Click to read the original for details. These days, you don't know the cost of rice and firewood until you run a household, and you don't know how hard life is until you try it yourself! It's like the buyer show and seller show of the same dress on Taobao: seeing others wear it looking ethereal, but when you buy it and put it on, you instantly go from school beauty to laughingstock. The same goes for being a distributor. Watching others get a distribution right, open a small storefront, and suddenly have customers coming like clouds and goods turning like wheels, changing houses in one year, cars in two, and a whole new life in three. Then you think to yourself, you're not stupid, not slow, not lazy, so you follow suit and open a store, take on a brand, but before you know it, you're in a miserable state of one year of hard struggle, two years of barely hanging on, and three years of closing down. Both are distributors, both open stores, why is the gap in business so huge!? A distributor's growth history can be roughly divided into the following six steps:
Step 1: Find a good product and choose a new category. Leveraging the product's growth trend, start with a small store and gradually accumulate some savings. At this stage, operating cost pressure is low, and the store's survival depends entirely on the product's natural traffic. Sell as much as you can, and want to sell as much as you want;
Step 2: Start expanding related categories, find ways to get more people to buy, and get buyers to buy more. The result of this step is often an increasing number of products;
Step 3: At a certain stage of development, you realize that just selling products isn't enough; you need to focus on store image and sell at a premium. Start upgrading the store's image, choose brand agency, and focus on product display. At this stage, the store's image improves, and brand awareness begins to emerge;
Step 4: When the store image improves, it means costs increase, requiring a certain volume to cover costs, so increasing store sales becomes a top priority. At this stage, to survive and develop, sales promotion, promotional activities, and marketing campaigns are essential. This is what we often call transitioning from a sitting merchant to a traveling merchant;
Step 5: When the upgraded store survives, and the big store survives, ambitious distributors start thinking about replicating their success model on a large scale. Either start their own chains, franchise, or directly supply retailers. At this stage, there's already a sense of channel management;
Step 6: If you're lucky enough to become a regional power and start to get inflated, most distributors will take one of two paths: one is to extend upward, building their own factories, creating brands, and becoming manufacturers; the other is to seek quick money, investing in real estate, speculating in properties, or even opening bars and KTVs, diversifying widely. At this point, distributors either soar to the sky or fall into hell. At each of these steps, many distributors give up halfway, and every distributor who fails to cross this threshold has a moving story and "back in the day" tales for future generations. Step 1: Without good insight, you're not fit to be a distributor! For entrepreneurial distributors, success depends on insight. This insight is not just about reading people when dealing with customers, but more importantly, about observing peers and products. Insight into peers. Many people become distributors because they see that Wang Laowu next door used to be a poor guy, but after just two years as a distributor, he already has the air of a big boss. Many people jump into the distribution business because of this. They don't know that his store is bustling because his brother-in-law is a powerful figure in some bureau or office; or that even if his store seems empty, he lives comfortably because he does business behind closed doors. If you follow suit and open a store for retail, you're just asking for trouble. Insight into products. For newcomers, the most important thing is choosing which products to sell. Mature products have thin margins and fierce competition, and distributors generally can't easily get them, and even if they do, it's a near-death experience for newcomers. New products and categories have market gaps, but there are many trap products disguised as pie-in-the-sky opportunities, resurrecting in the market. Many new distributors, due to careless product selection, waste their hard-earned startup capital on such "trap products," ending up back where they started after ten years of hard work. Step 2: Without your own cognitive system for products, you're not fit to be a distributor! After surviving the life-and-death startup phase, distributors are most prone to two types of errors when expanding categories: one is pursuing only high-profit, low-price products; the other is overreaching and tearing something. Distributors who have achieved initial success start to gain some confidence in their sales abilities. Their most common saying is: "In my store, my mouth is the brand; whoever I say is a brand, is a brand." If such distributors are strong solo fighters, they are most likely to become general store-type distributors, with many categories and complete product lines, but mostly low-end products. As brand awareness increases and consumption upgrades, these distributors either move to lower-tier markets or wait for death, picking up scraps from the mainstream market, becoming dwarfs that never grow. Of course, there's another scenario: when expanding categories, distributors are greedy for everything, not supplementing with related categories around the successful product, but selling whatever is hot. This is a strategic blindness that many distributors easily fall into, and those who get lost in it now have graves overgrown with weeds two meters high. Step 3: Without an empty-cup mindset and cooperation awareness, you're not fit to be a distributor! At the stage of building brands and image, the distributor's willingness and ability to cooperate become prominent. Today, looking around, most distributors who have a place in the regional market are large or key distributors supported by enterprises. Leaning against a big tree makes it easy to enjoy the shade. Without brand support, distributors not only work hard but also find it hard to make big money. This is why leading companies in the industry become hot commodities. At this stage, whether a distributor can go further depends most on mindset, especially when cooperating with mature brands. Is your past success important? Of course! But if you choose to upgrade your image and brand, it's because your past business model has hit a bottleneck. Since you've chosen to cooperate with formal brand enterprises, listening more, seeing more, and using other companies' experiences and methods is the lowest cost for trial and error in distributor development. Of course, are there companies that are bastards, only pushing inventory and not helping solve problems? Yes, of course, but when choosing to cooperate, you must keep your eyes open, ask peers, visit the market, and look at the company. Once you choose, you must go forward without hesitation. If you hesitate and doubt, you harm yourself and make your employees suffer. Moreover, which company doesn't like distributors with high cooperation? Since cooperation brings support, support brings resources, and resources bring market. Distributor, why do you still waver? Step 4: Without a spirit of adventure and exploration, you're not fit to be a distributor! With image upgrades, operating costs rise, and distributors' demand for sales volume surges. The store's natural traffic can no longer meet development needs. Going from relying on a product's natural traffic and attributes to sustain a store, to going out fully armed to find meat, is a difficult step for many distributors, even though everyone understands the principle of being a traveling merchant. Being a traveling merchant sounds simple, but why is it so hard? Essentially, it's because people have an instinct to seek benefits and avoid harm. Either the store is doing well, and you want to go further to find more traffic; or the store is doing poorly, and you first look for outside opportunities. First, you calculate: there's labor, materials, expenses, and you have to be thick-skinned to beg and plead; then you see: handing out flyers, no one wants them; entering residential areas, they chase you out; finally, you hear others' success stories, which are nothing more than discounts, buy-one-get-one, and recruiting people, no magic tricks. You think it's high investment, high risk, uncertain returns, and you have to lose face. So you think, "Let's just do well in the store first; at least I won't lose my shirt. Let's wait and see, wait and see..." Distributors who die at this step slowly kill themselves with this mindset. Although many who die here think they've tried and it just didn't work, there's a gap of tens of thousands of steps between trying and achieving. We won't discuss that here, as saying too much might seem like attacking their hearts. Step 5: Without the mindset that benefiting others is benefiting yourself, you're not fit to be a distributor! Going from retailer to channel distributor, from managing your own team to managing other distributors, doing chains, franchising, or even opening sub-distributors, is to some extent a process of replicating your success. This replication involves both mandatory promotion and consideration of other distributors' realities; it requires considering the capacity of downstream outlets while maintaining the company's execution standards. So, distributors who can do well as channel distributors are shrewd people, the cream of the crop. From a retailer who deals with consumers to a channel distributor who commands a following, the distributor's vision and pattern should rise to a new level, from winning alone to winning together, from self-interest to altruism. To put it mystically, it's a rebirth of outlook on life and world. The stickiness and service capability to these outlets involve not just money and profit, but also people. The reason Lei Feng's spirit is still relevant is that in the internet age, no one can stand alone. Step 6: Small wealth depends on diligence, great wealth depends on fate; without an entrepreneur's destiny, you're not fit to be a distributor! Speaking of this, it's a bit idealistic. Not everyone needs to become a famous entrepreneur to reach the peak, and not everyone must be rich and noble to be a winner in life. "First fate, second luck, third feng shui, fourth accumulated virtue, fifth study," the success of the sixth step is clearly somewhat idealistic. Among those distributors who extend upward in the supply chain, many are seen, but few succeed, although this goes beyond the scope of distribution; on the contrary, those who made their first pot of gold as distributors and then speculated in real estate or stocks, many still live comfortably today. Of course, this also goes beyond the discussion of distributors. The success or failure of this step: if you succeed, you're the next Zhong Shanshan; if not, you just flashed briefly on the distributor path. So, you think being a distributor is just buying and selling, that simple? Wrong, wrong, you're all wrong! To be a good distributor, you not only need to be good at analysis and understand products; You also need to learn some psychology, not only to figure out others but also to know yourself; You need not only a team spirit of enduring humiliation but also an endless spirit of exploration; Even more, you need a grand vision of "you're good, I'm good, everyone's good," And most importantly, you need—fate! —This article is dedicated to those distributors who didn't complete the 25,000-li Long March! New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 15 to March 18. This conference, we will focus on the topic "Breakthrough" and conduct in-depth discussions with many brand owners, supply chain service providers, distributors, and retailers. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics like channel innovation, city distribution logistics, and distributor transformation, we've added multiple parallel forums on new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail. Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and methods for their own breakthrough in 2019, and returning to the track of high-speed growth. Review of Previous Conferences -END-