---
title: "Analysis and Comparison of Different Types of Distributors"
description: "This article categorizes distributors based on their cooperation with manufacturers and their own business models. It contrasts Type A and Type B distributors in terms of partnership, communication, and integrity, and then contrasts Type C and Type D distributors regarding management style, philosophy, and learning orientation, emphasizing the importance of being a Type A and Type D distributor for success."
author: "赵永杰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-01-27"
language: "en"
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# Analysis and Comparison of Different Types of Distributors

> This article categorizes distributors based on their cooperation with manufacturers and their own business models. It contrasts Type A and Type B distributors in terms of partnership, communication, and integrity, and then contrasts Type C and Type D distributors regarding management style, philosophy, and learning orientation, emphasizing the importance of being a Type A and Type D distributor for success.

Recently, I have simply categorized the distributors I have dealt with over the years into different types. Distributors are important partners for manufacturers. Some distributors are rated as strategic distributors, while others are just ordinary distributors. This rating is not limited or influenced by the size of their business, but is comprehensive and objective, and is based on the premise that all conditions are equal. Why is it that all distributors of a manufacturer have such different situations? This article first introduces two types of distributors (Type A and Type B).

1) Partners vs. Irreconcilable Foes
Type A distributors often regard the manufacturer as a true partner in their business, always aligning with the manufacturer, actively cooperating with the manufacturer's strategy execution, offering suggestions, and growing together with the manufacturer. Under this recognition and background, the distributor's business thrives like sesame flowers blooming higher and higher, and the manufacturer's business also benefits, so the manufacturer is very satisfied with such distributors. In contrast, Type B distributors, from the beginning of cooperation, aim to take advantage of the manufacturer. They view the manufacturer as an irreconcilable foe, treating them as enemies, opposing the manufacturer at every turn, believing that the manufacturer cannot survive without them. They do not efficiently execute the manufacturer's strategies and insist on operating according to their own ideas. In this case, the result is obvious: their own business is mediocre, and the manufacturer has a poor impression of them.

2) Objective Evaluation vs. Subjective Complaints
Type A distributors objectively evaluate the products and brands they operate. If there is profit, they acknowledge it; if the brand is good, they say so; if the manufacturer's policies are correct, they admit it. They are grateful to the manufacturer. When encountering market problems or business difficulties, they objectively communicate these to the manufacturer's sales staff, asking the manufacturer to work with them to find solutions. Together, they brainstorm and pool their wisdom to solve market issues promptly and overcome business difficulties. The manufacturer appreciates the distributor, and the distributor appreciates the manufacturer even more. This is a virtuous cycle of cooperation. In contrast, Type B distributors are completely different. They harbor deep resentment towards the manufacturer. Every time they meet the manufacturer's sales staff (regardless of rank), they are full of complaints. They first cry poverty, saying how hard it is to operate the manufacturer's business, and in the end, it's like drawing water with a bamboo basket—all in vain, and they even fall into the water themselves. They complain that the business doesn't make money but loses money, that other manufacturers provide great support while this manufacturer provides none, that the brand is good but the price is hard to control, or that although the brand is good, other brands (unknown or third-rate brands) have lower prices and higher profit margins... In fact, as manufacturers and salespeople, we all know that this distributor is making money, and the support given to them is the same as to other distributors. The support and service from other manufacturers are not as good as what our manufacturer provides. Our products and brands bring them significant brand effects. This type of distributor is like someone who gets a bargain and then acts smug, complaining subjectively just to extract more benefits from the manufacturer.

3) Act First, Then Talk vs. Talk First, Then Act
Type A distributors, when assisting the manufacturer in expanding the market and growing the business, act first and then talk. They present their market expansion plans and next-step business development plans to the manufacturer, obtain approval, and then execute efficiently. After execution, they present the results and analysis to the manufacturer, who will readily provide corresponding resource support (expenses or other). This is a win-win outcome. In contrast, Type B distributors often put the cart before the horse. They talk first and act later. When the manufacturer asks them to expand the market and develop the business, they stretch out their hands, cross their legs, and leisurely say, "Give me the money first. How can I do it without expenses? Without resources, no one can do it." When the manufacturer tells them to first provide a plan and proposal, and after mutual agreement, support will be given, the distributor says, "Without expense support, making a plan is useless. With expense support, you don't have to worry; I'll do it." If the manufacturer asks them to advance the expenses, they will bargain and argue for a long time, and eventually part on bad terms. If there are both A and B distributors in a region, after a while, B will find that A is doing market activities while B is not. At that point, B starts cursing the manufacturer, complaining about favoritism and unfairness. This leads to a failed outcome.

4) Honesty and Trustworthiness vs. Deception and Fraud
Type A distributors adhere to the principle of honesty and trustworthiness in cooperation with the manufacturer. They work together with the manufacturer to do well in the market, improve business, and genuinely earn a certain profit from reasonable price margins. They invest all resources supported by the manufacturer into the market because they value long-term benefits and gains. Over a year or many years, their profits are substantial, and the manufacturer has full confidence and trust in them. In contrast, Type B distributors often use deceptive tactics to defraud the manufacturer's resources. They take all the support from the manufacturer for themselves and are very stingy with market investment. At the same time, when requesting market investment, they deceive the manufacturer. For example, they claim to have invested 500 yuan when they actually invested 1000 yuan. They think they are clever, but manufacturers are not fools; market performance is the truest reflection. Such deceptive practices cannot last long. These distributors focus too much on immediate petty gains and lack long-term vision and insight. This cooperation is not win-win. In the end, B distributors' business and profits cannot be compared with A distributors.

I hope all distributors can become Type A distributors and preferably not Type B distributors.

In addition to classifying distributors based on their cooperation with manufacturers, they can also be divided into two types based on their own business models and management philosophies (Type C and Type D). Different business models and management philosophies lead to different outcomes for their business development. This is why some distributors who have been in business for over 20 years have accumulated less assets than those who have been in the same business for only a few years.

1) Family-style vs. Non-family-style
Type C distributors, in order to save labor costs and save face, arrange for their family members, relatives, and friends to work for them. Initially, they think this has many "benefits": 1) Trustworthy: they are all relatives and friends, reliable in work and collection. If they hire outsiders, there is no credibility; 2) Cost-saving: many distributors let their rural relatives' children or relatives work for them, providing room and board, and wages are determined by circumstances (definitely lower than external hires); 3) Easy to manage: they think these people will obey their arrangements, be loyal, and work proactively, while external hires would not be so obedient.

However, because Type C distributors have such "good" ideas, it brings them many "benefits": 1) Theft: these relatives' children think the boss trusts them, so they take advantage of their positions to embezzle part of the business revenue or collections, or after working for a while, seeing the boss making money, they run away with the money. At this point, the boss is in distress, but if he tells outsiders, he fears losing face; if he tells his family, he feels embarrassed because they are relatives. Reporting to the police is out of the question since they are acquaintances. In the end, he has to suffer this "benefit" alone. 2) Waste: these people see the boss making a lot of money, but as relatives, they earn less than outsiders, causing psychological imbalance. So they start to squander in many ways, thinking it's not their own business. When they need to entertain for business, they eat and drink extravagantly, then get reimbursed. They also make money by selling at higher prices and pocketing the difference. In the end, the boss has to bear this result foolishly. 3) Laziness and indiscipline: these people think it's their relative's business, making so much money every day, so they don't need to clock in and out on time. They sleep until they naturally wake up, slack off whenever possible, and since they haven't been to the city before, they find it novel and go to internet cafes at night to play games overnight. Even if the boss scolds them, they know he won't do anything. This often leaves Type C distributors at a loss whether to laugh or cry.

In contrast, Type D distributors use a non-family-style approach to personnel management, relying on company systems and performance appraisal mechanisms. Even if there are relatives or friends, they strictly enforce company rules and appraisal systems. This avoids many problems that arise with Type C distributors. Their personnel management and training are very thorough, employee motivation is good, employees have a strong sense of responsibility to the boss, and they proactively create profits for the boss. Such a personnel system and management philosophy meet the requirements, and manufacturers naturally prefer to cooperate with such distributors.

2) Non-philosophical vs. Philosophical
Type C distributors have no philosophy in their operations and management, and no planning. For example, their stores (stalls) do not have good product displays (merchandising). The store is messy, with no planning or philosophy for brand and product display, and they don't understand the importance of product display. Even after several attempts by the manufacturer's sales staff to persuade and train them, they still don't realize the importance. Two years later, the store remains the same, with no good display or arrangement. In contrast, Type D distributors place great importance on product display and presentation. They categorize and display products by brand, manufacturer, specification, etc. The displays are neat and orderly, and products are kept clean. Such professional displays invisibly bring more business opportunities and attract more customers, because product display itself is a silent salesperson.

Let's talk about warehouse management for Type C and D distributors. Type C distributors have no warehouse management philosophy. They pile all products haphazardly in the warehouse without any classification. When told to manage and stack by category, they say, "No need for that trouble. I stack like this because I can remember where each product is." They rarely conduct regular inventory counts. They say, "I manage the warehouse myself, so it can't be wrong. Counting is time-consuming and laborious, so it's unnecessary." Imagine what such warehouse management brings: 1) Some products cannot be rotated on a first-in, first-out basis, causing expiration or unsellable goods; 2) Actual inventory discrepancies are large, because no one can guarantee zero errors in daily shipments over 365 days. If errors occur and there is no regular counting, this situation arises; 3) Low shipping efficiency: when delivering multiple items or large amounts, searching back and forth turns a 30-minute task into an hour; 4) Stockouts or shortages occur because there is no professional management and regular counting, so some best-selling items do not maintain a reasonable safety stock, leading to inability to meet customer demand promptly. In contrast, Type D distributors are skilled at warehouse management. They treat the warehouse as their money bag, more important than anything else, so they invest effort in warehouse management. They hire warehouse staff to manage it, implement simple category management, conduct full inventory counts monthly, promptly resolve discrepancies, and keep records of inbound and outbound goods. Over a year, discrepancies due to the warehouse are minimal. For a distributor with a certain business scale, this is also a significant source of profit. Therefore, warehouse management is crucial for a distributor.

3) Experience-based vs. Learning-oriented
Type C distributors rely on their years of old experience to run their business. The market changes, channels change, but their experience remains unchanged. When they lose money, they complain that the market is bad, the manufacturer is bad, and the products and brands are bad. When they make money, they attribute it to their experience. These distributors have been in business for many years but remain small and earn little. Manufacturers find it tiring to deal with such distributors because when they explain new policies, new business concepts, or new operating models, the distributors won't listen. They think these are empty words, and only their own experience is correct. They don't proactively learn about personnel management, product brand management, channel development and management, or retail development. For example, in their retail channel, they operate based on their experience from a few years ago. No matter what advanced concepts or theoretical knowledge you present, they won't listen. So day after day, year after year, their business develops like a snail crawling (sometimes taking detours, going the wrong way, or losing direction). In contrast, Type D distributors initially rely on experience, but when their business reaches a certain scale, they proactively learn advanced knowledge and attend training/lectures on business management and development. They spend significant money to attend series of lectures by renowned trainers. After each training, they apply what they've learned. For example, I met a distributor who attended a special lecture on employee motivation and immediately implemented it in his company. He started smiling at employees, giving more praise and affirmation, and providing emotional comfort and encouragement to those who were unwell... The distributor told me the effect was very obvious: employees had never seen such behavior, and now they felt the boss's affirmation and care. Their work attitude improved, passion emerged, and within just one month, the company's business and performance grew significantly, and problems decreased. At the same time, performance appraisals were also effective. This type of distributor is learning-oriented, knowing they must keep up with the times and that only learning and continuous innovation can keep them ahead of competitors. So the saying "live and learn" also applies to distributors. Empiricism kills. I hope Type C distributors can promptly discard outdated experience and join the learning ranks, so their business will flourish.

4) Micromanaging vs. Orderly
Type C distributors are micromanagers. They personally handle everything, big or small, important or unimportant, urgent or not. For example, they keep the warehouse key themselves and don't allow anyone else to have it because they don't trust anyone. Even when their business scale has grown, every shipment, regardless of amount, requires them to personally open the door. They can't afford to get sick because then the business would stop. They also personally drive to deliver goods to many small retail stores... In short, the boss personally participates in and completes all tasks. So whenever you ask such a boss, he says he is very busy and tired. In fact, this busyness and tiredness can be completely avoided. When I was developing a new market, I visited a potential client. The boss was leisurely in his office, and his employees were working in an orderly manner. When chatting with him, I asked if he was usually busy. He smiled and said, "Not busy. I have nothing to do every day because I have arranged the work of departments and employees in an orderly manner. I only open my computer to check financial reports and sales reports. I don't manage other things; department managers and employees handle and solve problems." I was a bit surprised because this was one of the few distributors I had encountered. Later, when discussing his business, he talked orderly about his next-step development plans, strategies, and cooperation opportunities with manufacturers... This distributor gave me a good impression. Only such distributors have the time and energy to truly consider and plan the company's development, strategy, and management. The company's prospects are evident. So I hope distributors don't micromanage. Let go of what should be let go, and manage what should be managed. As a boss, grasp the big direction, arrange the details, and you can be relatively relaxed.

5) Untrustworthy vs. Trustworthy
Type C distributors have no credibility in their business operations. A former distributor was of this type. Here's what happened: once, when the company's logistics (third-party logistics) delivered goods to him, due to the logistics company's negligence, they over-delivered several cases of goods worth several thousand yuan. Since both parties had signed for receipt, when the error was discovered and they went to reason with the distributor, he flatly denied it. In the end, the logistics company had to accept the loss. I believe such incidents can happen with many distributors. Such events reflect a distributor's integrity. Although the logistics company couldn't do anything, once a bad reputation spreads, the consequences far outweigh the value of those cases. In contrast, Type D distributors operate with integrity. Once, during a meal, a distributor told me: one of his out-of-town clients (a private boss) over-shipped nearly 20,000 yuan worth of goods. His warehouse staff discovered it and informed him. He immediately called the manufacturer's boss and asked if they had made a mistake in shipping. The manufacturer's boss quickly said, "No mistake, definitely no mistake, because I personally shipped this time. Don't worry." (The private boss was anxious, possibly worried about under-shipping to the client.) The distributor smiled and said on the phone, "Actually, you over-shipped more than 20,000 yuan worth of goods to me. Please check again. If it's correct, I will return the excess goods, or deduct it from the next shipment." Upon hearing this, the private boss was extremely grateful, as he never expected it. In fact, the distributor could have chosen not to inform the other party, but he didn't. This is the distributor's integrity. The benefits of integrity may only be clear to him. Therefore, integrity is the cornerstone of a distributor's successful business.

I sincerely hope every distributor can be like Type D distributors. I believe their business development will be as they wish!

**-END-**

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