---
title: "33 Laws for Distributor Development"
description: "This article outlines 33 laws governing distributor development, covering growth, transformation, manufacturer-distributor relations, family business dynamics, and the fate of distributors. It emphasizes the need for distributors to evolve from entrepreneurial to professional management, build strong partnerships with manufacturers, and continuously adapt to market changes to survive and thrive."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-07-24"
language: "en"
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---

# 33 Laws for Distributor Development

> This article outlines 33 laws governing distributor development, covering growth, transformation, manufacturer-distributor relations, family business dynamics, and the fate of distributors. It emphasizes the need for distributors to evolve from entrepreneurial to professional management, build strong partnerships with manufacturers, and continuously adapt to market changes to survive and thrive.

**Warm Tip: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management.**

**Growth Laws**

**Law: The main obstacle to distributor development is the "founder's trap."**

In the early stages of entrepreneurship, the founder's courage and determination are the most primitive forces that support the enterprise's survival in its most fragile state. At this time, the enterprise's growth hinges on the boss's every thought; "I" (the boss) is greater than "we" (the enterprise and all its people), and "we" is determined by "I." The boss's style, charisma, and consciousness decide everything. At this stage, the enterprise's development relies on the boss personally seizing opportunities on the front line, and in a sense, it depends on the boss "playing speculation" and "playing tricks."

When the enterprise reaches a certain scale, it falls into the "founder's trap," where the spiritual strength that once supported the enterprise's development may become an obstacle to its continued growth. Because as the enterprise expands, the relationship between "I" and "we" undergoes subtle changes.

Previously, the boss was the absolute pillar of the enterprise; without the boss, nothing could function. Now, the boss's role has greatly diminished, and many things are done without the boss's knowledge.

Previously, decisions might be made solely by the boss, and even if the boss wanted to consult others, there was no one suitable. Now, a proper decision-making team may need to be formed, and the boss must promote democratic processes.

Previously, the boss's core team consisted of a few loyal "henchmen" who started the business together, and it was common for these henchmen to be "drenched in blood" by the boss's scolding yet still feel proud. In the "gangster-style management" system, being scolded was a form of "favor" from the boss. Now, professionals and professional managers have become the backbone of the enterprise; they can withstand criticism but do not accept being "scolded." A boss of a large enterprise once said, "I can scold those who started the business with me, but I never scold those who wear glasses." His meaning was that intellectuals who wear glasses have thin skin and cannot be scolded.

Previously, the boss managed everything directly, with all policies, systems, plans, profits, and losses stored in the boss's mind. Now, management levels have increased from one to two or three; management requires systems, actions require plans, and profits and losses require accounting.

Previously, the boss's words were the enterprise's rules. Now, the boss must lead by example in following the systems he establishes; otherwise, the systems become ineffective.

The development process of an enterprise is also a process of the boss's importance continuously decreasing. If the boss still indulges in the good feeling of "ruling the world" from the small enterprise era, the boss will become an obstacle to the enterprise's continued growth. Some enterprises have asked us to conduct employee training, and after understanding the actual situation, we often bluntly tell the boss, "Training should start with the boss." For some enterprises that have changed countless subordinates but still struggle to achieve results, our final suggestion is usually "change the boss."

To avoid the founder's trap, the boss must demonstrate a determination when the enterprise reaches a certain scale: the individual is willing to submit to the enterprise. Only when "we" is greater than "I" can the enterprise truly grow and thrive.

In the early stages, the boss is almost the sole driving force for the enterprise's growth. After entrepreneurial success, the boss is likely to become an obstacle to further growth.

In the early stages, the main resource for enterprise growth is not capital but the boss's determination. At this time, the boss is the enterprise, and the enterprise is the boss.

**Law: No grass grows under a big tree. "Hero bosses" often fail to create "hero enterprises."**

Zhang Yue, the boss of Changsha Broad, once said, "When I first started, I found I could do the work of ten or a hundred. But eventually, I realized I couldn't do the work of a thousand or ten thousand." And a hero enterprise must find something that can do the work of ten thousand.

Comparing the "small boss" of a small business and the "big boss" of a large distributor, we find many differences in ability and attitude towards talent.

"Small bosses" are often shrewd, capable, all-around, and indispensable; "big bosses" seem "dispensable" because they don't do specific tasks.

"Small bosses" often do not forgive subordinates' mistakes; "big bosses" often turn a blind eye to subordinates' minor errors. As the old saying goes, "Water too clear has no fish; people too scrutinizing have no followers." Writer Wu Jiaxiang said, "As a superior, you cannot fail to see subordinates' shortcomings, nor can you constantly stare at them. If you don't see them, you may misemploy people; if you constantly stare, you'll have no one to employ." "Small bosses" often like to "show off their talents" to prevent others from underestimating them and to bolster their own courage; "big bosses" often "hide their talents," giving the limelight to subordinates, and their abilities are proven by the enterprise itself.

When "small bosses" encounter subordinates with insufficient ability, they often say, "It's better if I do it myself," so subordinates' abilities may never improve. "Big bosses" either train subordinates to be competent or replace them with competent people.

When "small bosses" find subordinates' work poorly done, they often criticize or even scold them; "big bosses" only criticize if it's a responsibility issue, but if it's an ability issue, they guide and help.

No grass grows under a big tree. The "small boss's" excessive capability is often the reason subordinates are incapable. Those bosses who can "do the work of ten or a hundred" will eventually find they cannot "do the work of a thousand." Therefore, cultivating subordinates and building a team is more important than leveraging the boss's personal talents. "Hero bosses" can only achieve small enterprises; only "hero teams" can achieve large enterprises.

**Law: Without personal involvement, distributors cannot do well. With excessive personal involvement, distributors cannot grow large.**

Distributors rely on intuition to do the market; without personally working the market, they lose that intuition. But if they are in the market every day, they experience "sensory fatigue" and also lose touch with the market—this is the so-called "aesthetic fatigue."

Distributors often make two extreme mistakes: either they are involved in everything, spending all day in the market, equating themselves with a salesperson, or they stay away from the market for long periods, only going to the front line when problems arise.

To grow large, distributors must rely on subordinates to handle the market; the boss alone cannot cover much ground. But relying on subordinates does not mean letting them "cross the river by feeling the stones" without guidance; subordinates need the boss's direction. To direct subordinates effectively, the boss must spend 2-3 days each month personally experiencing the market, not just taking a cursory look.

**Law: For small distributors, standardized management increases costs. For large distributors, non-standardized management increases risks.**

Professionally trained people often cannot do small businesses because they always apply the models of large enterprises to small ones: small scale but many departments, few tasks but many rules. In contrast, those without professional training have fewer rules and processes, handling things flexibly and operating well. However, once the scale grows, distributors find that their old tricks no longer work, and they realize the importance of rules and processes.

Small distributors focus on opportunities because they lack capital; only by seizing opportunities can they succeed. Large distributors must first avoid risks, then consider seizing opportunities. Opportunities are found in chaos, while risks are avoided through processes and systems.

**Law: The number of people a distributor can manage determines the size of the business they can do.**

From the start of entrepreneurship, distributors typically go through the following stages:

Stage 1: Mom-and-pop shop. At this point, sales volume cannot be large; too many customers overwhelm them.
Stage 2: Couple plus helpers. Helpers are mainly relatives, only doing odd jobs, with little effect on market development.
Stage 3: Boss plus salespeople. Sales may expand, but they dare not hire very capable salespeople.
Stage 4: Boss plus sales supervisor plus sales team plus service staff plus accountant. The market can expand indefinitely, with company-style management and professional division of labor.

The development process of a distributor is also a process of increasing personnel, or rather, because personnel increase, business gradually expands. Many distributors fail to grow because they dare not hire people. The reasons for not daring to hire include: first, sales are too small to support them; second, they are unreliable and cannot be trusted, so they only dare to use relatives, fearing excellent salespeople become competitors; third, their abilities are too poor to be useful; fourth, they don't know how to manage or use people.

The actual situation is often: first, it's not that "sales are too small to support them," but that "because you don't dare to use people, sales remain small." Initially, sales may not support new hires, but if you never dare to hire, sales will never increase. Second, many distributors' ideal "capable person" is their own "shadow," leading to the phenomenon: "If their ability is too poor, they're useless; if their ability is too strong, you don't dare to use them."

**Law: Small distributors rely on insight, medium-sized distributors rely on professionalism, and large distributors rely on management.**

Small distributors rely on intuition, instinct, and insight, which come from frontline experience. We often see small distributors with many ideas and tricks.

Medium-sized distributors need professional judgment; without it, they cannot keep pace with industry changes.

Large distributors have accumulated sufficient resources, relying on others rather than themselves, and lack long-term frontline experience, so their intuition and insight diminish. But with sufficient management ability, they can mobilize many employees and fully utilize their intuition and insight.

**Law: Entrepreneurial distributors must either become professional managers themselves or hire professional managers; otherwise, it is difficult to transition from a startup to a normally operating enterprise.**

Liu Bei was an entrepreneurial boss, and Zhuge Liang was a professional manager. Liu Bei never transformed from an entrepreneurial boss to a professional manager, but because he hired Zhuge Liang as a professional manager, he achieved the tripartite division of the world.

Some enterprises are always in the startup stage, managing a scaled enterprise with startup management methods, which certainly cannot make it large.

Enterprises always in the startup stage are always seizing opportunities without accumulating resources to maximize those opportunities.

Enterprises always in the startup stage are always adjusting and trial-and-erroring, without maximizing what has already been proven correct.

Enterprises always in the startup stage are always in the excitement of continuous entrepreneurship, while normally operating enterprises may be plain or even boring.

If a boss addicted to entrepreneurship cannot successfully transform into a professional manager, then the boss should hand over the daily management position to a professional manager and focus on entrepreneurship. Because entrepreneurial success requires the boss, while normal management requires professional managers.

**Law: Only when products have appreciation potential do distributors have operational space.**

Brand-name products sell well but are not profitable; non-brand products are profitable but hard to sell. Almost every distributor faces this dilemma. The solution is to "distribute products with appreciation potential."

When the Hope Group brothers split, Chen Yuxin, the boss of Huaxi Hope, did not use the Hope brand but created a new feed brand "Wanqian." Distributors faced the choice of continuing with "Hope" or switching to "Wanqian." Most chose "Hope," while a few with foresight chose "Wanqian." Since "Hope" and "Wanqian" came from the same origin, the quality was similar, but Wanqian's price was lower, so its appreciation potential was much greater. Some distributors sold the low-priced Wanqian feed at Hope feed prices, thus earning excess profits.

Choosing a product is like choosing a stock: neither high-priced nor low-priced, but potential stocks—those with low current prices but expected to rise in the future.

Only when products have appreciation potential do distributors have operational space and thus profit margins.

**Transformation Laws**

**Law: Business-type distributors have a scale limit, while entrepreneur-type distributors have no limit. If distributors do not transform when reaching a certain scale, they will hit the "ceiling."**

Business-type distributors can achieve "from nothing to something," but only entrepreneur-type distributors can achieve "from small to large."

Business-type distributors can become millionaires or ten-millionaires, but only entrepreneur-type distributors can become billionaires.

Business-type distributors may manage teams of dozens, but only entrepreneur-type distributors can manage teams of thousands or tens of thousands.

Most distributors start as business-type, but those who survive in the end are usually entrepreneur-type. If distributors do not transform, they will inevitably encounter the "ceiling" of growth.

The difference between a businessman and an entrepreneur is not in shrewdness, scale, capital, or profit, but in marketing models, organizational systems, management systems, boss mentality, and management philosophy.

**Law: Distributors that never grow large have a "standard face."**

If the main business is all handled by the boss, such an enterprise is hard to grow.

If customers only recognize the boss and not employees, such an enterprise is hard to grow.

If a few sales champions account for the vast majority of sales, such an enterprise is hard to grow. Because an enterprise with many marketing heroes is doomed.

If the main employees are relatives, friends, or children, such an enterprise is hard to grow.

If the wife and sister-in-law personally manage finances, such an enterprise is hard to grow.

Distributors that cannot grow often scold subordinates for being stupid but do not think about why they are stupid.

**Law: Business-type distributors focus on results; entrepreneur-type distributors focus on process.**

Businessmen often say, "No matter how you do it, as long as the result is good." Whether it's a white cat or a black cat, if it catches mice, it's a good cat.

Entrepreneurs often say, "The result is important, but more important is whether good results can be repeated; only results that can be repeated are good results. That is, a cat that catches mice is not necessarily a good cat; a cat that can summarize the rules of catching mice is a good cat."

**Law: Business-type distributors want "capable people" but also fear them. Entrepreneur-type distributors can use both capable and ordinary people.**

Many distributors have experienced "raising a tiger from a cub, only to be hurt when it grows up," and have a contradictory attitude of both craving and fearing "capable people." "Craving capable people" is because they feel their own abilities are insufficient; "fearing capable people" is because they are afraid they will start their own businesses or become uncontrollable.

Why do business-type distributors fear capable people? Because the capable people they envision are their own "shadows"—people as capable as themselves. Such capable people are strong in solo combat and easily start their own businesses.

Why don't entrepreneur-type distributors fear capable people? Because they recruit professional capable people, each excelling in a specific field, and through their combination, these professional talents can be utilized. Since entrepreneur-type distributors do not use solo-combat talents, even if they leave, it will not have a devastating impact.

**Law: Businessmen often "reward according to merit," while entrepreneurs usually "do not use positions as a reward for meritorious officials."**

How to reward meritorious officials? One way is material rewards, called "compensation." Another is positional rewards, promoting them to leadership, called "empowerment."

Using positions as rewards for meritorious officials may result in "losing a doer and gaining a non-manager." We see that business-type distributors often have meritorious officials controlling "the court." In entrepreneur-type distributor teams, positions are only given to those with ability, not to meritorious officials. Even if someone was once an opponent, if they have sufficient management ability, they may be given an appropriate position.

**Law: Business-type distributors love to stir things up, finding a path through constant "trial and error." Entrepreneur-type distributors often adhere to the belief: "Be cautious before choosing, and persist after choosing."**

Business-type distributors love to stir things up, have many ideas, and the result is often "can't die, can't grow big." Because they love to stir, they always find a way to survive. Because they cannot persist, they cannot do one thing to the extreme.

Entrepreneur-type distributors are very cautious before choosing a path, but once they choose, they will go all out and persist.

**Law: Business-type distributors believe in loyal and reliable people; entrepreneur-type distributors believe in the power of systems.**

"Use people without doubt, doubt people without using." This is a typical characteristic of business-type distributors. Because they achieve this, they can develop rapidly even without sound systems and processes. To achieve this, it also determines that the entrepreneurial team mainly comes from the small circle of past life. Because they know each other well, they can use people without doubt.

When the scale expands, people from the past small circle can no longer meet the needs of enterprise development, so it is necessary to recruit from a wider range. When people come from all over, if you require "doubt people without using," you may have "no one to use."

To achieve "use people despite doubts," you need to establish systems and norms, using supervision, avoidance, and processes to "make it impossible for bad people to find opportunities to do bad things," thus making them de facto good people.

**Manufacturer-Distributor Relationship Laws**

**Law: The source of cooperation is common interests; the foundation of cooperation is common philosophy.**

Distributors naturally want to make money by representing manufacturers' products, but the profits promised by manufacturers are just "a painted cake" that cannot truly "satisfy hunger." Some manufacturers promise anything to distributors, but in the end, distributors get nothing.

What truly makes promises come true is the cooperative philosophy. Only when manufacturers and distributors have similar business philosophies can they cooperate smoothly. With a common philosophy, although there may be disputes, there will be no principled differences.

**Law: Without manufacturer support, distributors find it hard to succeed. If they don't succeed, manufacturers support even less.**

Excellent manufacturers can drive the rise of excellent distributors, but excellent distributors cannot save a collapsing manufacturer. In local markets, distributors may play a decisive role, but in the overall market, manufacturers are decisive.

Distributors often feel that manufacturers don't support them when they haven't succeeded, and after they succeed, they don't need support. So, what determines manufacturer support? It should be the "momentum of market development." Only when manufacturers see hope for success will they support. "Momentum of market development" gives manufacturers hope, so they are not afraid of wasting money.

**Law: The distributors manufacturers are most interested in are not the largest, but those with the most potential.**

"My territory (market scope) is large." "I have many customers." "My sales are high." "I distribute many varieties." These "boasts" may intimidate small manufacturers without ideas, but truly strong and thoughtful manufacturers will question: "Is the territory large, but is the market cultivated finely?" "Are the customers many, but are they high quality?" "Are sales high due to channel crossing or intensive market cultivation?" "Are the varieties many, but is the structure reasonable?" Manufacturers do not look at the present but the future when seeking distributors. Because the present is the result of distributing other manufacturers' products, while the future may be the result of distributing their own products. That is, the existing volume belongs to others, and the increment is their own. Only if distributors still have potential can they build up the manufacturer's products; otherwise, even large distributors are useless. Therefore, when communicating with distributors, manufacturers should talk less about the present and more about the future. The future is the weight to attract excellent manufacturers.

**Law: Large enterprises seek small distributors; small enterprises seek large distributors.**

Large enterprises have strong market operation and control capabilities, so they hope to find "obedient" distributors. They do not require distributors to have special ideas, but they must implement the manufacturer's policies without compromise. Truly thoughtful distributors are always a bit "disobedient." Their main requirement for distributors is capability, because this is work that manufacturers cannot do themselves; other tasks such as new product promotion, market control, and advertising can be handled by the manufacturer. For example, P&G's main requirements for distributors are only three: provide downstream customers, manage downstream customers, and deliver to downstream customers.

Small manufacturers, on the other hand, hope to find large distributors because their market operation ability is poor; they want to hand over products and policies to distributors and then do nothing else, with all other work done by distributors.

**Law: Whenever a manufacturer visits a distributor, the distributor should instinctively think: If you cannot become comrades-in-arms with the manufacturer, you will inevitably become opponents.**

If you represent the manufacturer's products, you and the manufacturer are comrades-in-arms. If other distributors represent the manufacturer's products, the manufacturer is your opponent.

Every distributor does not want a strong manufacturer to become your opponent, because the success of a strong manufacturer means your operational space is compressed. Therefore, whenever a manufacturer's salesperson visits a distributor, the distributor should thoroughly understand the manufacturer's strength and operational approach. If you think the manufacturer will definitely succeed, you must recruit it under your banner. If for various reasons you cannot cooperate with the manufacturer, you must not let the manufacturer cooperate with excellent local distributors; otherwise, you will have no peace.

**Law: Dealing with excellent manufacturers is the hardest; dealing with poor enterprises is the easiest.**

Distributors often face the following confusion: they look down on small enterprises but cannot stand large ones. They hope manufacturers will agree to their conditions readily, but if they agree too readily, they feel afraid.

Ordinary manufacturers, because they have no bargaining power, easily compromise with distributors. Excellent manufacturers compare distributors against standards, so dealing with them is difficult.

Ordinary manufacturers promise anything, getting the money first; excellent enterprises may not make many promises.

Ordinary manufacturers give any policy, not fearing market chaos; excellent enterprises have many rules and regulations, and policies must go through processes.

Ordinary manufacturers' gross margins look high, but can they last? Excellent enterprises focus on the long term, with low but stable gross margins.

Ordinary enterprises sell on credit when they can't sell. Excellent enterprises rarely do credit sales.

Excellent enterprises have their own moral bottom line, being responsible not only to themselves but also to distributors.

Excellent enterprises will not harm consumer interests for short-term gains (e.g., reducing quality or price), because cheating may earn a small profit but cannot make you big.

**Law: Excellent manufacturers are distributors' "mentors." By distributing excellent enterprises' products, you can become an excellent distributor.**

Manufacturers are the most important resource for distributors. Changsha Broad always chooses the best suppliers when purchasing raw materials, because the best way to learn from excellent enterprises is to "become their customer."

Excellent manufacturers do not just sell products; they provide "market solutions" and profit models.

Excellent manufacturers not only use distributors' customer networks but also help expand them.

Excellent manufacturers not only rely on distributors' capabilities but also focus on improving them.

Excellent manufacturers not only assist distributors in sales but also in management.

Excellent manufacturers not only provide sales method support but also export marketing thoughts and concepts.

**Law: To truly gain long-term manufacturer support, you must establish a "good citizen" image.**

Using abnormal means may gain short-term manufacturer support, but only "good citizens" can gain long-term support.

The most important support from manufacturers is not policies but sending people who can obtain policies from high levels. Therefore, distributors must persuade manufacturers to send their best employees to the regional market. Excellent salespeople are more likely to get high-level support than ordinary ones.

Distributors who often "go over the head" may gain some support under high-level pressure, but given the principle that "being an official is not as good as being a manager," the truly decisive supporters may not be at the high level.

In fact, gaining manufacturer support is relatively easy if you meet two conditions: First, do not intercept policies; use them truly for market development, not turning the manufacturer's policies into your own profits. Second, if the manufacturer gives "investment," give the manufacturer a certain "return." Because manufacturers are not afraid of spending money, but they are afraid of spending money without results, falling into the distributor's "policy trap."

**Law: As long as distributors dare to spend 20% of the money to activate the market, manufacturers dare to spend 80%.**

Policy investment is often not a matter of how much money, but of confidence. High-level managers always want to invest money in promising markets. If distributors invest money in market development with actual actions, manufacturers will think distributors have confidence and are willing to provide matching investment. Therefore, as long as distributors dare to invest 20%, manufacturers dare to match with 80%.

**Family Laws**

**Law: Family enterprises are not scary; what is scary is family management.**

The history of distributors' rise is basically the history of their families' rise. Family entrepreneurship has the following benefits: First, family members can work without regard for cost, even without salary, as long as they have food to eat; outsiders cannot do this. Second, family members trust each other, so supervision and restraint are unnecessary, saving management costs. Third, in the early stages when funds are scarce, human resources replace capital to complete primitive accumulation.

If the family tendency at the start of a distributor's business is "unavoidable," then when the distributor reaches a certain scale, the family flavor may become a "growth obstacle."

Family enterprise refers to equity issues, while family management refers to internal management system issues. Equity issues may be difficult to solve, but management issues are relatively easy.

If it is family management, family members usually have "exclusivity," distrusting outsiders. Outsiders often lament that they can never break into the family circle, "even giving their heart won't earn trust."

Family members often operate outside the system, such as "appealing over the head" if dissatisfied with external hires, which may happen through pillow talk, at family dinners, or during family leisure time.

**Law: Relatives may be the most reliable people, but if they lack ability, they are the most terrible people.**

Distributors like to use relatives mainly because they are reliable, but what annoys bosses is that these reliable relatives often do terrible things. If they lack ability, what use is reliability?

Growing a business starts with learning to use capable but unreliable people. Because they are "unreliable," it is necessary to establish management systems, supervision, and restraint. Those who only dare to use reliable relatives will find it difficult to establish truly effective internal management systems. Without the support of internal management systems, it is impossible to truly grow large.

**Law: Distributors may find it difficult to establish a truly modern enterprise system, but it is entirely possible to establish a "family enterprise with a modern flavor."**

It may be difficult for distributors to completely transform from a family enterprise to a modern enterprise. The transformation process is not only painful but may also cause internal turmoil. Therefore, establishing a family enterprise with a modern flavor may be a better transition. That is, family members can be attracted to participate in management, but there must be "institutional restrictions" on their participation: first, family members should be evaluated and appointed on the same merit-based system; second, family members should be required to operate within the system, prohibiting operations outside the system, especially paying attention to the family discipline of "don't talk business in private settings."

**Law: A distributor's transformation usually begins with dismissing the wife and sister-in-law.**

This is the personal experience of many large distributors. Although this is a metaphorical statement, many distributors have indeed done this. As long as the wife and sister-in-law are in the enterprise, the management system is easily undermined.

**Fate Laws**

**Law: The growth process of a manufacturer is a process of continuously eliminating "meritorious distributors."**

The elimination of "meritorious distributors" is a heavy topic, but when manufacturers do not eliminate them and face market elimination themselves, they may have to take drastic measures.

A meritorious official in one period may be a guilty official in another. Aren't those "meritorious managers" and "meritorious salespeople" who made great contributions to enterprise development also continuously eliminated? This seems unfeeling but conforms to the laws of market development. A food enterprise I closely followed changed three batches of distributors in 10 years, almost eliminating a batch every 3-4 years. In fact, this is also the cycle for eliminating "meritorious distributors" in other industries.

Mengniu has a famous "three-stage rocket" theory: the first stage rocket is thrown away after boosting the satellite into orbit, and the second stage continues. After entering space, the second stage is thrown away, and the third stage pushes. Although Mengniu's point is not as blunt as "eliminating meritorious officials," the essence is the same.

Before 1997, the FMCG industry was mainly dominated by provincial-level distributors. After 2000, "provincial agents" nearly disappeared. Now, it is mainly "county agents." If manufacturers do not lower the market center of gravity, they will disappear. To avoid disappearing, manufacturers will definitely eliminate "provincial agents" and "city agents." But when "county agents" grow up, "provincial agents" and "city agents" are hollowed out, and their previous sales of tens of millions or hundreds of millions suddenly vanish.

**Law: Work hard for twenty years, and overnight return to "before liberation."**

The elimination and mortality rates of distributors are very high. How many distributors from 20 years ago still exist? The accumulated wealth often "comes from where and goes to where." Is this the fate of distributors?

Every commercial revolution first revolutionizes distributors. Every time manufacturers lower the market center of gravity, it means a large number of distributors are eliminated or their distribution scope is restricted. Is this an unavoidable "calamity" for distributors?

The industrial concentration of every industry not only eliminates a large number of manufacturers but also a large number of distributors, which is also an unavoidable "calamity" for distributors?

Some distributors say they are in a "five-year cycle." Indeed, from the reform and opening up to now, about five generations of distributors have passed. At a manufacturer's distributor conference, a distributor said, "We top distributors had not entered this industry five years ago, and the top distributors five years ago are either nowhere to be found or not qualified to stand on the podium now."

**Law: The growth process of a distributor is a process of continuously "crossing thresholds."**

Every 3-4 years, distributors must cross a threshold. Those who succeed will have smooth sailing for the next 3-4 years; those who fail will disappear.

Chinese marketing has a marketing change cycle of about 3-4 years. The market environment undergoes qualitative changes every 3-4 years, forcing manufacturers to comprehensively adjust their marketing systems. During the adjustment, marketing directors, regional managers, and salespeople are successively adjusted. Based on the principle of "one dynasty, one court," distributors also experience a 3-4 year adjustment cycle.

**Law: As individuals, distributors may control their own destiny. As a whole, distributors' fate is determined by the times.**

Although distributor associations are being organized across the country, compared with strong manufacturers and strong terminals, distributors as a whole are still a "vulnerable group." Distributors lack their own spokespersons, their own research experts, and their own voice in the media. During the rise of strong manufacturers and strong terminals, distributors always survive in the cracks.

Before the emergence of national distributors, no matter how large the scale of local distributors, in the eyes of manufacturers, they were just a low-level problem to solve.

Although the absolute scale of the distributor group is increasing, the relative scale decline is an irreversible trend.

**Law: The core value of channel distributors lies in their distribution capability; as long as distributors lack distribution capability, they will eventually withdraw from the business stage.**

The "distributor uselessness" theory appeared in the United States in the 1920s, in Japan in the 1960s, and continues to appear in China. The "terminal sales" and "direct sales" trends in China are manifestations of this theory.

The reason manufacturers need distributors is that distributors have the following values: familiarity with local markets, downstream customers, providing financing (cash purchases), political-business relations, and product distribution. Among these, the most important and irreplaceable capability is low-cost distribution capability. In the information age, many things can be achieved through remote control, and anything that can be achieved through remote control can be replaced by manufacturers, but only distribution cannot transcend time and space and must be executed by distributors. This is why manufacturers' terminal sales made a lot of noise but ultimately had to rely on distributors. Therefore, to survive the continuous elimination of "meritorious distributors" by manufacturers, the most important capability for distributors to strengthen is distribution capability.

**Law: Direction determines the future; model determines success or failure.**

Marketing is not always a one-way street. Today's successful experience may be tomorrow's lesson in failure. Therefore, distributors need to adjust their direction periodically.

Only by turning direction into methods and methods into models can you find a shortcut to success. A marketing model is the popularization, standardization, and proceduralization of marketing methods; its role is to enable ordinary people to achieve extraordinary results, rather than letting salespeople "cross the river by feeling the stones."

Models always have prerequisites. When the marketing direction changes, previously effective models become ineffective. Therefore, once a new marketing direction is determined, the old model should be abolished and a new one sought.

Originally published in "Marketing Personnel Survival Manual"

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