---
title: "7 Signals That Distributors Fear Most From Manufacturers (Pay Special Attention to #5!)"
description: "Distributors should be alert to seven signals from manufacturers that indicate potential problems, including the resignation of a marketing director, changes in regional managers, frequent policy changes, delayed expense verification, continuous new product launches, unstable liquor quality, and increased frequency of inventory pressure. Each signal requires specific actions to protect the distributor's interests."
author: "柴玉"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-07-14"
language: "en"
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# 7 Signals That Distributors Fear Most From Manufacturers (Pay Special Attention to #5!)

> Distributors should be alert to seven signals from manufacturers that indicate potential problems, including the resignation of a marketing director, changes in regional managers, frequent policy changes, delayed expense verification, continuous new product launches, unstable liquor quality, and increased frequency of inventory pressure. Each signal requires specific actions to protect the distributor's interests.

**_1_** Resignation of the Marketing Director
In liquor companies, the marketing director determines the direction and methods of market operations. Decisions such as whether to aggressively pursue the hotel channel, whether to focus on support for channel partners, how to cooperate with e-commerce platforms, and how to leverage mobile internet are all made by the marketing director. The resignation of the marketing director can significantly impact the implementation of existing marketing policies, as each marketing director has their own approach. During the transition, many policies that distributors are executing may be affected.
Impact Index: ★★★★ Recommended actions for liquor distributors:
**Request a meeting to understand new directions**
Arrange through the regional manager for the new marketing director to visit the distributor's market for research and guidance. This serves to build rapport and understand the company's new marketing principles and directions.

**_2_** Replacement of the Regional Manager for the Market
As the saying goes, "A new emperor brings new ministers." For distributors, it can be said that "each regional manager brings a different business environment." For liquor companies, especially national brands and strong regional brands, the regional manager's importance for external markets may even exceed that of the marketing director. Why? Because the regional manager directly controls the verification and reimbursement of distributor expenses. Once a regional manager leaves, they no longer care about the reimbursement issues of that distributor.
This is related to how liquor companies evaluate regional managers. The performance of regional managers is directly linked to the amount of payments made by distributors. Therefore, a regional manager who has already earned their performance bonus and is being transferred away from the market is unlikely to pay out money that is already in their pocket. New regional managers often do not take over outstanding expense issues, as it is clearly a thankless task.
Impact Index: ★★★★★ Recommended actions for liquor distributors:
**Contact in advance and act promptly to avoid turning unclear accounts into bad debts!**
Distributors should maintain close communication with the regional manager, especially regarding any changes in their position. Once informed of a change, the distributor should immediately visit the liquor company, meet with the marketing director and the former regional manager, and clarify all unverified expenses and related policies. Never leave an unclear account, as it often ferments into a bad debt that no one will take over.

**_3_** Frequent Changes in Market Policies
Frequent changes in manufacturer market policies put distributors in a very passive position. Each policy change requires the distributor's sales team to explain to sub-distributors, leading to complaints and damaging the distributor's customer relationships. It is frustrating for distributors to see years of accumulated goodwill harmed by manufacturer policy changes.
Alert Index: ★★★★ Recommended actions for liquor distributors:
**Take the regional manager to visit the market, analyze and evaluate to choose the right direction**
The wisest approach is to bring the manufacturer's regional manager along to visit customers, letting them hear the complaints of sub-distributors and see firsthand the obstacles that policy changes create for the distributor's sales efforts. If the regional manager is truly market-oriented, they will take action. At the same time, distributors should carefully analyze and evaluate the manufacturer's policies and flexibly choose policies that satisfy the interests of sub-distributors.

**_4_** Delayed Expense Verification
Do not underestimate the issue of "slow expense verification." When a manufacturer delays verification of expenses for distributors, it is either a matter of efficiency or cash flow problems. Either reason indicates that the liquor company is facing operational issues, and these will have a significant impact on the distributor's business. Many distributors have suffered from "low efficiency" of manufacturers: waiting six months for a packaging change; applying for promotional policies, only to have them approved after the holiday has passed; wanting to add a new product, only to find competitors have already sold well and the new product hasn't even been produced yet... If the manufacturer is facing cash flow problems and delays payments, most manufacturers will only push inventory without verifying expenses, eventually leading to cash flow problems for the distributor as well.
Alert Index: ★★★★★ Recommended actions for liquor distributors:
**Communicate more with senior management and control inventory reasonably**
On one hand, seek more opportunities to communicate with senior leaders, using professional advice and innovative methods to attract their attention. Attention from senior leaders can improve the efficiency of matters involving the company. On the other hand, distributors should keep inventory and outstanding payments within reasonable limits to ensure smooth cash flow, even if it means sacrificing some rebates and incentives.

**_5_** Continuous Launch of New Products
Manufacturers launch new products generally for three purposes: first, to increase sales volume; second, to supplement the product line; third, to expand the distributor network. The first two purposes are acceptable, but the third purpose causes unease among existing distributors. After all, the resources a company invests in a particular market are limited. When new products arrive, they compete for the existing distributor's market expenses and market share. Launching new products at the right time and in appropriate quantities can activate the market; otherwise, it can have the opposite effect.
What is "timely"? When a brand has 1-2 leading products in a market and holds more than 30% of the market share in the mainstream price band, it is appropriate to upgrade or extend the product line upward or downward.
What is "appropriate quantity"? The overall marketing budget of the liquor company should be able to "support" a few new products while ensuring the smooth sales of leading products. Only launch as many new products as can be supported.
Alert Index: ★★★★ Recommended actions for liquor distributors:
**Don't panic when new products arrive; look at the "characteristics" before deciding**
For new products launched by the company, consider taking them on if they have the following characteristics: first, they are upgrades or extensions of old, aging products; second, they are the company's strategic new products; third, they are recognized by sub-distributors.
Do not take on products with the following characteristics: first, products that were previously launched but withdrawn from the market; re-launching such products may bring unresolved market issues; second, products that overlap in price with existing products.

**_6_** Unstable Liquor Quality
Well-known national liquor companies and strong regional brands generally do not have this problem, but local liquor companies in non-major liquor-producing areas often face it. Liquor quality and taste are the foundation for a product to establish itself in the market. If there are voices in the market saying "liquor quality is unstable," then the liquor company is in big trouble!
Alert Index: ★★★★★ Recommended actions for liquor distributors:
**Monitor quality changes and provide timely feedback to the manufacturer**
Pay attention to evaluations from sub-distributors and consumers regarding product quality. Once negative feedback appears, collect it and report it to the manufacturer's leadership. If the manufacturer takes it seriously, there is still a possibility of cooperation. If the manufacturer does not care, there is no need to continue cooperation.

**_7_** Increased Frequency of Inventory Pressure
A company that urges distributors to make payments every month is either striving to gain market share or "financing" from distributors to obtain funds for market operations. If it is the latter, using inventory pressure to obtain operating funds will trap distributors in a vicious cycle: "the less the product moves, the less investment; the less investment, the less movement."
Alert Index: ★★★★★ Recommended actions for liquor distributors:
**Be wary of high-frequency inventory pressure; control the pace of payments and purchases**
Distributors should pay sufficient attention to the increasing frequency of inventory pressure from manufacturers and avoid exchanging their hard-earned money for a warehouse full of inventory. Control the pace of payments and purchases, even if it means giving up some rebates and incentives, to keep inventory within reasonable limits and ensure smooth capital turnover.

Source: Jiu Shuo (酒说)
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