Click the image for details. What do distributors care most about when representing a product? Sales volume and profit! Either you move volume, or you get high profit! But high-profit products have low sales, and high-volume products have low profit. Some manufacturers say, "Take our product; our price is not transparent!" Forget it! That's because you don't have money to advertise! Actually, regarding the ups and downs between manufacturers and distributors, clarifying the following is enough! If a product meets the following three conditions, finding distributors will be easy.

  1. Distributors can "win" by doing your product.
  2. Distributors can make money by doing your product.
  3. Distributors can gain growth by doing your product. The order of these three conditions cannot be reversed; importance is 1>2>3. Distributors can "win" This "win" means having brand appeal; consumers will be attracted and rush to buy without much promotion. All distributors in the world are very snobbish (regardless of nationality); they always only want to sell the best-selling, most brand-pulling, easy-to-sell products. All distributors hope that the products they represent will be snatched up by consumers the moment they hit the shelves, and that their products will win bids without being questioned or rejected by the client. All this is because doing this product allows me to "win." Even if the manufacturer's policy for distributors is poor, with only meager profits, even if the manufacturer's market protection is very poor, with rampant cross-regional selling, transparent prices, and dismal profits. No matter how poor the profit, as long as it sells fast and scales up to lower operating costs (labor, rent, reasonable tax avoidance, not issuing invoices to evade taxes, etc.), there is still money to be made. Distributors value turnover rate and cash flow most. Chinese distributors save every penny they can and turn over as fast as possible. So it's not recommended for college graduates to go to trading companies or distribution agencies; the treatment is very poor because in their eyes, you are a cost, not an asset.

Let me give a few examples:

To illustrate how important "winning" is to distributors: Apple's products, whether iPhone or iPad, leave very low profit margins for distributors, around 100 yuan, but countless people in China still fight to become Apple distributors. Why? Because the Apple logo has box-office appeal! I don't make money selling devices, but as long as enough people come to my store for iPhones, I can make money selling power banks, phone cases, and accessories. The most typical example of this business model is the cinema: movie tickets can be discounted heavily due to transparent pricing, but I make money selling popcorn and drinks. The so-called cross-subsidy is the most vivid description for Apple's distributors. Samsung, where I briefly worked, had hot-selling phones and LCD TVs, but distributors for Samsung phones and LCD TVs weren't very profitable (especially LCD TVs, less profitable than domestic brands), yet people still rushed to do it. The reason is still strong brand pull; consumers demand it. A large mall can't not have a Samsung TV, and a digital mall without Samsung seems unreliable. The worst are Japanese camera brands. Market order is chaotic, prices are very messy, and you lose money as soon as you sell. Prices are transparent; if you add a little to the camera, sensitive and cunning consumers will leave. Distributors are angry but dare not speak, just glare in frustration. These manufacturers' attitude is, "Take it or leave it, because consumers recognize us." Why do people still do these Japanese digital cameras? Because the existing market is there; opening a digital camera store still brings in plenty of customers. Selling cameras loses money, but selling lenses, lens caps, batteries, bags, and other peripherals makes money. Examples of Chinese brands that can make distributors "win": Lenovo, with the largest PC market share globally, over 33% in China, and over 50% in Chinese government procurement. Although PC is weakening, Lenovo's major account distributors still fight to get in. Chinese government departments love Lenovo computers. Also Gree. When I had my first job at Midea, people commented on Gree like this: You don't need a sales guide at a Gree air conditioner booth; even a dog could sell them. But this doesn't mean that putting your logo on all products will make distributors buy in, because distributors are smart; they understand consumers and the market. For example, in Samsung's major account department, the best-selling Samsung commercial LED video wall (the number one brand) was easy, but Samsung printers and laptops were the biggest headache for sales; clients didn't want Samsung laptops or printers. Find distributors? Ask distributors to help us sell? Don't dream. Distributors won't do anything for you in times of need! On the client side, in consumer minds, the best laptops are Lenovo, and printers are HP. Even if Samsung quality is great, clients just don't want to use them. At this point, any methods or strategies for developing distributors are useless. The positioning in customers' minds determines that sales won't sell your products. In the FMCG industry, the routine is to bombard with advertising first, occupy consumers' minds, open up market awareness, and then it's relatively easy for manufacturer sales reps to recruit distributors. As a side note, if you are a brand founder and there is already a leading brand in your industry, and your brand is just following without differentiation, failing to leave a deep impression in customers' minds, this business will be extremely painful. If you are a salesperson and you join a company with no brand fame and vague product positioning, your business development will be very difficult. No matter how your leader motivates you, you still won't meet sales targets, and no distributor will want to represent your product. Because distributors are just that realistic; they only sell what can win, or what they feel can win. Distributors make money by doing your product Many new salespeople, when developing distributors, just say, "Our product price is not transparent; doing our product makes money." This is like a loser trying to pick up a girl by only saying, "I have good character, I'm loyal and will never change." If the distributor is a goddess, then this phrase "price is not transparent, guaranteed to make money" is useless nonsense that distributors hear from loser manufacturers every day. Everyone knows it's because you don't have money to advertise. Without brand awareness and consumer attention, your price is not transparent. P&G only gives distributors one point of profit, and distributors obediently do it. That's the arrogance of a big brand. If a manufacturer understands consumers, knows how to play the market, and can make distributors money, that manufacturer will develop rapidly. Take the home appliance and IT industries: domestic brands do better in this regard. They know their brand pull is limited, so they make great efforts in distributor support and market protection. Distributors generally make a lot of money, even more than with foreign brands. That's why in these highly competitive industries, foreign brands don't dominate. Manufacturers with insufficient brand pull will have a hard time initially; they need to spend a lot of effort on the market, first let these distributor bosses taste the sweetness, and then they will start paying and stocking seriously, and then you cooperate to gradually grow the market. This is like a loser chasing a goddess: just bluffing won't work. You need to fix your appearance, find a decent job, and then learn some flirting skills. If your basic conditions are too poor, just relying on clever talk is useless! For example: Lenovo does well in this regard. A distributor who switched from HP to Lenovo told me that Lenovo cares about distributor profits and wins people's hearts. He had represented some foreign brands, and he said those foreign manufacturers and salespeople didn't care about distributors' survival at all, because the brand is big, take it or leave it, and they squeeze one after another. That distributor who switched from HP to Lenovo did 6 million yuan of Lenovo business in 2009, and by 2013 sales rose to 120 million. Without Lenovo's support, he couldn't have grown that fast on his own. In the 1990s and early 2000s, too many people achieved rags-to-riches through Lenovo. Many drove Bentleys, Audis, BMWs, and bought villas. So all distributors worship Liu Chuanzhi like a god. Everyone knows Lenovo has no core technology; PC business is just assembly. If Lenovo didn't have something unique, it wouldn't have become a Fortune 500. Making distributors money should not just be a slogan but actual action. Guo Jingming once said: To make money yourself, you must first let others make money. Finally, how do distributors gain growth? On the basis of meeting conditions 1 and 2, talk about ideals and development with distributors, and that's it. Who doesn't have some spiritual pursuit? With money to make and a pursuit, life is great!