, do not 'force a square peg into a round hole,' or the only loser will be the distributor. In a large city in North China, Boss Wang obtained the agency for a well-known domestic brand. He handed over full management to his brother-in-law, Xiao Lai. But Xiao Guo (as he was called) was a hopeless case—typical of being ambitious but incompetent, looking down on everyone. His management skills were mediocre, staff turnover was rapid, and eventually, he was left as a lone commander. Sales were predictable. But Wang remained stubborn, continuing his nepotism. Finally, unable to bear the poor performance, Wang applied to the manufacturer to give up the agency and closed down.

9. Death by Diversification
After making money in one business, distributors generally have an impulse to engage in multiple businesses and diversify. Diversifying, putting eggs in different baskets, seems to reduce risk but actually increases it. First, diversification diverts the distributor's energy. Everyone's energy is limited, especially for most Chinese distributors whose management skills are average. Once energy is scattered, they often neglect one thing for another. Second, it diverts funds and limited resources, preventing the distributor from focusing on one field. Stretching the sales front too thin results in none of the brands being done well, mediocre performance, no solid foundation in any field, no stable market share, no stable cash flow, and insufficient profit support. Once the market fluctuates, the business may be in jeopardy.

10. Death by Improper Partnership
Due to capital and network issues, some distributors choose to partner. The choice of partner is crucial; if chosen improperly, it can lead to endless trouble. When the partnership is just starting or doing poorly, there are not many conflicts. It is often when the business grows and improves that conflicts and clashes are most likely. The relationship between partners is somewhat like that of a married couple: most can share hardship but not prosperity. Especially if the partner who actually controls operations holds a minority stake and lacks integrity, they are most likely to infringe on the interests of the majority shareholder for their own benefit, leading to conflicts. Secondly, the institutional arrangement of interests between partners is crucial. Especially for minority shareholders with operational control, the majority shareholder should provide institutional arrangements for their interests. For example, as the partnership grows, the minority shareholder's stake should be appropriately increased, acknowledging their operational capabilities and performance, to prevent them from feeling unbalanced due to the mismatch between their contribution and the share of results, and thus harming the interests of other partners for their own benefit.

11. Death by Rich Wife's Side Business
Among Chinese distributors, there is a large group of women, most of whom have built their businesses through their own efforts. But a small portion are wives whose husbands are wealthy and powerful. Seeing their wives with nothing to do, they spend money to get them an agency for a manufacturer's brand. Such rich wife distributors rarely succeed; almost all close down. Reasons: first, these wives have their husbands as a fallback, so they cannot go all out, treating it as a side business. If they lose money, they can always go back to being full-time housewives. Their drive is clearly insufficient, and they easily give up when facing difficulties. Second, although the husbands have business acumen and ideas, they are busy with their larger businesses and have no time or energy to manage the wife's side business. A typical case is Ms. Li in City C, Sichuan Province. Her husband runs an office furniture business with annual turnover of tens of millions. He found a B brand agency for his wife. Li, who had worked as an accountant, knew nothing about business and was slow to learn. After two years, the company suffered continuous losses. Her husband had to subsidize the losses each year, unable to complain. The couple often argued about the business. In the third year, still losing money, the husband could no longer sustain it. Coincidentally, Li became pregnant with their second child, so the husband had to close the business.

12. Death by Outdated Business Thinking
Some distributor bosses have outdated business thinking, clinging to old ways and failing to keep up with the times, causing the market to shrink. Although the distributor still makes money, they cannot produce high yields from a high-potential market. The manufacturer cannot sit idly by and eventually has no choice but to replace the outdated distributor. In City S, Hebei Province, Lao Yang, over fifty, was influential on a local street. Due to his diligence, business was decent, and he made money every year. As market competition deepened, many distributors began to directly control terminals, moving away from wholesale. The street where Lao Yang's store was located saw business plummet, with few customers. Only then did Lao Yang think about hiring people to visit stores, but it was too late; there was no opportunity left in the local market. Other competing brands had entered early, so Lao Yang's store sales declined steadily, and the manufacturer revoked his agency.

Source: — Teacher Han Feng's first book for distributor bosses on management, 'Making High-Profit Distributors.' This article has been slightly abridged.

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