---
title: "A Successful Case of a Distributor's Market Operations in Northwest China"
description: "Since China's market economy began, especially after 2015, business has become increasingly difficult due to severe product homogenization. In 2016, the market crisis persisted, and manufacturers launched continuous promotions to boost sales. This article tells the story of Lao Wang, a small distributor in a county in Northwest China, who successfully increased product sales through strategic placement, promotions, motivating sales staff, investing in display cabinets, and building good relationships with stores."
author: "王济保"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-12-25"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/Wrm52F52xm-2Ya0SHxju1w"
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---

# A Successful Case of a Distributor's Market Operations in Northwest China

> Since China's market economy began, especially after 2015, business has become increasingly difficult due to severe product homogenization. In 2016, the market crisis persisted, and manufacturers launched continuous promotions to boost sales. This article tells the story of Lao Wang, a small distributor in a county in Northwest China, who successfully increased product sales through strategic placement, promotions, motivating sales staff, investing in display cabinets, and building good relationships with stores.

Since China's market economy began, especially after 2015, business has become increasingly difficult due to severe product homogenization. In 2016, the market crisis persisted, and manufacturers launched continuous promotions to boost sales before year-end. But with so many products vying for attention, how can consumers choose yours? In other words, how can you increase product sales once your products enter the store?

Lao Wang is a small distributor in a county under a prefecture-level city in Northwest China. He came from his hometown in the south to this economically and transportation-wise underdeveloped city to make a living. Through hard work, he established a foothold in this county, and his business began to improve, though still small: he has three staff including himself, one van, and Lao Wang serves as the driver. He currently represents 7-8 cosmetic brands, mainly facial cleansers, and sales are lukewarm. To increase scale and profits, Lao Wang attended the May 2016 Beauty Expo, where he broadened his horizons, learned about industry trends and consumer demand changes, and made friends with distributors from across the country. At the expo, he found a brand he liked and secured the county agency. After communicating with the manufacturer, his confidence soared. The next day, he transferred the initial payment of 30,000 yuan, and within a week, the products arrived at his rented warehouse. Before that, Lao Wang and his team had been planning how to get the products into three local hypermarkets. The shipment included trial samples, promotion stands, posters, display racks, and display cabinets. The manufacturer covered the entry fees and promotions, and for the first three months, paid the base salary of 1,800 yuan for two promoters, with Lao Wang covering commissions. After three months, both salary and commissions would be borne by Lao Wang.

At this point, Lao Wang and his business manager were planning how to allocate and sell the products.

After analysis, they unanimously agreed that **the first step should be to establish distribution points**: that is, before the hot summer arrives, get the products into retail outlets, especially hypermarkets, securing prime positions, purchasing displays and end caps, and letting the products get "face time" to become familiar. **The second step is to do good merchandising and display** to maximize shelf space and position. **The third step is to conduct targeted promotions**. **The fourth step is to provide good after-sales service**. After setting this strategy, Lao Wang and his team shifted focus to increasing hypermarket sales. Finally, after discussion, they devised several measures to boost sales and began implementation:

**1. Measure 1: Display**
Display is the foundation of product sales in stores; without display, there is no sale. Vivid displays can greatly promote sales. Thanks to good relationships with store staff, Lao Wang's products were placed on prime shelves (i.e., shelves within easy reach, typically the third shelf from the bottom). The new products comprised 3 series and 6 SKUs: 2 anti-acne, 2 oil-control, and 2 refreshing. After negotiations, all 6 SKUs were accepted, each with 4 facings in a block display. The oil-control series was also placed on an end cap near the main aisle.

In addition to end caps and shelves, the business managers placed products at checkout counters and escalators for multiple-point displays, and even used hanging nets in the facial cleanser section.

In the personal care industry, especially in third- and fourth-tier cities, distributors often operate on a "package" basis: small and medium supermarkets outsource their entire personal care section to 1-2 distributors, who pay a fixed monthly fee or a percentage of sales. The distributor has control over product entry, and the store only cares about commissions and performance. If a distributor has such monopolistic resources, promoting new products becomes much easier. Lao Wang had some stores on this package basis, allowing him to tilt resources in-store to quickly push new products to market and into consumers' minds.

**2. Measure 2: Promotions**
In-store, they set up displays and personnel promotions on the main aisle, and ran joint promotions: buy one bottle of facial cleanser and get a small folding fan or mirror, making beauty-conscious customers feel they got great value. Promoters used portable microphones to attract consumers to the display area. Promotions started on Fridays to capitalize on peak foot traffic, especially weekends. The theme was clear: "In the hot summer, [Brand] brings you a cool breeze—come and be surprised." (Trial samples were given to anyone who approached the display, regardless of purchase.) During the promotion, each customer could buy only one product per card, with limited quantities.

Outside the store, Lao Wang funded two temporary promoters with a promotion stand and umbrellas to intercept customers, aiming to be the first point of contact. The focus was on experiential selling—not pushing purchases but letting consumers try the products, feel the service, and remember the brand name. They guided interested customers inside to make purchases. This way, initial consumer communication happened outside, while inside, purchases reinforced the brand impression.

To boost store traffic, Lao Wang also ran a redemption offer with his excess mask inventory. Masks retailed at 10 yuan, cost 3.5 yuan, and with manufacturer support for clearing stock, cost him only 1 yuan. He negotiated with the store to increase foot traffic, and the purchasing manager was happy to oblige: any customer with a receipt of 89 yuan or more could redeem a mask worth 10 yuan. This encouraged shoppers to increase their basket size, raising the store's average transaction value. Lao Wang built better relationships at minimal profit loss, and the purchasing manager could offer him prime positions or even negotiate fees.

**3. Measure 3: Unlocking Promoter Potential**
**Recruitment**
Lao Wang had a senior female staff member who, besides visiting stores, recruited promoters. She had a knack for hiring sales experts based on impression and experience, not looks or education. Many she hired were older and average-looking but excellent at selling. Initially, Lao Wang argued with her about this, but eventually he conceded—she really had a talent. When in a hurry and unable to find experienced staff, she would poach promoters from other companies using her personal connections. She typically hired hardworking, honest people who needed to support their families—those who valued their jobs and had experience.

**Training**
Despite being small, Lao Wang's company had a scientific and effective training system, especially for promoters. New hires underwent 3 days of training: Day 1 on etiquette and details; Day 2 on product knowledge; Day 3 on sales techniques. They were tested at the weekly Monday meeting, and on Saturdays, they received success coaching to build confidence. Lao Wang also reformed the commission system to move away from a simple commission mentality, making promoters work for themselves. He implemented a "contract system" for promoters: based on historical data, each promoter was given a sales baseline; any sales above that baseline earned the promoter 20% of the profit. Additionally, if they became sales pacesetters at year-end, they could share in company dividends or even buy shares. This motivated promoters to sell aggressively without supervision, creating a win-win situation and high loyalty, reducing turnover.

**4. Measure 4: Investing in Display Cabinets**
"Terminal wins, channels rule" has been a mantra for years, but the intensity of terminal competition is especially evident in the personal care industry. To seize terminals, manufacturers measure spaces before stores even open, so by opening day, the personal care section is filled with branded display cabinets, saving stores the cost of buying shelves and earning manufacturers cabinet fees. Lao Wang also adapted by placing image display cabinets in medium and large stores to display and sell products. This ensured product display and built brand image.

Thanks to his good relationships, Lao Wang could often secure two cabinet sets where other distributors got only one: one on an end cap and another next to it, capturing the most powerful positions. In stores with image cabinets, he also assigned a dedicated promoter to boost sales.

**5. Measure 5: Building Strong Relationships**
Lao Wang and his team always prioritized good relationships with stores, as they control the terminals. He proactively engaged with relevant personnel, understanding that store buyers have targets for sales, average transaction value, gross margin, and foot traffic. He helped alleviate pressure on these metrics and often socialized over meals and chats. Over time, buyers would give his products preferential treatment.

Beyond Lao Wang's efforts, his team provided excellent after-sales service during store visits: immediate replacement of damaged products, timely delivery for promotions and regular orders (with advance notice for emergencies), proactive proposal of promotion schedules for soon-to-expire products, and thorough merchandising. They even helped with miscellaneous store tasks, earning goodwill from other vendors' promoters, who would notify them of any issues. Product sales never faced blockages.

With these steps, product sales took off in the local county. Township customers vied to become second-tier distributors, and terminal stores, influenced by hypermarkets, began ordering. Products quickly spread to terminals. Since it was the peak season for facial cleansers, and consumers needed them, the oil-control efficacy made the products popular, bringing a refreshing coolness to the hot summer. Lao Wang seized the moment, negotiating with the largest township stores, buying displays and running promotions. He smiled with satisfaction.

Today's product sales are no longer a seller's market but a buyer's market. Products are no longer the sole attraction; packaging, price, brand, and promotions all matter. Consumer shopping has shifted from material needs to spiritual needs, advocating happy shopping and easy enjoyment. Building consumer loyalty, enhancing product awareness and reputation, and boosting sales and brand equity are essential.

-END-

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