Go and Check Out Your Competitors Are there many competitors in this city? How are their sales? How do they sell? What are their gross margins? What are their trade terms? What is their personnel structure? Generally speaking, it's best not to cross industries when looking for customers, because the rules of the game differ greatly across industries, and the required personnel qualities are completely different. A distributor that is a "good match" is the most reliable, including: if you are a high-end brand, it's best if the other party is also a distributor of high-end brands; if you are a foreign brand, it's best if they have experience representing foreign brands; if you do skincare, the distributor must also have relevant industry experience, otherwise later communication will be very difficult. Therefore, finding distributors of competitors is a good choice, especially when your trade terms are better than theirs. On one hand, the distributor has operational experience; on the other hand, you can directly grasp competitor dynamics from the source, and then rely on your advantages to defeat them. Of course, this is quite difficult, and distributors generally do not allow such a situation to occur; it can only be left to market survival of the fittest! If your gross margin, expenses, etc., are lower than competitors, it's best to choose agents of other brands in related categories. If we are a high-end brand in the category, we can find distributors that represent mid-to-low-end brands. On one hand, it's easier to reach cooperation; on the other hand, we can help the distributor strengthen the category and enhance their bargaining power in retail outlets, achieving a win-win situation. At this point, you can start collecting information on industry distributors. Suppose I have a high-end toothpaste; I would collect information on all distributors that represent toothpaste in the market. Then, should I just call and schedule meetings? Don't rush! The most critical step hasn't started yet! Walk the Market to Filter Potential Distributors Generally, I evaluate potential customers based on the following factors. These factors are the KPI for the manufacturer's sales staff, but they are also the KPI for distributors, because only when the distributor's KPI is achieved will your KPI be no problem. Distribution There's no other trick: spend a week diligently visiting all large stores, small stores, and wholesale stores, and observe the distribution of the potential distributor's products. The best situation is that all outlets that should have distribution do have it. [Note] Some brands are directly supplied to KA channels. If the brand performs well, it may not necessarily be the distributor's achievement. Distribution capability is a key ability of distributors, especially evident in how quickly new products are distributed. If TV ads for a product are everywhere but the product is never seen at the terminal, it only shows that the distributor's distribution capability is too poor (unless there is no distribution nationwide). Display This is the most intuitive parameter to evaluate a distributor. Local KA and small and medium stores are key reference indicators. But if some large stores are directly supplied by the manufacturer, even if the display is great, it has nothing to do with the distributor. [Note] When looking at displays, mainly look at the main display and secondary displays. Is the main display imposing enough? Are there enough secondary displays (floor stacks, side racks, edge shelves, etc.)? Is the display tidy? Is the stock sufficient? Is the inventory fresh? If all answers are average, then it's worth investigating whether the manufacturer or the distributor has a problem. If 80% of this customer's product displays are good, then it can still be discussed, because it might be due to some manufacturers' shrinking budgets. Incomplete displays are a big taboo; it's likely that the distributor's financial strength is very limited. Promotions Focus on whether the activities of the brands under the potential customer are ongoing (especially competitors), whether the activities are imposing, whether the location is good, whether the gifts are sufficient, etc. Personnel Are there enough promoters? Are they paid by the manufacturer or self-funded by the distributor? Are they trained frequently? How often do merchandisers come? How often do salespeople come? Do more people come from the distributor or the manufacturer? [Note] As brands expand, many large manufacturers directly send a large number of third-party personnel to assist distributors, reducing distributors to logistics and delivery. So sometimes the market is doing well, but it's actually all done by manufacturer personnel; the distributor is only responsible for delivery, and they have few salespeople of their own, and those they have are only responsible for reconciliation. If you are familiar with this market and the company has a lot of personnel support, then it can be considered, after all, using your own people is more comfortable and efficient. But if the company doesn't have many resources to support you and has many requirements for the market, then the distributor's business team is a key parameter. After the market-walking stage, we may delete some distributors, leaving three to five potential customers on the list. Don't rush; invite a familiar buyer or industry insider to dinner to check the reputation of the potential customers. Once you have a general idea, you can schedule meetings. What to Look for in the First Meeting Whether You Click Finding a customer is like finding a partner; you will cooperate long-term. If you always disagree and have different views, later communication will be even more problematic. Office Environment It's not required that the distributor works in a luxury office building, as long as the office is clean and organized. I once saw a customer whose office was at home, with children around, crying constantly, a dirty and messy toilet, goods piled up randomly, and the warehouse often flooded. These are just surface phenomena, but "if you can't sweep one house, how can you sweep the world"? Financial Strength Whether they are rich or not is sometimes hard to tell. Do you think a company representing 30 brands is necessarily stronger financially than one representing 10 brands? Not necessarily! Some distributors pursue one-sided brand expansion, taking on whatever comes their way, and then have to keep increasing loans. With too many brands, but each one underfed, can you expect them to help you meet your targets later? Hard! In fact, financial strength is not about being as big as possible; it's enough if it's sufficient. Personnel Structure Of course, distributors can't compare with big companies. I think the simpler and flatter the personnel structure, the better. Some distributors, in order to learn from big companies, set up marketing, sales, finance, data, HR, administration departments, and general manager, chairman, etc. The marketing department is further divided into new product, display, and other small departments. A customer with annual turnover of no more than 20 million yuan having so many departments results in low efficiency. Don't think this is professional. I would rather have a more direct customer: one sales department, finance, administration, and warehousing handle everything. The sales department is divided by store, with one person responsible for one or several systems, making communication convenient, simple, and efficient, and approval only requires the sales department head's signature. The procedures in retail stores are already numerous; if you have to go through several days of internal processes at the distributor, isn't that delaying things? Employee Age and Gender Ratio It doesn't matter whether salespeople are male or female, but I once saw a customer where, except for the boss who was male, all employees were women, and all were fresh graduates. I secretly thought this distributor was inferiority complex; he was afraid that old salespeople would disrupt the "Garden of Eden" he had worked hard to build. Such an inferiority complex customer is absolutely not acceptable. Future Plans Not to mention "century-old stores," I usually ask distributors what their future plans are. Do they continue as daily chemical distributors? Which brands do they plan to take on? How do they plan to improve their product structure? Do they plan to first do well and stabilize their current brands before taking on new ones, or do they have other plans? Some distributors have lost interest in representing brands and have gradually shifted focus to real estate or home textiles. If you cooperate with them, even if they sign, it will be a hidden worry in the future. Cooperation Intent This should be the top priority. Cooperation also depends on fate. I advise you to give up on customers who are signed reluctantly. If they don't even have interest in cooperation, how can you expect their support later? It's slow and difficult! As a salesperson, you bear tasks like developing the market, improving the market, and meeting targets. Which of these can be done without the distributor's cooperation? Without the distributor's cooperation, everything is zero. Cooperation Model Some distributors have efficient execution teams and want to take the lead, hoping that manufacturer personnel won't contact retail stores at all. It's not that this is impossible, but the prerequisite is that the customer's execution and professionalism have reached a certain level. The most frightening thing is when some distributors lack capability, can't do things well themselves, and still obstruct manufacturer personnel from doing their work. Be a Paparazzo: "Sneak Shot" This Information After the first meeting, you can basically select the distributor, but you still need to investigate the information behind the distributor. If the selected distributor fails to meet more than half of the following conditions, resolutely eliminate them. Boss's Personal Situation From my experience with distributors, the most stable and entrepreneurial group is male-dominated, aged 36-45, married with children, and with young kids. They are in the prime of life, confident, efficient, and communicate well. If you hand the market to them, you can basically rest easy. On the contrary, some distributors over 35, unmarried, childless, or even without a girlfriend, are very dangerous. "Food and sex are human nature." These bosses living a colorless and tasteless life mostly have eccentric and unpredictable personalities. If their humanity is incomplete, what about other aspects? Employee Turnover Rate Both high turnover and extremely stable employee situations are questionable. Instability brings various gaps and lack of smoothness, which greatly affects cooperation. On the other hand, extremely stable employees may indicate an imbalanced internal power distribution mechanism, which is not conducive to deepening cooperation. How They Treat Manufacturer Personnel Good distributors respect manufacturer personnel, communicate frequently, learn from each other's strengths, occasionally have dinners together, chat about industry gossip, enhance mutual understanding, and unite externally, making the market better and better. To put it bluntly, although distributors are on the front line, the resources are provided by the manufacturer. Without manufacturer investment, it's quite difficult for distributors to do it alone. I once saw a customer who always wanted to be above manufacturer personnel. Besides routinely padding expenses and making false accounts, they also threatened manufacturer personnel with various demands. Some even went so far as to settle photocopying and printing costs with manufacturer personnel, which is disheartening. Sometimes it's not big things that break people's hearts, but these common trivialities, and some distributors even gloat over such petty gains! After these four steps of selection, it's hard for your product not to be a hit. 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