---
title: "2017: Distributors, Make Your Company Smaller and Lighter to Maximize Profits!"
description: "The economic environment has been tough in recent years, especially this year, with declining consumer purchasing power, overcapacity, and severe product and marketing homogenization, making 2016 difficult for FMCG distributors. Some are even struggling to survive. Facing this objective market adversity, what should distributors do in 2017? By making the company smaller and lighter, they can focus on a specific channel or category for long-term development and breakthroughs; by being customer- and channel-oriented, they can escape the trap of cost-based operations and price competition, building true core long-term competitiveness."
author: "快消君"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-01-03"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/jxVkOHuR813FIPx5X7UDnA"
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# 2017: Distributors, Make Your Company Smaller and Lighter to Maximize Profits!

> The economic environment has been tough in recent years, especially this year, with declining consumer purchasing power, overcapacity, and severe product and marketing homogenization, making 2016 difficult for FMCG distributors. Some are even struggling to survive. Facing this objective market adversity, what should distributors do in 2017? By making the company smaller and lighter, they can focus on a specific channel or category for long-term development and breakthroughs; by being customer- and channel-oriented, they can escape the trap of cost-based operations and price competition, building true core long-term competitiveness.

Foreword:
The economic environment has been poor in recent years, especially this year. Consumer purchasing power has declined, overcapacity is severe, and product and marketing homogenization is rampant, making 2016 a difficult year for FMCG distributors. Some are even struggling to stay in business. While discussing the unfavorable environment, we also lament the situation facing the distributor community. Facing the objective reality of a market downturn, what should distributors do in 2017?
By making the company smaller and lighter, they can focus on a specific channel or category for long-term development and breakthroughs; by being customer- and channel-oriented, they can escape the trap of cost-based operations and price competition, building true core long-term competitiveness.
**How to make the company smaller and lighter?**
**Case 1**
Years ago, I came into contact with a distributor with annual sales of nearly 100 million yuan. More than a decade ago, this couple, through hard work and forward-thinking business acumen, started from scratch and grew to a scale of about 100 million yuan in sales a few years ago, ranking among the top in the local distributor industry. They represented nearly 30 brands and over 3,000 SKUs. Not long ago, I had the opportunity to meet this distributor mogul again. When I asked about their situation, they still had the same brands, with basically no major changes. During our conversation, I learned that business was not good; costs were rising, and while sales had not increased, profits were declining. It had reached a point where it was hard to sustain! This made me ponder: in the current market environment, is the "big and comprehensive" business approach still suitable for distributors?
The pursuit of size and comprehensiveness is the most common phenomenon among Chinese distributors. The reason is to seek various opportunities, doing whatever can be done, and taking on any brand that can make money, hoping that if one area fails, another will succeed. However, as market competition intensifies and growth space and first-mover advantages are exhausted, companies begin to decline. This is the dilemma many distributors face today. In the current market environment, distributors should learn to make their companies smaller and more refined, and only by focusing on their advantageous channels and products can they maintain core competitiveness in the long run.
**Case 2**
The word "focus" has been popular recently, and many people agree with it, but when it comes to actual implementation by distributors, few truly do it. A long-time distributor friend of mine mainly represents and operates bulk food products, and in this field, he is a leading figure locally. Last year, I suddenly received a call from this friend asking if he could take on a certain major brand. The manufacturer's salesperson had visited several times, and the agency terms offered were quite favorable. My advice at the time was: setting aside the pros and cons of this brand locally, based on this distributor's actual situation—his channels, operational experience, sales team, and other factors—it was not a good fit. It would be better to concentrate his efforts. As a result, instead of expanding his product range, he should contract it. In the end, he reduced his product range, but sales and profits increased. At the same time, the distributor's energy was also reduced, allowing him to focus on a specific product area. However, my distributor friend ultimately could not resist the temptation of that major brand. In the end, it turned out to be "starting with a toast and ending in enmity!"
Based on the above two cases, let's look at how to make the company smaller and profits bigger in 2017!
**1**
**Emphasize management, not scale**
The most intuitive and simple way to judge a distributor's qualifications is by scale. So, externally, whether a company is considered good or not often depends on its size. However, there are not many distributor companies that truly value the management of their sales team and sales talent. Many distributors would rather spend millions on a warehouse than introduce advanced management tools and ideas. This month, at a meeting, I had a good conversation with a distributor from a county-level market. This seemingly 60-plus-year-old distributor operates bakery products locally, with annual sales of around 12 million yuan. Now his son has basically taken over the business, but he is very worried about his son and cannot accept a normal management tool like a "visit order system." During the conversation, this distributor also expressed concern about his son's business. There are many distributors like this, still stuck in traditional thinking—large in scale but crude in management.
**2**
**Emphasize talent, not assets**
For any type of enterprise, the cultivation and use of excellent talent should be a major topic. For the distributor community, due to the nature and scale of their businesses, the formal management, training, and promotion of sales teams and sales talent are often not given due attention. Some distributors would rather buy themselves a more luxurious car than hire a professional manager or provide employees with a formal training opportunity. In fact, excellent talent is the soul of the team.
**3**
**Emphasize efficiency, not sales volume**
If a small company wants to win, it must be more efficient than larger competitors; otherwise, it will be eliminated. For example, you need to provide slightly better service than larger competitors, deliver slightly faster, and respond to information slightly quicker. Only then can your small company survive better.
**4**
**Emphasize service, not expansion**
In today's FMCG industry, it is no longer the seller's market of a few years ago. There is severe overcapacity. Distributors and consumers actually do not lack product choices now; terminal retailers have plenty of homogenized products. No matter how clever the marketing tactics and techniques, they are already commonplace for terminal retailers. The era of winning with a single product is over. So, what is the core competitiveness of distributors with downstream customers? It is service. In other words, distributors should not rely on products but on service to build stickiness with terminal retailers, making the relationship stronger!
By making the company smaller and lighter, they can focus on a specific channel or category for long-term development and breakthroughs; by being customer- and channel-oriented, they can escape the trap of cost-based operations and price competition, building true core long-term competitiveness.
**Source: FMCG Family (ID: lp800315111)**
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