---
title: "Dealer Development: New Situation, New Approaches"
description: "Dealers are a company's first customers, especially for SMEs where brand pull is insufficient; dealer push becomes key to market penetration. Choosing the wrong dealer means failure from the start. This article recommends 11 types of dealers to prioritize, based on practical experience and case studies."
author: "王荣耀"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-08-12"
language: "en"
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---

# Dealer Development: New Situation, New Approaches

> Dealers are a company's first customers, especially for SMEs where brand pull is insufficient; dealer push becomes key to market penetration. Choosing the wrong dealer means failure from the start. This article recommends 11 types of dealers to prioritize, based on practical experience and case studies.

Dealers are the first customers of an enterprise, especially for small and medium-sized enterprises. When the brand is not strong enough to pull the market, the dealer's push becomes the key to product market penetration. As a sales manager of a distillery proposed: First-class product + first-class dealer = super first-class market. First-class product + second-class dealer = second-class market. Second-class product + first-class dealer = first-class market. Choosing a wrong dealer is equivalent to failing from the start. Many problems in manufacturer-dealer cooperation today, such as poor product promotion, uncooperative dealers, poor implementation of manufacturer strategies, and dealer cross-region selling, are related to wrong dealer selection.
Sales personnel's mistakes in selecting dealers stem from recklessness and ignorance. Recklessness means lacking a dealer selection process and standards, and not knowing the dealer well. Ignorance means sales personnel do not know what kind of dealer is actually a good dealer.
The market changes faster than marketing. Today, some traditional concepts of dealer development are being challenged. For example, in the past, dealers were required to have a sound sales network, but today some enterprises develop dealers from scratch and still do well in the market. Some enterprises require dealers to have strength, but Yanghe Distillery's first criterion for selecting dealers is their social resources, because Yanghe's market development strategy starts from group buying.
Practice shows that the most important criterion for selecting a dealer is to choose one who can promote our business development.
After more than 20 years of market baptism, a large number of excellent dealers have emerged in China, and they are reliable partners for enterprises. I recommend the following 11 types of dealers to enterprises:
1. **Dealers respected by peers**
Case: A salesperson of a famous brand, when developing dealers in the market, first goes to the terminal to see which product has the highest distribution rate and the best merchandising. After identifying this product, the salesperson asks the terminal merchant: From whom do you buy this product? Are you satisfied with their service? If everyone has a good impression of this dealer, the salesperson directly approaches the dealer: "Distribute our product!"
2. **Dealers with monopoly power in the region**
Currently, a group of powerful dealers has risen in the market, monopolizing local market resources. These are dealers that enterprises have to seek out.
Monopolistic dealers can be divided into the following types:
(1) Market monopoly. The dealer has a sound network, strong promotion ability, and high market share in the local market.
A cosmetics dealer in Linfen, Shanxi, boasted: "In Linfen, whatever cosmetics I sell become bestsellers." The reason is that he monopolizes over 60% of the cosmetics business in the area.
(2) Category monopoly. The dealer monopolizes most brands in a certain category in the local market.
A condiment dealer in a certain place monopolizes about 70% of the condiment shelf space in supermarkets.
(3) Channel (terminal) monopoly.
The dealer has an absolute advantage in certain channels (terminals), occupying a considerable share.
A liquor dealer in a certain place monopolizes over 80% of the sales in local nightlife venues.
(4) Promotion monopoly. Some dealers buy out the promotion rights of terminals. Without such a dealer, you cannot carry out promotional activities in these terminals.
3. **Dealers who can provide good services to downstream customers**
Service refers not only to sales service, but more importantly to guidance service.
The common characteristics of these dealers are: advanced business awareness and strong management ability. When cooperating with downstream customers, they can provide guidance, training, and advice, enabling downstream customers to keep up with the manufacturer's development pace, and become the spiritual leaders of downstream customers. This greatly improves network quality and contributes to channel development.
For example, Pei Xiaosheng, chairman of Henan Piaoxiang Food Co., Ltd., relies on consultative service to make downstream customers loyal to him. When managing wholesalers, he first guides their concepts. He said: "The general dealer has walked a path that the second-tier wholesalers have not walked, so the general dealer has the responsibility to point out the direction for the second-tier wholesalers." Therefore, when visiting customers, he instills new marketing concepts and helps downstream customers set development goals for the new year every year.
He manages customers with "Five Modernizations":
(1) Branding: Use the manufacturer's brand to arm wholesalers. Some wholesalers have no brand awareness; their business model is to sell whatever sells well, whatever is cheap, and whatever has strong promotions. Every time President Pei visits wholesalers, he communicates and persuades them to operate brand products to promote their own development.
(2) Professionalization: Assist downstream customers in product brand integration, making a good brand portfolio, including determining the main product, profit product, image product, and products to fight competitors, so that the brands operated by dealers play a role of one plus one greater than two.
(3) Individualization: President Pei believes that each downstream customer has their own shortcomings, and then provides targeted guidance according to each customer's specific situation.
(4) Humanization: Provide personalized and humanized services to customers, and make friends with them.
(5) Knowledgeization: President Pei believes that second-tier wholesalers should play the role of "five members" (stock clerk, delivery person, promoter, salesperson, and manager), and then conduct targeted training.
Dealers operate products but sell services. The dealer's sales network is the manufacturer's sales network. If dealers cannot cultivate downstream customer loyalty through service, the network built by the manufacturer cannot withstand the test of market storms.
4. **Dealers who can provide strategic advice**
The common characteristics of these dealers are: rich market operation experience, familiarity with local market conditions, consumer characteristics, channels, and competing products, and the ability to propose highly effective promotion plans for our products.
A sales manager of a company warned salespeople: If the dealer you find is not strong but has ideas, we can support their development. Conversely, if a dealer is strong but has no ideas, even with great support, it is difficult for them to sell our products well.
5. **Dealers with strong market expansion capabilities**
Dealers have a strong sales team and strong execution ability.
6. **Dealers with network advantages**
Dealers have special advantages in a channel we plan to enter.
For example, Yanghe Distillery enters the market through group buying, so their criteria for selecting dealers do not look at strength but at their social resources.
7. **Choose dealers of the largest competitors in the industry**
The Art of War says: "Engage with the orthodox, win with the unorthodox." Many enterprises achieve surprise victories by developing dealers who are the best competitors in the industry.
Choosing competitor dealers can be divided into several situations:
(1) Find dealers of the largest or best competitors in the industry to distribute. For example, when Sofe cosmetics entered the market, the company's slogan was: "Follow P&G's path." When Liuyanghe developed dealers, it first chose the dealers of "Jinliufu".
(2) Accept dealers abandoned due to competitors' strategy changes. In 1999, Master Kong instant noodles implemented a channel refinement plan, canceling the distribution rights of large dealers, and Hualong Group took the opportunity to take over their network. There are many similar cases.
(3) Dealers dissatisfied with competitors' products, services, concepts, or strategies. For example, in the Henan market, Jiajia soy sauce succeeded in promotion in a very short time. Besides Jiajia's excellent market operation, another important reason was that the first brand of soy sauce in Henan at that time managed dealers too strictly, causing great dissatisfaction among dealers, who turned to Jiajia.
8. **Dealers who are former sales personnel of large companies**
This is a new type of dealer emerging in the business world. These dealers are excellent. On the one hand, they have received training in modern marketing concepts and methods in large companies, and have strong management capabilities. On the other hand, they come from manufacturers and know what manufacturers require of dealers, so they can cooperate well with manufacturers.
9. **Large second-tier wholesalers with potential, especially those of competitors**
10. **New-generation dealers**
Young dealers around 30 years old, with common characteristics of novel concepts, good learning ability, strong pioneering spirit, and pursuit of success. For example, the dark horse in the beer industry, Wei Xue Beer, looks for young dealers when developing dealers.
11. **Powerful individuals and units from other industries**
When Wanglaoji herbal tea was promoted nationwide, it encountered great resistance. A real estate businessman in Wenzhou placed it in hot pot restaurants and seafood restaurants, satisfying consumers' special need for reducing internal heat in special channels. As a result, sales improved significantly, setting a model and demonstration effect for Wanglaoji's national expansion.
When P&G recently adjusted its dealers, many newly developed dealers had previously been in real estate or other industries. The century-old liquor brand chose this type of dealer and achieved good results. Today, enterprises attach importance to this type of dealer, and even famous liquor brands like Wuliangye and Moutai have begun to focus on developing and selecting such dealers. These dealers have no experience in this industry, but they are successful in other fields and have strong strength. An old saying goes, "Different trades share the same principles." Moreover, today, successful experience in one industry often limits people's thinking. Cross-industry operators, without the shackles of industry experience, are more likely to succeed.
At the request of many dealer friends, the fourth B-end e-commerce inspection class of this public platform will go to Nanjing and Hangzhou from August 15 to 18 to inspect Qianmi Network and Alibaba Retail Link. Dealer friends interested in transformation can join us for on-site inspection:
Activity process:
Time: August 15-18
> 15th: Check in at designated hotel in Nanjing; 16th: Inspect Qianmi Network, take high-speed rail to Hangzhou in the afternoon; 17th: Participate in the "FMCG Dealer B2B Transformation Exchange Summit";
> 18th: Inspect Alibaba Retail Link in Hangzhou;
**Welcome dealer friends interested in transformation to join us to understand and inspect on-site**:
**Organization form**
************1. Company visit
2. Actual market case visit
3. On-site explanation
4. One-on-one communication************
Participating dealer friends only need to pay a registration fee of 200 yuan
Other expenses are self-paid
Note: This inspection is limited to dealers only
****************Interested dealer friends can long press the QR code below to register.****************
****************When adding, please note: "Fourth Registration"****************.
**Non-participants please do not disturb**
**Group photos of previous inspections:**
**Group photo of the 3rd B-end e-commerce inspection, from top to bottom: Yunbao Shangmeng, Weijie City Distribution, Wanshang Yizhan.**
**Group photo of the 2nd B-end e-commerce inspection, from top to bottom: Jinhuobao, Caiba, Yishang.**
**Group photo of the 1st B-end e-commerce inspection, from top to bottom: Piduoduo, Beiquan, Yishang.**
-END-
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