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Modern society is increasingly open, and information spreads rapidly. Corporate structures are growing larger, and professional specialization is becoming finer. The era of going it alone is over.

Therefore, to succeed, one must leverage the power of others, not just rely on hard work. Maximize the integration of all available external resources to improve efficiency and quickly achieve goals. This is the essence of "getting wool from a dog" (i.e., making others pay).

The liquor industry is still undergoing adjustment. Although the industry is reforming and the mindset of liquor professionals is shifting, overcapacity, shrinking demand, depleted resources, and rising marketing costs cannot be shifted through other means. Major manufacturers and dealers have created severe market obstacles for themselves, engaging in intense market investment and resource battles. As a result, even genuine liquor enterprises have little "wool" left to pull. In such an environment, attempts to change business models alone cannot turn the tide.

On the other hand, liquor terminals have perfected the "wool from a dog" approach at the expense of liquor companies and dealers, and it's escalating. Most terminal merchants don't raise sheep and shear wool; they pluck wool from any sheep they see, and some even flay the sheep if there's no wool. A private room costing 10,000 yuan, a hotel or supermarket demanding hundreds of thousands of yuan—these are facts, not myths. Although consumers generally accept this as a legitimate way to make money, forward-thinking merchants and entrepreneurs understand that resources create wealth and avoid short-sighted, self-defeating tactics. Liquor terminals, however, have committed this cardinal sin.

This stems from liquor companies' general lack of strong brands to counter terminal merchants, leaving them with insufficient bargaining power and no leverage at the negotiating table. The key is for companies and dealers to strengthen themselves, creating "buying points" that others need and becoming the "dog that provides wool."

In my view, the only solution is to break existing profit models, integrate resources across multiple directions, and innovate profit models so that "wool comes from a dog."

To resolve this dilemma, we need to consider two aspects:

First: How to integrate resources and links within the industry. That means breaking through the traditional cost-pass-through model, innovating or deriving new products. Stop shifting costs to consumers and the market, stop making "wool come from sheep," and achieve a true win-win-win for manufacturers, merchants, and consumers.

Second: How to integrate external resources. This involves cross-industry resource integration business models, such as leveraging internet resources. By sharing resources across industries, shifting costs, and improving efficiency, ultimately a third party pays.

Case Study: The Story of Boss Zhang from Huaibei

Dealer Zhang primarily runs a food and beverage business, with direct distribution to over 500 terminals in the local urban area.

At the end of 2003, one of Zhang's upstream manufacturers launched a new fruit milk product. In the overall launch plan, the manufacturer required local business personnel to post POP and banners at 500 terminals in H City for at least half a month. The manufacturer's local office had 6 people; if all went out to post POP at various small and medium terminals, it would take about three days. At an average daily wage of 100 yuan per person, labor costs would be 6×3×100=1,800 yuan. Gifts for each store averaged about 4 yuan, totaling 4×500=2,000 yuan. Other vehicle and miscellaneous expenses were about 500 yuan. The total execution cost for this market plan was 1,800+2,000+500=4,300 yuan. Additionally, these POPs typically stayed up for no more than 5 days—either blown away by wind, torn down, or covered by other manufacturers' staff. Money was spent, but the actual effect was minimal. If re-posting were needed, costs would double.

Inspired by this, Zhang had his salespeople conduct a special survey of small and medium terminals in H City. The survey showed there were over 500 such terminals, each capable of displaying about 10 POPs and two banners. After negotiations, Zhang offered each individual store owner about 600 yuan worth of products annually in exchange for exclusive rights to post POPs and banners at each terminal, and he used his own delivery staff to do the posting. Over 80% of terminals accepted the deal, as they'd earn an extra 600 yuan a year.

Then Zhang approached his upstream manufacturers with a proposal: H City has over 500 small and medium terminals. Zhang guaranteed a POP coverage rate of over 80% (one per store) for each 10-day period, charging 3,000 yuan per period, with discounts for multiple postings or long-term clients. To Zhang's surprise, 5 of 7 major manufacturers immediately agreed, because the math was obvious: it was cheaper than organizing their own staff, and more importantly, it guaranteed coverage and duration.

Zhang continued, contacting other major manufacturers. Soon, the first month's three time slots were fully booked. Zhang had his staff sign contracts with terminals, and he signed separate contracts with manufacturers. Zhang's profit:

  1. Revenue: 10 manufacturers × 3 times per month × 3,000 yuan = 90,000 yuan. After discounts, actual revenue was 85,000 yuan.
  2. Expenses: 400 contracted terminals × average 50 yuan per month = 20,000 yuan. Adding bonuses for staff and premium payments for prime locations, actual expenses were 38,000 yuan, leaving a monthly profit of over 40,000 yuan.

By September of this year, Zhang had earned over 200,000 yuan in net profit from terminal POP posting, increased staff income, and boosted employee morale. Moreover, Zhang established connections with manufacturers he previously had no dealings with, laying a foundation for future cooperation. Most importantly, Zhang gained control over H City's terminal advertising space, setting the stage for future profits.

Case Study: Boss Wang's Expansion Path

Boss Wang was originally an ordinary wholesaler in Shenyang's Nan'erpi Market, dealing in leisure foods, seasonings, beverages, and liquor. He continuously adjusted his product mix based on market demand, gradually expanding from food to sanitary tableware and fresh produce, offering many restaurants one-stop door-to-door service, saving labor and providing price discounts. Recently, he formed an alliance with a local professional magazine, using his customer network to boost magazine distribution. His operation gradually moved out of the wholesale market, and at the end of 2003, he established his own marketing company with departments for promotion, category management, public relations, and management. The company operates only in Shenyang, resolutely avoiding other regions. From the start, Wang was determined to thoroughly penetrate the Shenyang market.

Wang now covers about 60% of Shenyang's mid-to-low-end restaurant market and is expanding into hotels and government agencies. He's currently planning a commissioned training program in hotel services with a local college to strengthen relationships with hotels and restaurants. This way, his company shifts from physical product sales to a full-service logistics headquarters offering comprehensive solutions. Through meticulous management, Wang has developed strong operational capabilities, even negotiating media buying with TV stations and securing prime time slots at low prices. Many outside manufacturers, especially food companies from Fujian and Guangdong and liquor makers from Hunan and Sichuan, contact Wang first when entering the Shenyang market.

Now, Wang simply asks companies to hand over their original market investment, and he handles all remaining work. Gradually, many products find it difficult to enter his downstream network independently, and issues like settlement force them to seek Wang's help. Thus, Wang has become a "landlord" collecting rent.

Case Study: Boss Zhou's Money-Making Approach in Wuhan

Boss Zhou in Wuhan primarily deals in leisure foods, mainly potato chips and sunflower seeds. Due to product characteristics, these products have numerous offline promotional activities. Although manufacturers fund and plan these promotions, Zhou must coordinate terminal negotiations, venue arrangements, and staffing. Over time, Zhou learned the ropes of promotional activities, from understanding manufacturers' overall plans to arranging recruitment and training of promo staff, negotiating venue and time slots with store personnel, preparing equipment, handling government permits for large events, and managing personnel and vehicle scheduling during events. Zhou and his team became proficient in executing promotional activities. Later, promo supervisors from other manufacturers began asking Zhou for help with their promotional arrangements.

After investigation, Zhou summarized the following:

  1. Manufacturers run promotional activities almost daily, so the market volume is huge.
  2. The skill levels of promo supervisors vary, leading to inconsistent efficiency and effectiveness, resulting in waste and unnecessary complications.
  3. Since manufacturers or dealers handle promotions separately, costs cannot be shared, making overall costs higher.
  4. Many manufacturers increasingly focus on ground promotions, but frontline staff, fearing hassle, are reluctant to take on more activities, creating a conflict.

This analysis revealed market demand:

  1. Every manufacturer wants efficient promotional arrangements.
  2. Frontline staff want the benefits of promotions (since they boost sales) but don't want the hassle of execution.

In operations, Zhou relied on his extensive practical experience and strong relationships with promotion management departments at various stores. The constant contact with stores for promotions further solidified his cooperation with store personnel, easing negotiations and securing favorable treatment in scheduling and fees, which also benefited his own product distribution. For manufacturers, entrusting promotions to Zhou's company at the same or lower cost improved efficiency and effectiveness, saving effort and worry—why not? With low investment and quick returns, Zhou's promotion agency turned profitable within two months of opening. The agency categorized promotions by venue: community events, large store events, small and medium chain events, plaza events, etc.; and by scale: from small single-person promotions to large variety shows. By the end of 2005, Zhou's profit from the promotion agency exceeded 400,000 yuan. This year, Zhou has begun expanding into promo staff outsourcing, expecting profits to increase significantly by year-end.

From these cases, we see some dealers starting to focus on specific nodes, leveraging their resource advantages to innovate profit models, achieving "wool from a dog" and gaining commendable results. However, it's concerning that many liquor dealers and companies remain stuck in old thinking, trying to navigate the crisis through strategic and technical tweaks, or failing to grasp the severity and long-term nature of the crisis, hoping the liquor market will rebound like the stock market. This is dangerous. In today's liquor industry, without innovation and change, survival is impossible. Therefore, liquor companies must respond proactively, broaden their horizons, and quickly find business models where "wool comes from a dog."

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