---
title: "Choosing the Right Distributor: Make Your Product a Hit!"
description: "Choosing the right distributor can make your product a success, while a wrong choice can lead to failure. To develop distributors, follow these steps: first, study your competitors' distributors; second, walk the market to filter potential candidates; third, evaluate them during the first meeting; and finally, conduct background checks. This systematic approach will help you find a distributor that is a perfect match."
author: "刘春晓"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-09-29"
language: "en"
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# Choosing the Right Distributor: Make Your Product a Hit!

> Choosing the right distributor can make your product a success, while a wrong choice can lead to failure. To develop distributors, follow these steps: first, study your competitors' distributors; second, walk the market to filter potential candidates; third, evaluate them during the first meeting; and finally, conduct background checks. This systematic approach will help you find a distributor that is a perfect match.

A suitable distributor can double your results with half the effort, while a wrong one can do the opposite. How to develop distributors? Follow these steps.

**Look at Competitors**
In the city, are there many competitors? How are their sales? How do they sell? What are their gross margins? What are their trade terms? What is their personnel structure?
Generally, it's best not to look for clients across industries, because the rules of the game differ greatly, and the required personnel qualities are completely different. To adapt to each other as quickly as possible, finding a "well-matched" distributor is the most reliable.

"Well-matched" includes: if you are a high-end brand, ideally the distributor also represents high-end brands; if you are a foreign brand, it's best if they have experience with foreign brands; if you do skincare, the distributor must have relevant industry experience, otherwise later communication will be very difficult.

In summary, finding a competitor's distributor seems like a good choice, especially when your trade terms are better than the competitor's. On one hand, the distributor has operational experience; on the other, you can directly grasp competitor dynamics from the source and then use your advantages to defeat them. Of course, this is difficult, and distributors generally don't allow such a situation, so it's left to market survival of the fittest!

If your gross margin, expenses, etc., are lower than competitors, it's better to choose agents of other brands in related categories. If we are a high-end brand in the category, we can also find distributors who represent mid-to-low-end brands. This makes cooperation easier and helps the distributor strengthen the category, enhancing their bargaining power in stores—a win-win.

At this point, you can collect information on industry distributors. Suppose I have a high-end toothpaste; I would gather information on all distributors representing toothpaste in the market. Then, should I call to schedule meetings? Don't rush! The most critical step hasn't started yet!

**Walk the Market to Filter Potential Distributors**
Generally, I evaluate potential clients based on the following factors. These are the KPIs for the manufacturer's sales staff, but they are also the distributor's KPIs, because only when the distributor's KPIs are met can your KPIs be achieved.

**Distribution**: There's no other way; spend a week visiting all large stores, small stores, and wholesale stores to observe the potential distributor's product distribution. The best scenario is that all outlets that should distribute the product do so.

Note: Some brands implement direct supply to KA channels, so a brand's success may not always be the distributor's achievement. Distribution capability is a key ability of distributors, especially evident in how quickly new products are distributed. If a product's TV ads are everywhere but it's never seen in stores, it only shows the distributor's poor distribution capability (unless there's no distribution nationwide).

**Display**: This is the most intuitive parameter to judge a distributor, but if some large stores are directly supplied by the manufacturer, even great displays have nothing to do with the distributor. Local KA and small/medium stores are the key reference indicators.

Note: When looking at displays, focus on primary and secondary displays. Is the primary display impressive? Are there enough secondary displays (floor stacks, side racks, edge shelves, etc.)? Are the displays tidy? Is stock sufficient? Is inventory fresh? If everything is average, it's worth investigating: is it a manufacturer problem or a distributor problem? If 80% of this client's product displays are good, it's still negotiable, because it could be due to reduced manufacturer funding. Incomplete displays are a big taboo; it likely indicates the distributor has limited financial strength.

**Promotions**: Focus on whether the brands under the potential client (especially competitors) have ongoing promotions, whether they are impressive, whether the location is good, whether there are enough gifts, etc.

**Personnel**: Are there enough promoters? Are they paid by the manufacturer or self-funded by the distributor? Are they trained regularly? How often do merchandisers come? How often do sales reps come? Are more people from the distributor or the manufacturer?

Note: As brands expand, many large manufacturers send a large number of third-party personnel to assist distributors, reducing distributors to logistics and delivery. Sometimes the market looks good, but it's actually the manufacturer's personnel doing the work; the distributor only handles delivery and has few sales reps, mostly for account reconciliation. If you know the market and the manufacturer provides substantial personnel support, it's worth considering, since your own people are more reliable and efficient. But if your company has little resource support and high market demands, the distributor's sales team becomes a key parameter.

After walking the market, you may eliminate some clients, leaving three to five potential distributors on your list. Don't rush; invite a familiar buyer or industry insider for a meal to gauge the reputation of the potential clients. Once you have a good idea, you can schedule meetings with them.

**What to Look for in the First Meeting?**
When meeting new clients for negotiation, I focus on:

**Personal Chemistry**: Finding a client is like dating; you'll be working together long-term. If you always disagree and have conflicting views, later communication will be even more problematic.

**Office Environment**: I don't require distributors to work in luxury office buildings, but the office should be clean and organized. I once saw a client whose office was at home, with children around, crying constantly, a dirty and messy bathroom, goods piled randomly, and a warehouse often flooded. These are just surface phenomena, but "if you can't sweep a room, how can you sweep the world?"

**Financial Strength**: Whether they have money is sometimes hard to tell. Do you think a company representing 30 brands is necessarily stronger than one representing 10? Not necessarily! Some distributors pursue brand expansion blindly, taking on anything, leading to continuous loans. With too many brands, none get enough attention. Can you expect them to help you meet targets later? Hard! In fact, financial strength isn't about being as large as possible; it's about being sufficient.

**Personnel Structure**: Distributors naturally can't compare with large companies. I believe the simpler and flatter the structure, the better. Some distributors, to imitate large companies, set up departments like marketing, sales, finance, data, HR, administration, and general manager's office, with sub-departments under marketing like new products and display. A client with annual revenue under 20 million yuan having so many departments results in slow efficiency.

Don't think this is professional. I'd rather have a more direct client: a sales department, finance, administration, and warehousing handle everything. Under sales, people are assigned by store, with one person responsible for one or several systems. This makes communication easy, simple, and efficient. Approval only requires the sales head's signature. Retail stores already have enough procedures; if the distributor's internal processes take days, it will delay product launches.

**Employee Age and Gender Ratio**: The gender of sales reps doesn't matter, but I once saw a client where the boss was the only man, and all employees were women fresh out of college. I suspect this distributor is insecure, afraid that experienced sales reps would disrupt his carefully built "Eden." Such insecure clients are definitely not acceptable.

**Future Plans**: Not to mention "century-old stores," I usually ask distributors about their future plans: What brands do they intend to take on? How do they plan to improve their product portfolio? Do they intend to 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 shifted focus to real estate or home textiles. If you cooperate with them, even if they sign, it's a hidden worry.

**Cooperation Intent**: This should be the top priority. Cooperation also depends on fate. If a client signs reluctantly, I advise you to give up. If they have no interest in cooperating, can you expect their support later? It will be slow and difficult! As a salesperson, you have tasks like developing the market, improving it, and meeting targets—all of which require the distributor's cooperation. Without their cooperation, everything is zero.

**Cooperation Model**: Some distributors have efficient execution teams and want to take the lead, preferring that manufacturer personnel not contact retail stores. That's not necessarily bad, but only if the client's execution and professionalism have reached a certain level. The worst are distributors who lack capability, can't do things well, and still obstruct manufacturer personnel.

**Play Detective: "Sneak" This Information**
After the first meeting, you can basically select a distributor, but you still need to investigate the background information behind the distributor. If the selected distributor fails more than half of the following conditions, resolutely eliminate them.

**Boss's Personal Situation**: From my experience with distributors, the most stable and entrepreneurial are male-dominated, aged 36-45, married with children, and with young kids. They are in the prime of life, confident, efficient, and communicative. You can trust them with the market. Conversely, distributors over 35, unmarried, childless, or even without a girlfriend are dangerous. As the saying goes, "food and sex are basic human needs." Those who lead a colorless and tasteless life often have eccentric and unpredictable personalities. If they lack basic humanity, how can they handle other things?

**Employee Turnover**: Both high turnover and extreme stability are questionable. High turnover leads to various gaps and inefficiencies, affecting cooperation. Extreme stability may indicate imbalanced internal power distribution, hindering deeper cooperation.

**How They Treat Manufacturer Personnel**: Respecting manufacturer personnel, communicating often, learning from each other, occasionally having meals together, chatting about industry gossip, enhancing understanding, and uniting externally—this leads to a better market. To put it bluntly, although distributors are on the front lines, resources come from the manufacturer. Without manufacturer investment, it's hard for distributors to succeed alone.

I once saw a client who always wanted to dominate manufacturer personnel. Besides fabricating expenses and cooking the books, they threatened manufacturer personnel with various demands. Some even went so far as to charge for photocopying and printing, which is disheartening. Sometimes it's not big things that break people's hearts but these common trivialities. Yet some clients are smug about such petty gains!

After these four steps, the distributor you select for your product will surely make it a hit.

**-END-**

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