Small and weak distributors often feel helpless when facing market dumping. If they appeal to the manufacturer for help, the manufacturer often ignores their feedback because of their small size, or merely pays lip service, promising to solve the problem but taking no action—typical thunder without rain. If they retaliate against the instigators of dumping, it often ends in mutual destruction, harming relationships and causing the market to spiral into a vicious cycle of falling prices, making the situation even more unmanageable.
So, what should small and weak distributors do when facing dumping? The following cases may provide some inspiration.
1. Retreat to Advance
Manager Li from City X was a small distributor of Y-brand products in Wuxi, Jiangsu. While steadily operating his market, he suddenly discovered that Y-brand products from a neighboring market had flowed into his territory. Li was an insignificant distributor in the Y-brand manufacturer's eyes, and he knew this well. In this era where the words of the lowly carry little weight, he needed to find his own way to solve the dumping problem.
By checking the product's shipping identification code, Li learned that the dumped products came from the neighboring A market. A market had been operating for many years with mature channels, and its agent, Boss Wang, was a very loyal and exceptionally open-minded person.
Why did dumping occur this time? Was it malicious, unintentional, or natural circulation?
Through his salesperson, Li learned that A market was under great pressure to meet its targets. With limited growth potential, it was possible that Wang was trying to expand outward to alleviate his sales pressure.
So, how should he handle this? Should he directly complain to the manufacturer? Or solve it himself? If he complained to the manufacturer, would his problem be resolved?
He was well aware of his status with the manufacturer. After careful consideration and weighing his options, Li decided to take the initiative and resolve the dispute through his own means.
So, one evening, Li called Boss Wang. After the usual pleasantries, Li praised Wang highly, sincerely expressing his desire to learn from him and hoping to visit him the next day. He didn't mention the dumping at all. Flattered by Li's compliments, Wang agreed to meet and exchange ideas.
The next day, accompanied by the local business manager, Li drove to City A. Upon arrival, he chose a coffee shop near Wang's location and invited him over. Wang was very straightforward and arrived promptly. They started by talking about A city's rapid development in recent years, then moved on to Wang's history of building his business with Y-brand products. Wang spoke enthusiastically, recounting every detail.
Li was truly benefiting from this, nodding and taking notes, which gave Wang a sense of accomplishment. When it was time to eat, Li warmly invited Wang to share a meal—each had a sizzling steak and a "depth charge" (a cocktail). As the alcohol took effect, Li opened up about the difficulties of operating the X market. Seeing this, Wang patted his chest and asked if there was anything he could help with. Li then poured out his troubles, saying that due to A market's excellent performance, some products had somehow flowed into X city, causing chaos in the market price order. He hoped Wang could help coordinate a solution.
Wang immediately responded, saying he would investigate the matter upon his return and ensure it wouldn't happen again. He even asked the manufacturer's business manager to witness his promise, saying he would accept punishment if dumping recurred.
Finally, in a friendly atmosphere, they shook hands and parted. Afterward, no more Y-brand products from A market appeared in X market.
By using the strategy of retreating to advance, Li not only learned from the other party's experience and showed respect but also successfully solved the dumping problem. This shows that using "peaceful" means and indirect tactics can be an effective way to resolve market dumping.
Commentary
The voice of a small distributor is often weak and easily ignored by manufacturers. In such cases, taking the initiative, flattering the dumper, and addressing the issue over a meal can sometimes be a clever strategy. Respecting the other party rather than attacking them is sometimes the most effective way to subdue them.
2. Attack the Mind
Boss Zhao from City Z had been distributing D-brand products for three years. Besides D-brand, he also represented other brands. Due to the many brands and scattered attention, D-brand sales in Z city were not large, and he was still considered a small customer by the manufacturer.
However, the product was showing a growing trend in the market, with more and more second-tier distributors making repeat purchases. This made Zhao very happy, and he wanted to concentrate his resources and energy to expand his business. But one day, while delivering goods in Z city, he accidentally discovered D-brand products from neighboring B city. Upon investigation, he found that the B city distributor was selling to some merchants at prices far below the factory price, even deducting part of the manufacturer's rebates. This troubled Zhao, who had been strictly following the manufacturer's policies.
He learned that the B city distributor, General Lin, was a very shrewd and slick businessman. To profit and gain more favorable policies from the manufacturer, he often engaged in underhanded tactics. What should Zhao do about such a competitor? If he tried a soft approach, it would be useless against a cunning "old fox" like Lin. If he took a hard approach and complained to the manufacturer, he wouldn't gain much advantage either. After much thought, he came up with an idea. Through his salesperson, he obtained Lin's contact information and called him on a Sunday morning. Here is their conversation:
Zhao: Hello, General Lin. I'm a D-brand distributor from Z city, my surname is Zhao.
Lin: Oh, haha, I know, I know. What's the matter?
Zhao: I need to trouble you with something. Recently, for some reason, I've seen D-brand products shipped to our market in Z city, and at low prices. The merchants here are very upset, leading to returns and causing my warehouse stock to become unsellable.
Lin: Oh, really? I'll look into it. This shouldn't happen, right? But don't take it too seriously; maybe it's natural circulation. That's normal.
Zhao: It's not natural circulation; I've already investigated. Look, we're both businessmen. Since the dumping has led to this situation, I might have to make other plans...
Lin: My current plan is this: given the situation, I'm considering giving up the D-brand distribution. But as you know, I have a large stock in my warehouse. I might have to sell it off in some markets. You know, my market is in an expansion phase, so I have to sell quickly at low prices in other markets...
Zhao: Sell quickly? That can't be. This product is growing fast. Don't even think about it. We can solve the dumping problem through negotiation. Maybe it's a misunderstanding. Let me investigate. If it's my goods, I can find a way to take them back. But you can't "smash the pot" and sell your products at low prices in my market. I've worked hard for years to build this market.
Lin: I'm forced into a corner. If you were in my shoes, you'd do the same. So, I have no choice but to consider this.
Zhao: How about this: I'll take back my products and guarantee that my products won't appear in your market again. If they do, you can sell them in my market however you like. Deal?
Lin: Since you've said that, I'll think about it. But you must take back your goods from my market; otherwise, I really have no way out...
A week later, when Zhao went to deliver goods again, he found that the B city products were gone. Later, Lin called to tell him that he had taken back the products and hoped for forgiveness. He also suggested unifying prices and strengthening cooperation to jointly grow the D-brand market. Zhao finally got rid of his biggest worry.
Commentary
In warfare, the best strategy is to attack the mind. By seizing on the dumper's weakness—their fear of retaliation—Zhao gave Lin a psychological hint and threat. To protect his long-term interests, Lin chose to yield and compromise, agreeing to take back the products and promising not to dump again. In this competitive market where the strong prey on the weak, sometimes a little "toughness" can have unexpected effects. As the saying goes, "The bold fear the reckless, and the reckless fear the desperate." There's always something to subdue another.
3. Leverage the Manufacturer's Power
Old Zhang from N County had been distributing the well-known Q-brand product for over a year. Due to fierce market competition, his market was lukewarm, making him a truly small customer for the brand. Yet, even in such a situation, dumping still occurred.
This time, the dumper was the distributor from M City, to which N County belonged. To complete the manufacturer's tasks and earn more rewards, M City, at the same level, began invading surrounding markets, leveraging its radiating influence. N County was already the second market it had dumped into.
What should Old Zhang do? Directly confronting the dumper and asking them to stop would be like asking a tiger for its skin. If he ignored it, the dumper would become even more brazen. After careful consideration, Old Zhang decided to "borrow a boat to sail," i.e., use the manufacturer's power to curb the dumping.
After careful thought, he called Manager Ding, who was in charge of the region.
First, he stated that despite fierce competition and modest sales in N market, he had always been diligent and cooperative with the manufacturer's work, with sales steadily improving. The purpose was to show the manufacturer that although he wasn't a major distributor, he was the most loyal and hardworking.
Second, he revealed the purpose of the call: the M City distributor had started dumping into his market again, disrupting his normal operations and causing chaos. He described the M City distributor as a repeat offender who never learned. This was to inform Manager Ding and complain.
Finally, Old Zhang played his "trump card": Q-brand was a well-known industry brand. If dumping were allowed to spread, not only would the normal market order be undermined and merchants' interests harmed, but it would also damage the manufacturer's reputation, credibility, and trustworthiness, making merchants feel insecure. If this continued, the manufacturer would cease to be a manufacturer, and the merchants would cease to be merchants.
Old Zhang's words were aimed at pressuring the manufacturer by elevating the dumping issue to a higher level, thus attracting their attention. Indeed, Manager Ding expressed gratitude and promised to visit N County soon to investigate and report the matter for resolution.
Half a month later, Manager Ding, to ensure long-term stability in his region, after confirming the dumping facts, decisively punished the M City distributor by confiscating the dumped products and deducting a 3,000 yuan deposit.
Old Zhang achieved his goal of eliminating market dumping by leveraging the manufacturer's power.
Commentary
When a small distributor cannot solve or handle market dumping on their own, they should consider leveraging the manufacturer's power. Having the manufacturer intervene can sometimes resolve the problem quickly, especially for big brands.
Of course, when leveraging the manufacturer, it's important to use certain techniques: make the manufacturer understand the harm of dumping, creating a sense of urgency, and also show your determination to continue, giving the manufacturer hope, so they act quickly to resolve the dispute.
In summary, when facing market dumping, small and weak distributors must consider their own situation and market conditions. Whether resolving it privately or leveraging the manufacturer, they must grasp the right balance—being reasonable and flexible—so they can navigate the dumping and anti-dumping battle with ease and achieve the most satisfactory resolution.
-END-