Amid fierce market competition, product homogenization is becoming more severe, product profits are getting lower, and costs for personnel, distribution, and maintenance are rising, leaving distributors in unprecedented distress. However, the distributor link cannot be eliminated. I recall in 2010, Jack Ma and Wang Shi made a bet that the internet might replace physical stores, but I believe this will never happen. The two can only advance side by side, complementing each other, competing and supplementing each other, achieving common development. Because distributors, broadly speaking, are an important part of the marketing 4Ps and play a crucial role. So how can distributors grow stronger and bigger in the current environment, and what is the future direction?
- Integrate Resources: Future distributors must be those with strong resource integration capabilities to grow bigger. The stronger your integration ability, the more powerful your future. A distributor without an integration mindset or capability will never grow big. So what exactly should be integrated and how?
An excellent distributor must be able to integrate manufacturer resources, market resources, and channel resources.
What does integrating manufacturer resources mean? To grow stronger and bigger, a distributor must secure and effectively utilize manufacturer support, especially from manufacturers with certain strength. To make a market strong, manufacturers will invest personnel, funds, advertising, and promotional efforts. When I was on a business trip in Guangxi, I met a distributor who was quite strong in supermarkets and channels. At that time, I was still in the stage of recruiting distributors. I presented the manufacturer's biggest advantage—personnel investment—to the merchant, but unexpectedly, the merchant was not appreciative. Instead, he asked, "If the market is also developed by your manufacturer, then what do you need us distributors for? What I need is, if you invest two salespeople, calculate the cost and give it directly to me, let our company operate, and we guarantee to complete the sales volume you want." This is how a distributor integrates manufacturer resources. Generally, every manufacturer has personnel investment in each market. The core issue is whether you can make the manufacturer's personnel your own, plan them reasonably, have them take on multiple roles, and manage them easily.
Secondly, manufacturers with strength are relatively strong in terms of funds. As a distributor, how to leverage manufacturer resources to activate the market is also key. Because distributors carry many brands, every manufacturer hopes to push inventory, but the real reason is not to push inventory but to hope that distributors attach great importance to their products. In such cases, as long as the distributor takes the manufacturer's products seriously, manufacturers generally provide strong support. A distributor in Hunan applied this well. He proposed a plan for the manufacturer to support him with 300,000 yuan in initial stock, and he himself invested 600,000 yuan. Then, for downstream customers willing to invest 50,000 yuan to operate the market, the distributor would provide 20,000 yuan in initial stock. In this way, the manufacturer and distributor contributed 900,000 yuan, but they could leverage 2.25 million yuan from the market. In total, the manufacturer, distributor, and sub-distributors invested 3.15 million yuan to operate the market. From the distributor's perspective, he only invested 600,000 yuan, and the manufacturer only 300,000 yuan, making it easier for both to accept. Distributors generally have large inventories, and the tied-up capital often exceeds 600,000 yuan. Therefore, distributors must have the concept, mindset, and ability to integrate manufacturer, merchant, and market funds.
Thirdly, as a distributor, you must have the ability to integrate market channel resources. It is impossible for a distributor at the prefecture-level city to cover all channels in the area. Those specializing in supermarkets need to build a unique supermarket operation system; those supplying factories have their own supply models, involving many interests and complex relationships. Those supplying restaurants need sufficient financial strength, as large restaurants usually settle monthly, with long cycles and high capital pressure. Those doing distribution need strong delivery capability, financial strength, and a business team. So when a distributor obtains a strong product for distribution, it is crucial to use various channels to make the brand strong in the region. If you lack funds, can you turn downstream customers' money into your own? Can you turn downstream merchants' delivery vehicles into your own? Can you turn business personnel from distributors in various channels into your own? These are the most important. Achieving these is difficult, but those who do will grow big.
- Team is the First Element for Distributors to Grow Stronger and Bigger: There is no perfect individual, only a perfect team. In the 20th century, most distributors grew through opportunities, courage, and capital. At that time, many industries were in short supply, and these distributors succeeded through hard work and diligence. But in the 21st century, competition among enterprises, industries, and distributors is no longer simple; it has risen to a level where "management" is the primary element, and management is mainly about managing people. To grow big, distributors must have professional promotion teams, delivery teams, warehouse management teams, and store sales teams.
I am in the condiment industry, which was traditionally low-end, with relatively low-quality and low-capability personnel. Most were drivers or stock clerks who followed distributors, and over time, as they became familiar with customers, they gradually rose to become distributors, manufacturer managers, or even bosses. In such an industry, the competitive model lags behind the liquor industry. The liquor industry has reached terminal buyouts and strong brand pull, while condiments are still relatively backward, with customers even paying freight and picking up goods. Especially in the condiment industry, if a distributor can build a relatively complete sales team, they will definitely have greater opportunities in the market.
During business trips, I often hear customers say business is slow and difficult. But I believe most manufacturers' performance grows every year, and the catering market is active. Why does this happen? Because times have changed. Over the years, a group of salespeople has emerged. With mature experience, mature thinking, and certain financial strength, they gradually become distributors. Because they come from a sales background, they value sales and have some management ability. So some customers, while you are still a sedentary merchant, may have their customers poached without knowing it.
Therefore, distributors who grow big must have their own professional teams. Only with a team can they provide better service, better product promotion, and better market maintenance. Distributors without a sales team are only waiting for death—waiting for the brand to disappear from their hands and waiting for the market to be eroded.
Owning a Brand is Your Best Business Card: Distributors must choose brands that can grow stronger and bigger, and also be able to grow promising brands. Distributors who only do secondary distribution and have no brand of their own will never succeed, because without a brand, they have no business card. Some distributors say they can grow big in the catering business in Yiyang and make money, but they will never grow big. A strong manufacturer looking for a distributor will not choose one without a network, brand, team, or delivery capability. Manufacturers that choose such distributors are usually small ones. So do you think you can grow big by getting a small brand and relying solely on catering? The answer is no.
Channel Control: Distributors who can control channels are truly high-quality distributors.
Channel control is always the core for distributors. Some distributors often say that manufacturers are unreliable; they either go direct or change distributors, leaving no sense of security or trust. Of course, from one perspective, manufacturers always control the brand, while distributors always control the channel. If a distributor controls the channel, they control the manufacturer, and if a manufacturer controls the brand, they can also control the channel. The two complement each other.
There was a distributor who originally distributed Shisanxiang brand, but due to different business philosophies, conflicts arose, and cooperation ended. However, this distributor had very strong channel control in the market, with over ten delivery vehicles, seven full-time salespeople, and more than 40 employees including delivery and store staff, earning a reputation as a local overlord. Later, this distributor took on a brand called Nande, similar to Shisanxiang. Unexpectedly, in that year, Nande's sales in the area skyrocketed from over 2 million to over 9 million. This proves that as long as a distributor can control sales channels, the manufacturer's product is not the primary factor; the core issue is how strong your control is. Some of our distributors, like those doing Haitian, when manufacturers approach them, say, "We don't lack products now; we need products with a foundation." But conversely, some distributors who grew big only relied on past opportunities and existing brands. If they lose the manufacturer's product due to conflict, they would have no way out. Distributors with super strong control are the high-quality ones.
If a distributor has super strong resource integration ability, sufficient team building, training, and management ability, super strong channel control, and the concept of building brands, then it is impossible for such a distributor not to grow big.
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