We've been dealing with each other for some time now. As the regional manager of the manufacturer and your friend, I've been in sales for 8 years. During our interactions, I've noticed some issues and formed some opinions. I've categorized distributors into three types and identified nine common problems. Let me share these with you, hoping they help and that our future cooperation will reach new heights.

1. Unclear self-awareness

Type analysis:

A. Startup type: within 2 years in this industry.

Advantages: Young, energetic, and driven; have some customer relationships; mostly start after delivering goods for a while; can endure hardship.

Disadvantages: Insufficient funds, lack of good products, weak patience, confidence easily affected by unfavorable market conditions, and lack of experience in managing channels, warehouses, vehicles, etc.

B. Practical type: 2-4 years in the industry, mostly husband-and-wife teams, with 1-3 vehicles.

Advantages: Have products with some brand recognition, a certain local reputation, relatively healthy market operations, and stable customer relationships.

Disadvantages: Slow to act when good products are available, too much discussion between the two, low efficiency in communication with manufacturers, and often giving conflicting instructions to employees, causing confusion.

C. Management type: Over 5 years of operation, with 3-6 or more vehicles.

Advantages: High prestige and influence locally, represent well-known brands, strong market appeal, some management experience, and relatively sufficient funds.

Disadvantages: When new products are slow to move, they are easily influenced by employee feedback; they rarely visit terminal stores personally, rely on experience to make market decisions, and lack control over the frontline market.

Therefore, it is recommended to position yourself according to your stage of development, gradually build your own brand, and maintain the right mindset for different periods: upward to the manufacturer, middle to employees (products, warehousing, vehicles, funds, etc.), and downward to sales channels (KA, circulation, schools, internet cafes, restaurants, hotels, KTV, industrial and mining areas, etc.) for effective management.

2. Often "brainwashed" by employees or terminal store owners

When considering a new product, you feel you can do it but are not sure, so you continue to communicate with employees and listen to suggestions from small shops. This is not bad, but with many opinions, one person must make the final decision. In business, there is no right or wrong, only win or lose. Also, why are they your employees and downstream channels?

Explanation:

  1. You stand at a different height and see things differently.
  2. Working for wages and having a worker's mindset is the reality for some employees—they want to do less and get more, while you are in business with an entrepreneurial mindset.
  3. Your vision, knowledge, and information are broader than those of employees and small channel owners. Therefore, excellent distributors only brainwash their employees and channels, never the reverse. Vision + execution + persistence will yield results.

3. Searching for products every year, not realizing the current product is a treasure

A few years ago, when Six Walnut was starting its market, some dealers didn't dare to try even a 500-case order. In Henan, there were two distributors for Wen Yu rice noodles. One was approached by Six Walnut's staff many times but remained indifferent, while the other, Mr. Chen, took it on and worked the market steadily. Now his annual sales are in the tens of millions, and he has made a lot of money.

Every manufacturer has strong markets and weak markets. The products you currently represent may also be future big-market products. Since you've chosen them, do the distribution work, consumer activities, employee incentives, and maintain a firm mindset. Stick with it for over a year, and you'll see results. Business is fought, done, and endured.

The standard for a successful distributor: either you've represented a famous brand for over three years with good profits and volume, or you've turned a small or medium enterprise's product into a regional brand. If you have neither, the manufacturer won't truly love you.

4. Over-reliance on the manufacturer

If I sell your product, will you take back expired goods? How many salespeople will the manufacturer send? How much will they pay for supermarket entry fees, barcode fees, promoter wages, and clearance of near-expiry products? Before even stocking, tens of thousands of yuan in costs are gone. Would you do that as a manufacturer? Moreover, can you trust the promises of manufacturer personnel? Without sales support, some salespeople just quit and push the responsibility away. Who will handle the costs that are "bigger than the bun"? Think about it: the manufacturer can provide "ammunition," but the frontline fighters are the distributors.

Only when a "shell" makes a crater will the manufacturer continue. Understand what the manufacturer wants from the distributor and what the distributor wants from the manufacturer. Only then can you manage the manufacturer well. Calmly analyze and strengthen your own network, funds, team, warehousing, vehicles, and services. If you bloom, butterflies will come!

5. Product portfolio not properly combined

Manufacturers have systematic plans for product structure: high-end products build image, mid-range products seek profits, and mass products ensure sales volume. This ensures the manufacturer's reputation and vitality. Distributors should also improve by categorizing products: profit-type, volume-type, long-term type, short-term seasonal type, plus sacrificial products and customer-maintenance products, to ensure business stability.

In today's market, no product offers both volume and profit. Although Wen Yu rice noodles are not a large category, they guarantee a certain level of profit. They can serve as a profit-supplementing product in a distributor's portfolio, with annual sales of 700,000 and profits of 150,000-200,000. They are also a trend product with potential for future explosive growth.

6. Not doing product-consumer interaction activities

Under normal circumstances, market building is divided into outbound rate, distribution rate, and sell-through rate. Outbound rate does not mean high distribution rate; it might just be a transfer to secondary wholesalers, merely moving inventory. Similarly, distribution rate does not mean sell-through rate. Among the "three rates," the most important is sell-through rate. In today's market, with abundant materials and even severe overcapacity in some categories, the entire FMCG industry has shifted from expansion growth to structural growth to squeeze growth, making it increasingly difficult. When are consumers most loyal?

This is a question I've been asked often over my decade-plus in marketing, and there are many answers. Personally, I think consumers are most loyal when they have no choice. But now channels are numerous and wide, making monopoly difficult. Therefore, you must engage in consumer-product interaction. Most distributors, after distribution, just wait for reorders and watch sell-through, resulting in "wait, see, and fail." Think about it: every store has liquor, instant noodles, and beverages. Why should consumers buy your product among the dazzling array?

So, you must do tasting, buy-one-get-one, and other promotional activities. I suggest distributors set up a promotion team, conduct 8 activities per month, and rotate through vegetable markets, supermarket entrances, schools, and fairs. After three months, results will be evident.

7. Build a distribution system monthly

When promoting products, thoroughly address employee enthusiasm and channel willingness. Focus on distribution: share responsibility, rights, profits, and risks. Make actual sell-through the key assessment for employees, design channel profits well, hold mobilization meetings, and create slogans.

During the Liberation War, there was a slogan: "Capture Menglianggu, capture Zhang Lingfu." In modern times, there's also: "Defeat the little Japan, enjoy Aoi Sora." Though just a phrase, its power is not small. Persist in building the distribution system, and it will work well.

8. Process standards not established

In market promotion, how do you do the "Eight Steps to Entering a Store"? Step 1: Greet and introduce; Step 2: Establish common ground; Step 3... Systematize these tasks into standards, enabling those who want to do things to know how, and those who know how to succeed. Establish standards for product promotion, display (including single packs, full boxes, cut boxes, floor stacks), and also for loading, dispatching, and route planning without skipping stores. Have rules to follow.

9. Not persisting in what should be persisted, and persisting in what shouldn't

Principles should be upheld, methods flexible; prices rigid, promotions elastic. What should be defended is the price system; what should be flexible is promotional items; what should be protected is sell-through; what should be changed is service. The only constant is change. Seek constancy in change, and change in constancy. Everything should be oriented toward consumer needs and channel building to establish your own position and build your own product.

-END-

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