Dealers, a group in a disadvantaged position Since the first manufacturer came into being, dealers have correspondingly emerged in this world! With grievances and reconciliations, separations and reunions, dealers and manufacturers—this pair of adversaries, this unity of opposites—have never ceased their game of interests since their inception! Conflicts and contradictions over sales volume versus profit, market share versus risk, investment versus output, etc., have always been at the center of debate! Although there has been ongoing discussion and debate about the specific relationship between dealers and manufacturers—wife? lover? or something else? However, objectively speaking, the relationship between dealers and manufacturers has never been simply reduced to a single type. Depending on the industry, brand, region, stage, and other specific circumstances, the relationship manifests in various forms and characteristics. Sometimes both parties demand the loyalty of a wife for long-term companionship, but at other times they need the brief romance of a lover! Sometimes it also shows the pragmatism of worldly businessmen! Therefore, in essence, the dealer-manufacturer relationship is a practical cooperation! Ultimately, it is a very real interest-based relationship between the manufacturer and the dealer, with both alignment and conflict! In the vast majority of cases, dealers are in a weaker position in the manufacturer-dealer contradiction, determined by the balance of power:

  1. Whether in terms of business scale or strength, dealers and manufacturers are not comparable;
  2. The connecting carrier between manufacturer and dealer—the control of brands and products—lies with the manufacturer, not the dealer;
  3. Most of the game rules between manufacturer and dealer are set by the manufacturer, and dealers are often in a subordinate and compliant position;
  4. Product R&D and technological updates, as well as product and brand promotion, are in the hands of the manufacturer, who controls the most valuable end of the value chain. Therefore, under normal circumstances, the manufacturer-dealer relationship is dominated by the manufacturer, and dealers are often in a subordinate position—they are indeed a disadvantaged group. Dealers and manufacturers—dare to manage, and you will win! Regarding the manufacturer-dealer relationship, do dealers have no initiative at all? The answer is no! Passively and negatively adapting to the manufacturer-dealer relationship will only weaken the dealer's own proactive operational capabilities, which is not conducive to the formation and maintenance of a benign, interactive, healthy, and constructive new-type manufacturer-dealer relationship! Manufacturers' control and dominance over dealers are often manifested in the following four aspects:
  5. Control and supply of goods and brands;
  6. Investment and control of necessary expenses for market expansion;
  7. Full follow-up and investment in after-sales service;
  8. Mastery of new product and brand promotion;
  9. Control over channel and regional division and resource allocation rights. Of course, objectively speaking, since manufacturers control most of the resources for channel operations, dealers inevitably are subordinate to manufacturers in many cases. However, the balance of this system is temporary. It is entirely possible to seize the opportunity in a specific region and period, dare to break the existing balance, take control of some key resources first, and in the short term dominate and change the original manufacturer-dealer relationship! For example: If a dealer takes the lead in occupying and successfully operating advantageous channel resources in a specific region, and the manufacturer lacks other channel resources or channel counterparts to counterbalance, then for a period, the dealer can relatively proactively dominate and influence the manufacturer-dealer relationship, and to some extent, guide the manufacturer's investment amount and methods based on their own specific situation! Therefore, objectively analyzing, the manufacturer-dealer relationship is dynamic and relatively balanced. Excellent channel operators should follow the trend, timely guide or actively influence this balance to move in their favor! When two strong forces meet, the brave wins! It is necessary to dare to strive for, establish, and possess some key and sustainable resources, dare to break the conventional balance system, and thus establish a new channel order and channel rules! Dealers who actively seek to break the ice and move towards excellence should have a very positive mindset—dare to manage, and you will win! To manage manufacturers well, dealers need to practice 10 essential skills! Of course, for dealers to manage manufacturers well, it is not about acting recklessly without rules, as that would only backfire! Dealers must deeply understand the strategies for managing manufacturers well. In summary, they need to cultivate the following 10 essential skills:
  10. Risk Management The true essence of dealer operations is to minimize risk and maximize profit. Therefore, the first skill is to strengthen risk management between manufacturer and dealer. Under normal circumstances, try to secure a certain credit limit, floor funding, or quality guarantee deposit, and also strive for a cash-before-delivery operation mode each time. This way, if the manufacturer attempts to terminate the cooperation midway, they will be hesitant and dare not act rashly, thus giving the dealer the initiative!
  11. Financial Management Excellent manufacturers generally settle and reconcile previous sales, market expenses, rebates, etc., with dealers regularly according to contract terms. However, more manufacturers often keep this area vague or deliberately delay payments. Therefore, dealers should not overly rely on the manufacturer's habits but actively conduct regular settlements and clearances according to the signed contract, thereby standardizing their own financial management and making operations orderly;
  12. Operations Management Regular brand manufacturers often produce standardized dealers, but when the manufacturer's operational processes are difficult to clarify, dealers must first improve efficiency through modularizing their own operational processes and actively use their standardized operational systems to align the manufacturer's operations with their own;
  13. Promotion Management The brand belongs to the manufacturer, but it also belongs to the dealer! Therefore, excellent dealers do not narrowly think that brand and product promotion is the manufacturer's task! Good dealers always have their own overall product and brand promotion plans and require the manufacturer to invest some resources or provide some execution standards for joint promotional activities. The sole purpose is to maximize the benefits of products and brands!
  14. Price Management With increasing market differences, the era of manufacturers setting a unified national price is gone forever! Therefore, dealers can adapt to this actual change and formulate a regional price system based on two principles—meeting the manufacturer's required market sales volume and ensuring channel partners obtain considerable profits!
  15. Inventory Management In many cases, manufacturers take the initiative in dealer inventory management, but excellent dealers should have their own scientific inventory management system and purchase-sale standards. Currently, a few dealers use dynamic inventory management, which is very effective. Based on actual sales quantity or amount, they decide on periodic purchasing behavior, making it unreasonable for manufacturers to force stock! Thus, dealers put themselves in an active position through data analysis.
  16. Regional Management Good dealers should be very familiar with the operational capabilities of channel customers in their agency/distribution area, especially the advantages and disadvantages of various channel formats compared to competitive brands. They should continuously optimize the existing channel structure through self-organization of their own system. Only then will manufacturers not forcibly intervene or interfere in the dealer's regional channel affairs, and they can timely propose expanding their region;
  17. Item Management Conventional manufacturers, to expand their own display, often strongly require dealers to stock all items, rarely considering the actual sales contribution! This is a common problem among 80% of manufacturers. Dealers need to make every penny work, so they must know which items are suitable for their region. While ensuring sales, they should minimize sample displays and minimize capital occupation!
  18. Personnel Management Although manufacturer sales representatives have received some systematic training, the specific daily work arrangements mainly need to be reasonably arranged by the dealer. Everyone thinks the less specific work they have, the better. Dealers should learn to manage the daily work content of sales representatives so that their behavior brings benefits to themselves. If manufacturer sales representatives are slack and inefficient, dealers also bear significant responsibility!
  19. After-sales Management Dealers favored by manufacturers are often those who can handle all affairs in the region, not just simple channel agents. Therefore, dealers with strength, ideas, and network coverage should consider doing after-sales service well in the region, thereby reducing the worries of customers, manufacturers, and channel outlets! Such dealers with comprehensive value often make manufacturers reluctant to give up and willing to invest more. Through their own after-sales service system, they can propose specific and clear cooperation content and processes to the manufacturer, making after-sales service their second brand and capital, and promoting sales! In addition to strengthening the management of various cooperation matters with manufacturers in daily work, and taking the lead in proposing cooperation rules when there are no standards to put themselves in a favorable position, dealers should also actively seek and strengthen regular, in-depth communication with leaders at all levels and relevant departments of the manufacturer. Not only should they let sales representatives and regional managers, but also marketing directors and general managers, understand their operational models and achievements! They should also humbly discuss, learn from, and consult better operational methods to continuously grow and make their own brand three-dimensional and full! Truly practice the ideal result of "dare to manage, and you will win." -END- Excerpt from "Terminal Visit Sales General Model" September 10, 2015 20:00--21:00 Long press the QR code below, pay 9.9 yuan to register for the course now.