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A friend in the liquor wholesale business once said a classic line: "Service industries only have 'three accompaniments' staff, but we distributors have to provide 'full accompaniment.'" Why did Mr. Liu say something so bittersweet?

This friend has been in the liquor wholesale business in Anhui for over 10 years. He has weathered many storms but still struggles on the edge of business pain. He lives in constant anxiety, worrying that the manufacturer might cancel his distribution rights, shrink his territory, that downstream networks might turn against him or engage in cross-region selling, that downstream customers might not push his products, and he goes to bed at 11 or 12 at night, only to wake up at 4 or 5 in the morning, tossing and turning over business matters. When manufacturer representatives visit, he has to go all out to accompany them for meals, drinks, entertainment, market visits, transportation, and conversation. During holidays, he even has to 'burn incense' to key company figures to avoid displeasing the manufacturer. So, isn't Mr. Liu exhausted?

Although we are in the 21st century with innovative marketing theories everywhere, there are still many distributors like Mr. Liu. What causes such distributors to live so tiredly?

I. Analysis of Distributors' Current Operational Status

In fact, the current operational status of some distributors can be summed up in six simple words: big head, sore waist, light feet.

First: Big Head. This means a lack of strategic thinking, which manifests in three main aspects:

  1. Single Profit Model: Relying on product price differences and rebates/policies for profit. Distributors often play the game of finding products, making money from price differences, then killing the product and searching for new ones, repeating the cycle.

  2. Narrow Survival Paths: One way is to cling to big brands, hoping to make money through brand pull and product appeal. Another is speculation, using new or second/third-tier brands for low-price sales to earn huge profits, but once product issues or after-sales problems arise, they get into trouble (e.g., liquor poisoning, bottle explosions causing injury, expired products).

  3. Homogeneous Competition: Following what others do leads to vicious competition, resulting in widespread losses and collapses.

Second: Sore Waist. This means resource shortages, which manifest in three main aspects:

  1. Narrow Product Channels: Waiting for manufacturer sales visits, relying on friend introductions, or attending industry trade fairs or reading trade magazines. (Manufacturer sales visits often come from small or medium enterprises that exaggerate product advantages and market investment; friend introductions can be one-sided and exaggerate; trade fairs and magazines also tend to exaggerate and attract scammers.)

  2. Severe Talent Shortage: The capable are restless, and the content are incapable.

Case: Recently, Mr. Mao, the general manager of a liquor trading company in Jiangxi, was troubled by sales staff issues. The few backbone salespeople he had painstakingly trained were becoming increasingly disobedient; if he was slightly strict, they would threaten to quit. Meanwhile, the obedient salespeople, despite receiving salaries and expenses, created little value.

In reality, the causes of such problems for distributors often include:

a. Compensation systems that fail to match market value of talent; b. Lack of continuous talent development mechanisms, forcing talent to measure only by material standards, leaving ambitious individuals feeling uncertain about the future; c. The company's own development prospects are not particularly clear.

To solve the talent retention problem, distributors must start with their own enterprises:

a. Provide employees with a promising development direction, i.e., the company's survival goals and values. b. Offer employees a sustainable training plan. c. Provide reasonable compensation. As the saying goes, "Small victories rely on wisdom, great victories on virtue; scatter wealth to gather people." This means using virtue and wealth to retain and attract talent.

  1. Large Funding Gaps: At critical moments, money is always severely insufficient.

Many distributors have experienced this: if they could get another million, they could take advantage of manufacturer policies and guarantee a profit for the year, without having to fight tooth and nail to meet sales targets for year-end rebates.

Due to insufficient funds, they can't secure good policies, and during peak seasons, supply can't keep up, watching others make money.

Sometimes, to meet the manufacturer's monthly targets, they have to mortgage houses or cars and borrow money everywhere. Isn't that stressful?

Third: Light Feet. This means chaotic management, which manifests in three main aspects:

  1. Chaos:
  • Confused institutional management: e.g., everything is decided by the boss, and leave or loans depend on the boss's whim.
  • Confused financial management: e.g., unclear accounts with manufacturers, customer debts are just IOUs, goods shipped without accounting entries.
  • Confused inventory management: products not categorized, quantities inaccurate, storage areas messy, and missing goods without explanation.
  • Also, lack of operational systems, no assessment standards, and high hidden costs.
  1. Poor:
  • Poor overall employee quality: everything depends on the boss's direction, lacking initiative, not reporting market changes promptly, just going through the motions.
  • Poor execution: employees listen, look, and then pass on orders without focusing on efficiency.
  • Poor profitability.
  • Poor communication and collaboration with manufacturers, making it hard to get effective support: many bosses either make empty promises or beg for support.
  • Poor attraction and management of downstream customers: lack of control over them.
  1. Scattered:
  • Scattered competitive thinking: following trends, imitating, and trying random solutions.
  • Scattered market and new product information: no collection system, relying on hearsay, internet, magazines, and ads.

II. Development Strategy Hints to Solve the Current Situation:

First: Internal Corporatization. Even the smallest distributor should treat their company as an enterprise, implementing internal corporatization. Don't view your company as just a business department or wholesale department. Internal strength leads to external prosperity.

  1. Some practices for internal corporatization include:

a. Full Delegation: Fully delegate authority to subordinates.

Many liquor distributors hold all power in one person, leading to one-person thinking, unilateral decisions, and micromanagement, resulting in low efficiency, poor decisions, low employee morale, and burnout. Full delegation first 'dismantles' the most primitive family-run operations, like 'husband handles external affairs, wife manages accounts, and relatives help out.'

Full delegation means distributing the boss's authority to subordinates to perform their duties, take responsibility, and complete work most efficiently, achieving high operational efficiency and benefits. Under the advice and guidance of a marketing consulting firm, Mr. Huang distributed his 'one-man' authority to subordinates based on different job positions and content, from managers to terminal sales staff. This boosted employee morale: within reasonable limits, they had the right to use their best methods to complete work, solve problems, and ensure profits.

b. Scientific Division of Labor: Establish work processes and form work groups.

Delegation and division of labor complement each other. Only with scientific division can effective and detailed delegation occur, and for hierarchical and effective delegation, reasonable division is necessary.

c. Systematic Management: Establish a responsibility, authority, and benefit management system.

Once authority is delegated and division is detailed, is the problem solved? The issue is whether delegated authority is effectively exercised and whether detailed division is executed properly. Clearly, the company needs systematic management of responsibilities, authority, and benefits, with quantitative and goal-oriented management, so everyone fulfills their duties, exercises their authority, and contributes their efforts!

d. Key Focus: Distinguish between important and non-important issues, act when necessary, hold on or let go appropriately.

e. Finally, the boss must continuously learn, learn, and learn again! Proactively learn new profit models and keep pace with manufacturer development.

Second: External Branding. Build your own corporate brand image, use the brand to influence manufacturers and customers, and form your own competitiveness.

Some methods for external branding include:

a. Establish genuine interactive cooperative relationships with manufacturers. b. Establish strategic partnerships with manufacturers. c. Create your own successful model market. d. Enhance attractiveness to downstream customers. e. Build your own core competitiveness and brand.

Liquor distributors, especially small and medium-sized ones, will inevitably encounter the above three major problems in daily management. At such times, distributors must focus on internal corporatization and external branding to truly overcome these symptoms and achieve a core position and unique value in the distribution market.

Mr. Wang's Reform.

Mr. Wang is a distributor in a second-tier city in Anhui, representing a liquor brand from a city in East China. Last year, he achieved sales of 17 million RMB in that city. At the company's national distributor commendation conference yesterday, Mr. Wang received high praise and a bonus—he increased sales from 8 million RMB the previous year to 17 million RMB, doubling his performance. The company fully recognized his efforts and awarded him 100,000 RMB on the spot. He was also invited to speak as a distributor representative. He was overjoyed and beaming... making people admire and even look up to him. However, during the meeting, he noticed that many distributors at the same level achieved 30-50 million RMB in sales. What pained him was when he chatted with peers at dinner and in the coffee shop... he suddenly realized that those top-performing distributors didn't work frantically; they worked orderly, relaxed, and even danced or played golf on weekends. Unlike him, who worked all 365 days from morning to night—buying goods, finding sub-distributors, negotiating with stores, managing every sales supervisor and even every terminal salesperson, and worrying about customer deliveries... Mr. Wang felt tired, especially when he thought about how peers with just a few staff easily achieved 30 million. How could he reach 30 million? And when he did, how fast would peers multiply... How could he keep up? Unwilling to admit defeat, Mr. Wang grew more tired and frustrated—he learned from conference reports and peer conversations that to do better, he must treat his wholesale department as an enterprise, implement internal corporatization and external branding, rather than doing everything himself. The era of 'individual heroism' is over.

  1. Full Delegation.

Individual distributors often hold all power, leading to one-person thinking, unilateral decisions, and micromanagement, resulting in low efficiency, poor decisions, low employee morale, and burnout. Full delegation first 'dismantles' the most primitive family-run operations. Full delegation means distributing the boss's authority to subordinates to perform their duties, take responsibility, and complete work most efficiently. Under the advice and guidance of a marketing consulting firm, Mr. Huang distributed his 'one-man' authority to subordinates based on different job positions and content, from managers to terminal sales staff. This boosted employee morale: within reasonable limits, they had the right to use their best methods to complete work, solve problems, and ensure profits.

  1. Scientific Division of Labor.

Delegation and division of labor complement each other. Only with scientific division can effective and detailed delegation occur, and for hierarchical and effective delegation, reasonable division is necessary. For example, with the help of external consultants, Mr. Wang established specialized groups for logistics planning, information collection, promotional publicity, business development, personnel training, salesperson management, and HR management, each with dedicated individuals or teams responsible, ensuring work is done precisely—effectively controlling operational costs and maximizing operational benefits.

  1. Systematic Management.

Once authority is delegated and division is detailed, is the problem solved? The issue is whether delegated authority is effectively exercised and whether detailed division is executed properly. Clearly, the company needs systematic management of responsibilities, authority, and benefits to ensure every authority and task is used and completed appropriately. Mr. Wang selected four managers—sales, promotion, HR, and finance—to jointly take on this responsibility, dividing the systematic management of all personnel and work, implementing and executing to achieve operational effectiveness.

  1. Key Focus.

Does the successful implementation of delegation and division mean Mr. Wang no longer needs to participate in operations? Of course not. It just means he can free up time and energy for learning and improving. In fact, Mr. Wang needs to focus on two aspects: first, the overall team's key focus, like Mr. Wang focusing on the three managers to handle mid-level and small strategies and execution, which is wise; second, Mr. Wang should focus on major projects and big problems in company operations, personally leading the team to solve them—if big and important projects are done well, the company's development is guaranteed, and Mr. Wang's personal transformation is achieved.

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About us: WeChat Name: FMCG Distributor Professional Consulting Management Account Intro: 20 years of FMCG distributor operations experience, specializing in distributor internal management.

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