---
title: "8 Suggestions for Distributors: Business Is Difficult Every Year, but the 'Difficulty' Differs Each Year!"
description: "Scan the QR code in the image to register. In 2020, many distributors had a hard time. If you survived the past year without falling or being crushed, you should feel fortunate; in fact, you have outperformed many distributors around you. 2021 has officially begun, and although the shadow of the pandemic has almost dissipated, it is estimated that 2021 will not be easy for distributors either. Of course, every year is difficult, but the 'difficulty' faced each year is different. Therefore, this article offers 8 pertinent suggestions from the perspective of distributors."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-03-06"
language: "en"
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# 8 Suggestions for Distributors: Business Is Difficult Every Year, but the 'Difficulty' Differs Each Year!

> Scan the QR code in the image to register. In 2020, many distributors had a hard time. If you survived the past year without falling or being crushed, you should feel fortunate; in fact, you have outperformed many distributors around you. 2021 has officially begun, and although the shadow of the pandemic has almost dissipated, it is estimated that 2021 will not be easy for distributors either. Of course, every year is difficult, but the 'difficulty' faced each year is different. Therefore, this article offers 8 pertinent suggestions from the perspective of distributors.

**Scan the QR code in the image to register**
In 2020, I think many distributors had a hard time. If you didn't fall or get crushed in the past year, you should feel fortunate; in fact, you have already outperformed many distributors around you.
2021 has officially begun, and although the shadow of the pandemic has almost dissipated, it is estimated that 2021 will not be easy for distributors either.
Of course, **every year is difficult, but the 'difficulty' faced each year is different**. Therefore, this article offers 8 pertinent suggestions from the perspective of distributors. I hope we can move forward together, overcoming difficulties.
**-01- About Growth**
Growth is a common topic. Distributor growth is divided into two types: **one is subjective willingness to grow, which is often benign, accompanied by profit growth; the other is forced growth due to pressure from brand owners to increase inventory, which is often malignant, accompanied by profit loss.**
**1. For benign growth, note:**
If regional network coverage reaches over 80%, focus on vertical growth. The method is simple: introduce new products, increase SKU count in outlets, adjust product structure and channel structure. If regional network coverage is below 80%, continue to strengthen horizontal growth, focusing on developing new outlets and optimizing outlet quality.
**2. For malignant growth, note:**
Maintain good manufacturer-distributor relations, understand the assessment content of brand owner personnel. Performance is the lifeline of brand owner personnel. The ideal state is to balance profit and sales so that they are not hungry or are full, but not overstuffed. If it is too malignant and you cannot change it, decisively give up.
**3. Growth should be within your means:**
Don't be a bloated fake. Match your resources: funds, warehousing, distribution, service, etc. Never proactively pursue growth without profit, growth that eats into future resources, or speculative growth.
**-02- About Management**
**Management deals with human nature; human nature cannot be violated.**
Don't just paint empty promises, nor be overly generous with rewards. Maintain a balance: use bonuses as the carrot and the big picture as the stick. Turning management into motivation is the most effective management tool.
Motivation is not to satisfy desires, because human desires are unlimited. **Motivation is to stimulate desires, but ensure 'fairness' and 'authenticity'.**
**For frontline employees, motivation is to achieve the process; for senior employees, motivation is to achieve the goal.**
Individuals are educated; teams are managed. For individuals, focus on work skills and attitudes; for teams, focus on harmony and unity.
Use people's strengths, and everyone is usable; use people's weaknesses, and no one is usable. FMCG is a labor-intensive industry with average pay. Unlike couriers or food delivery workers who use only physical strength, or office workers who use only mental strength, the number of practitioners is decreasing. Cherish the people in front of you.
The core of management is communication. Looking at management methods in FMCG, from command-style management for the 70s/80s generation to consultative management for the 90s/00s generation, communication plays an increasingly important role. If things are discussed openly, there is nothing that cannot be solved; if not, everything is unsolvable.
**-03- About Prediction**
According to multiple consulting agencies, the GMV of community group buying in 2020 was about 100 billion yuan. In early 2021, the news of Xingsheng's $3 billion financing shook everyone inside and outside the track.
In today's information-rich environment, such news is common, and distributors are often led by the nose. They wonder: Can I get a piece of such a large pie? They forget their original intentions and feel restless.
Distributors' predictions of the future determine the company's development strategy. There are countless profitable businesses in the world, but not all are suitable for you. A friend of mine once said: **Entrepreneurship is the monetization of your core competencies; you can never earn money beyond your cognition.** Distributors need to figure out which track offers more space and confidence. If you cannot know yourself and the enemy, stay put. The logic is simple: if the direction is wrong, effort is wasted; if the direction is wrong, staying still is the biggest progress.
**For new models, face them squarely, embrace them, but do not deify them.**
**-04- About Refinement**
I once served a company whose team worked painstakingly on a product. After two or three years, they felt it wasn't working, so they changed the packaging and concept and started from scratch again, repeating the cycle. This loses existing consumer awareness and wastes consumer education costs, time costs, and opportunity costs.
The purpose of refinement is to extend the advantages forged from past successes to the next work goal, turning accumulated experience into future resources. **Unless absolutely necessary, avoid or minimize starting from scratch.** Facts will tell you that in the current business environment, there is almost no chance of success.
Refinement also includes daily work: continuously increase income and reduce expenditure, improve work methods, and enhance company efficiency and personnel performance. **Refinement is not a concept; it is a behavioral habit permeating daily work.**
**-05- About Development**
For distributors, development is like sailing against the current; if you don't advance, you retreat. The boss's vision is the company's ceiling. A company's genes are the boss's personal preferences and abilities, especially for trading companies. The boss's personal factors play a significant role. **For the company to break through, the boss must break through first. Collective wisdom and effort are the driving force for company development.**
As a boss, you must clearly recognize your shortcomings. Your today is the 'long board principle' of the barrel theory; your company's tomorrow is the 'short board principle'.
Don't let your shortcomings become the bottleneck of company development. Go out to learn and discuss more; come back to listen and summarize more.
Many distributors ask: My sales have reached a certain scale; should I first become bigger or stronger? I can confidently tell you: **There is no small but strong trading company; becoming bigger first and then stronger is the only path.**
When you are large enough, you attract attention, including priority in product selection (brand owners will visit you first), priority in resource allocation (brand owners prioritize key customers for resource investment), and priority in talent recruitment (talented people prefer large trading companies). So size is the prerequisite for strength.
Charlie Munger once proposed: **To develop a company, first discuss how it might die. This is a hypothetical reverse thinking of 'place yourself in a desperate situation to survive'. When you summarize all the practices that could lead to bankruptcy and stay away from them, that is the direction for company development.**
**-06- About Digitalization**
More and more people are selling mobile terminal systems, but mobile terminal systems are not digitalization, nor are they the first step in digital transformation. Systems are just tools for collecting data. The core of digitalization is analyzing data to make predictions about the future.
For distributors, if someone talks about digital transformation and starts talking strategy within three sentences, they are definitely fooling you. Don't deify digitalization. Even leading brand owners cannot confidently say they have succeeded in digital transformation; they are still exploring. Armchair strategizing wastes time.
**Distributors' digitalization should start with studying numbers, such as studying your outlet count, outlet output, category share of outlet output, outlet inventory, sales and profit figures, etc. Then find patterns in the numbers and do the math.**
For example: 100 units with 10 free, selling 200 units; 100 units with 11 free, selling 230 units. Which is more profitable? With a sales commission of 5 yuan per unit, what is monthly sales? With a commission of 8 yuan per unit, what is monthly sales? Compare profits and sales staff enthusiasm, choose the best option. Finally, study changes through these numbers, make adjustments, study changes again, adjust again, and formulate the next work plan.
Digital transformation is a gradual process that must be undertaken. Don't expect to become fat in one bite. Currently, no institution has that capability. Cultivating the habit of using data to speak is the first step in digital transformation.
**-07- About Contracting**
Last year, I did many studies and cases on regional contracting. Many distributors asked how to implement regional contracting and wanted to do it this year. The essence of contracting is the delegation of distribution rights. Effectively stimulating people's instincts is more useful than any amount of incentives. My view is:
**1. The regional contracting system and management constraints on contractors are not contradictory; they complement each other.** Just as the main content of Chinese citizens' personal freedom rights is: citizens have the right to act independently within the legal framework without interference, illegal arrest, detention, deprivation or restriction of freedom, and illegal searches. Freedom rights are rights within the legal framework; they are conditional freedom.
Regional contracting is the same: contractors must enjoy contracting rights within certain conditions. These conditions are the 'laws' of the contracting system, including but not limited to 'detailed work' and 'sustainable business'. After all, contractors and distributors want to build a healthy ecosystem and seek long-term interests.
**2. The contracting system is different from the 'hands-off boss' system. Constrained contracting (with the help of mobile terminal systems) activates subjective initiative while firmly controlling the core elements of market operations.**
**3. No system is perfect. Acting according to circumstances and weighing pros and cons is the best strategy.** Others' contracting models are definitely not suitable for you, but you can learn from them. Stones from other hills can polish jade. The contracting model is not about copying but exploring. Suitability and matching are the real principles.
**-08- About the Pandemic**
We are currently in a state of normalized epidemic prevention. With global integration, if the international pandemic is not effectively controlled, there is a possibility of domestic recurrence. For distributors, the pandemic should not be taken lightly, nor should it be the focus of work (after all, business is the top priority).
When thinking about business, one thing must be avoided: **Under normal circumstances, employees are not allowed to go to high-risk areas. If absolutely necessary, they must strictly follow national regulations for testing and quarantine.**
When thinking about business, be prepared for the worst: If your city suddenly has an outbreak and becomes a second Shijiazhuang, is your warehouse inventory reasonable? Are there appropriate channels to digest products? How much impact will the tied-up capital have on your later operations?


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