Click to read the original text for details. Every distributor has a dream: large scale, more profit, long life, and good living, with continuous sales growth and increasing profits. Reality is cruel; every year, stories of big distributors falling from heaven to hell unfold in the market. In 2017 alone, no fewer than 50 distributors with annual sales of no less than 30 million yuan collapsed nationwide, including distributors for well-known brands such as Master Kong, Yanjing Beer, Yangyuan Drinks, Want Want, and Yili. They were once glorious and influential in the market, but they fell on the road ahead. How did they fall? 1. Distributors reduced to delivery agents, "comfortably dead." Distributor: A merchant who obtains the distribution rights of a brand within a limited area and has control over channels, product sales, and team management. Delivery agent: A merchant who, within a limited area, delivers orders to designated terminal stores according to the manufacturer's requirements and only earns delivery fees. Such distributors share a common trait: they are agents of big, well-known brands. Currently, there is a common trait among distributors in the market: those representing big brands are usually large distributors, while those representing small brands are usually small distributors. Distributor class has solidified: those with sales over 1 billion yuan, around 100 million yuan, at the tens of millions level, and those lingering below tens of millions. The happiest are usually distributors at the 100 million yuan level and above; they have become the bellwethers of regional distributors, gathering well-known brands, with strong teams and strong channel control. The hardest are those below tens of millions or those reduced to brand delivery agents. Development path of a delivery agent: Small distributor → Large distributor → Delivery agent → Bankruptcy. Core competitiveness of a distributor: control over channels. Today's large distributors were usually small distributors in the past, who grew by representing fast-growing or big brands, hitching a ride to become large distributors. They have best-selling brands, good channel relationships, and strong control. These are the characteristics of large distributors. Some distributors representing a single first-tier brand, in the process of development, want to save costs, overly rely on the manufacturer's marketing personnel to develop terminals and take orders, and only deliver goods according to orders. Over time, they gradually lose channel control and become brand delivery agents. At first, such distributors are very happy, but as the manufacturer continuously compresses delivery fees, and as warehousing, labor, and fuel costs increase, delivery agents' profits become thinner and thinner, eventually becoming a chicken-rib business. When they want to transform, they find they have lost channel control and voice, becoming brand porters. They try to take small advantages but end up suffering big losses, like a frog in warm water, comfortably dead. 2. Supermarkets owe distributors money, dragging them to death. On August 22, a distributor in Huaibei, Anhui, died after drinking pesticide and going to a supermarket to demand payment for over 400,000 yuan owed for goods, which had been repeatedly requested but not repaid. He is not the first to do this, nor the last; the business form and development trends determine that such events will happen one after another. There are four mainstream offline channels for food and beverages: circulation, supermarkets, chain convenience stores, and special channels. With the acceleration of urbanization, circulation channels are shrinking, and supermarkets and chain convenience stores have become the first choice for consumers. Their sales share has exceeded 60%! How can one become a mainstream big distributor without doing business with supermarkets and chain convenience stores? Doing business with supermarkets and chain convenience stores inevitably involves: various fees, kickbacks, payment terms, arrears, and even bad debts. As a result, many distributors have profitable financial accounts but are actually losing money. The root cause is that more and more supermarkets and chain convenience stores are dishonest: delivering goods is fine, but payment can wait indefinitely. Thus, distributors fall while waiting for payment. 3. Management costs keep rising, profits keep falling, losing money to death. Distributors with net profit margins above 10% share two common traits: 1. They exist as individual businesses and basically pay no taxes. 2. They have few staff and high per-capita efficiency. In the process of business development, standardized management is the pursuit of every distributor, but many die on the road to standardized management. In the early stages, distributor teams usually have multiple roles: the boss is both chairman and business supervisor, and also a delivery driver; the boss's wife is both financial director, cashier, and accountant. As they scale up, because they need to do business with supermarkets, they must qualify as general VAT taxpayers, so the individual business transforms into a trading company with general taxpayer status. This alone reduces profits by about 1-3%. At the same time, the organizational structure becomes more complete, and staff numbers increase. In the past, one person did the work of two or even three; now one person does the work of one, or even two people do the work of one. It is euphemistically called "each doing their own job." They are not big enterprises, but they suffer from big enterprise disease. They are not Fortune 500 companies, but they configure employees according to Fortune 500 human resource standards. Thus, staff increases, but per-capita sales and profits decline rapidly. With more employees, they begin to improve the office environment. In the past, meetings were held in the warehouse; now they are high-end, working in office buildings. The company needs to give employees a sense of belonging, so they begin to respond to the national call: purchase five insurances and one housing fund for employees. Even more frightening, when products don't sell in supermarkets, they hire temporary promoters. One is not enough, so they hire two. A distributor in Zhengzhou used up to 124 temporary promoters in a month. At the end of the year, sales increased by over 6 million yuan, but they lost over 2 million yuan. The money earned either went to bank interest or to supporting people. So you see bosses driving BMWs and Mercedes, anxious and turning gray overnight. Many employees only see the boss's glory, not the anxiety, hardship, and despair behind it. This type of boss does not die because of management upgrades, but because of a lack of cost accounting awareness. 4. Forced inventory loading kills. Business requires safety stock, but the most feared is malignant inventory, which comes from malignant forced loading. In recent years, many big brands, such as Wahaha and Want Want, have had their large distributors killed by forced loading. There are two types of forced loading. First: Companies set tiered ordering policies. Many distributors, in order to get more rebates, ignore their market's capacity and double their orders, resulting in "picking up sesame seeds and losing watermelons." Second: Companies force loading. This is divided into two types: one is the company's strong requirement, where each month the company directly assigns order tasks and ships goods. The other is that marketing personnel, to complete sales tasks and get bonuses, threaten distributors to load goods. The market is like a human stomach: moderate loading stretches it, but malignant loading bursts it. 5. Trusting their own experience, low sensitivity to new things, dying on the road of consumption upgrade. Common traits of this type of distributor:

  1. Over 55 years old, skilled in large circulation operations, afraid to operate supermarket channels, and not familiar with e-commerce.
  2. Don't use WeChat or Alipay, and don't use modern mobile terminal management systems.
  3. Think they are very successful and only trust their own experience. Experience is very useful in an unchanging market, but in a rapidly changing market, it only misleads your decisions and makes you lose more opportunities. The author has a distributor student from Anhui who only represents first-tier well-known brands and never touches other brands. The problem is that all brands grew from no brand. Secondly, brand popularity has cycles. When a first-tier brand enters a downward cycle, his business also declines rapidly. When your business declines, is it too late to look for seed products? I also know a distributor who does circulation channels. He often warns other distributors: "Don't do supermarkets!" Then he uses cases to tell you how someone lost money doing supermarkets. I believe what he says is true. But the focus is not there; it's why he doesn't study how so many distributors doing supermarkets make money. This type of distributor most resists promoting new products and is most willing to promote best-selling products. Best-sellers solve current profitability, while new products solve future profitability. At the same time, new products developed by companies are also centered around consumer demand and upgrades. Rejecting the promotion of new products means earning now but losing the future. Too many big distributors trust their past successful experience and witness others' success while waiting. As the saying goes: Nokia didn't work hard, and was surpassed by Apple. Banks didn't work hard, and were surpassed by Alipay. China Mobile and China Unicom didn't work hard, and were surpassed by WeChat. Taxis didn't work hard, and were surpassed by Didi. Distributors born in the 60s and 70s didn't work hard, and were surpassed by distributors born in the 80s and 90s while waiting and watching. History is always strikingly similar: the waves behind drive the waves ahead, pushing the front waves onto the beach. What other ways do distributors die? Welcome comments and discussion. Source: Winning Marketing Power (ID: yingxiaoli888) Introduction: Wang Guanqun, top FMCG operator, founder of China's performance growth system, author of "Focus: The New Engine for Performance Growth in the Next 10 Years," and current chairman of Beijing Winning Marketing Power Enterprise Management Consulting Co., Ltd. October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference." We will invite industry experts, FMCG warehousing and distribution specialists, and distributors who have transformed to unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, hoping to bring you different inspiration and thinking! The specific meeting topics are as follows: List of Participating Companies In no particular order Hunan Zonglan Diandan Network Technology Co., Ltd. Jingbang (Wuhan) International Freight Forwarding Co., Ltd. Mengniu Dairy Qinghai Hanxiang E-commerce Co., Ltd. Unilever Service (Hefei) Co., Ltd. Shanghai Branch HC360 Hunan Xuan'ang Food Co., Ltd. Guangzhou Tongdaoren Information Technology Co., Ltd. Qingdao 888 Trading Co., Ltd. Uni-President Enterprises (China) Investment Co., Ltd. Hunan Province Zhongxiang Gongpei Logistics Co., Ltd. Shenglong Ingredients COSCO Shipping Logistics Warehousing and Distribution Co., Ltd. Guangxi Yongpai Liquor Industry Co., Ltd. Shangqiu Kangrong Trading Co., Ltd. Jinan Dingzhong Economic and Trade Co., Ltd. Liaoning Bimai Agricultural Technology Co., Ltd. Kunming Xiongjia Trading Co., Ltd. Shaanxi Houheng Trading Co., Ltd. Guangzhou Dingwo Enterprise Information Consulting Co., Ltd. Shaodong Jiajiale Commercial Firm Boda Trading Industrial Bank Changsha Branch Wuhan Muchen Convenience Store Chain Co., Ltd. Fujian Fuxing Yuncang Logistics Co., Ltd. Guizhou Yilimi E-commerce Co., Ltd. Jiangxi Xiao Laoer E-commerce Co., Ltd. Jinshan Koufu Shanxi Taihang Yuanjing Supply Chain Management Co., Ltd. Shanxi Dezhun Supply Chain Management Co., Ltd. Shaoyang Tongdeli Trading (Xiangbang Logistics) Huanfu Tongda Express City Distribution Beijing Xinjingxiang Food Co., Ltd. Wuhan Huizhong Tianhong Liquor Co., Ltd. Changsha Paide Biotechnology Co., Ltd. Chao'an Tuqiang Guizhou Yihe Bopin Supply Chain Management Co., Ltd. Jiangxi Kang'en Industrial Development Co., Ltd. Xiangtan County Yisuhe Town Yuhua Paper Store Luoyang Yuanlang Trading Co., Ltd. Tongchuan Yaozhou District Huayuan Supermarket Co., Ltd. Hunan Yongfu Jiujiu Trading Co., Ltd. Zhejiang Chengchengtong Logistics Co., Ltd. Chongqing Kaiguo Materials Trading Co., Ltd. Beijing Xianmaixianmai Data Technology Co., Ltd. Hanchuan Qixing Trading Co., Ltd. Tongxin Jiuzhi Trading Co., Ltd. Guizhou Meiguo Guoguo Network Technology Co., Ltd. Hubei Anjie Logistics Co., Ltd. Hubei Kuaixiao Internet Technology Development Co., Ltd. ...... Representatives of Distributor Transformation (Tentative) In no particular order Rong Jun, Chairman of Jiangsu Huashang City Distribution Network Co., Ltd. Wang Bo, Chairman of Hubei Yijiaren Logistics Co., Ltd. Jiang Shuming, General Manager of Sichuan Chengdu Xingrenxing Trading Co., Ltd. Liu Jichen, Chairman of Shandong Yunbang Warehousing and Logistics Co., Ltd. Tu Mingyu, Chairman of Chongqing Lingyu Consumer Goods Supply Chain Management Co., Ltd. Yang Su, Chairman of Guangzhou Zhongshan Wanrong Marketing Co., Ltd. Yuan Xia, Chairman of Sichuan Bajie Supply Chain Management Co., Ltd. Li Qiangyun, Co-founder of Hubei Pengdun Meiyitian Supply Chain Management Co., Ltd. Zhang Jianyong, Chairman of Henan Xuchang Jiulegou E-commerce Co., Ltd. Ma Haichao, Founder of Hebei Changyi Logistics Co., Ltd. Meng Yucun, General Manager of Hebei (Chengde) Wulian Yuncang Co., Ltd. Zhang Xun, Chairman of Xinjiang Urumqi Su'an Jinchi Logistics Co., Ltd. Zhang Hailing, Chairman of Jilin Sansheng Lian'gou Qiang Huitao, Founder of Hebei Dunjie Supply Chain Management Co., Ltd. Liao Lei, General Manager of Hunan Damei Supply Chain Management Co., Ltd. ...... -END-