---
title: "Difficult Product Selection, Difficult Channels, 90% of Distributors' Performance Declining?"
description: "In exchanges with distributors, many reported unsatisfactory performance this year, with some even saying, \"The situation is bad, and it's estimated that 90% of distributors will see a decline in performance.\" What do you think about this data? Besides the registration dividend mentioned earlier, this topic is also worth exploring. The polarization is intensifying, with performance showing a stark contrast."
author: "孙英"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-09-30"
categories: "Capital, Earnings & M&A, Dealer Operations, Management & Methods"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/difficult-product-selection-difficult-channels-90-of-distributors-perfor-80bf93da/"
markdown: "https://xinjignxiao.com/en/articles/difficult-product-selection-difficult-channels-90-of-distributors-perfor-80bf93da.md"
original_source: "https://mp.weixin.qq.com/s/8yhlhbW8U_S78-qdAEvFXA"
translation: "https://xinjignxiao.com/zh/articles/%E9%80%89%E5%93%81%E9%9A%BE-%E6%B8%A0%E9%81%93%E9%9A%BE-90-%E4%BB%A3%E7%90%86%E5%95%86%E4%B8%9A%E7%BB%A9%E4%B8%8B%E6%BB%91-80bf93da.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/difficult-product-selection-difficult-channels-90-of-distributors-perfor-80bf93da/"
citation: "孙英. “Difficult Product Selection, Difficult Channels, 90% of Distributors' Performance Declining?.” New Distribution, 2019-09-30. https://xinjignxiao.com/en/articles/difficult-product-selection-difficult-channels-90-of-distributors-perfor-80bf93da/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Difficult Product Selection, Difficult Channels, 90% of Distributors' Performance Declining?

> In exchanges with distributors, many reported unsatisfactory performance this year, with some even saying, "The situation is bad, and it's estimated that 90% of distributors will see a decline in performance." What do you think about this data? Besides the registration dividend mentioned earlier, this topic is also worth exploring. The polarization is intensifying, with performance showing a stark contrast.

In exchanges with some distributors, we generally heard that this year's performance is not ideal, and some even reported: **"The situation is bad, and it's estimated that 90% of distributors will see a decline in performance."** What do you think about this data? Besides the registration dividend mentioned earlier, I believe this topic is also very worth discussing.
**Polarization Intensifies, Performance Shows Stark Contrast**
"**The economic downturn in the first half of the year came too suddenly, and we weren't prepared, leading to a 20% drop in sales.** In the second half, we quickly made adjustments, increased market coverage and market share, and now it's steadily rising, but the full year will still see a slight decline. I think most distributors won't see growth this year," one distributor told me. **Li Weijun, General Manager of Baoding Yuanlong Trading in Hebei, also believes: "Since the second half of last year, it's a fact that most stores and distributors have seen performance declines."**
During exchanges, I learned that some distributors' performance declines are mainly due to issues with product selection, team, and business thinking. **For example, one distributor said: "We mainly focus on milk powder. The products we introduced last year weren't well chosen, and we didn't do well with them. Plus, the heavy task pressure and the team's inability to digest it led to several tons of milk powder being written off, affecting this year's profits. Fortunately, some potential milk powder brands grew well, and we estimate a 20% growth for the year, but it didn't meet our expectations."**
A distributor from Fujian also told me that **this year they saw a performance decline due to internal reasons, but the specific figures are not convenient to disclose.** Additionally, some distributors complained: "Some brands are not kind. After we worked hard to build the market, they parted ways with us, seriously affecting our operations." There are no eternal friends, only eternal interests. This reminds me once again of the cruelty of "business is like war."
During market transformation, the challenges faced by brands, distributors, and channel partners are only getting tougher, and we deeply feel their pressure and anxiety. **Overall, the reasons for the polarization in distributor performance this year are mainly: first, intense channel competition, difficult sell-through, and increased investment by distributors; second, unstable brand partners, affecting distributors; third, products and teams lagging behind, leading to market erosion; and fourth, managers' thinking not changing, leading to desperate measures.**
**The Difficult Transformation from 10 Million to 50 Million, Seizing Trends Still Offers Opportunities**
Regarding the current performance of distributors, **Li Weijun, General Manager of Baoding Yuanlong Trading, also believes: "Distributors with slight growth or flat performance should have chosen good categories and brands. If there's an opportunity, they should lean towards big brands and potential milk powder brands. Also, stable and effective channels are important. Personally, I think grasping channels doesn't mean just entering big stores or big systems. Different products should be treated differently: enter big stores when appropriate, and small stores when appropriate."**
In the past two years, the concentration of the milk powder industry has increased, the Matthew effect has intensified, and milk powder brands are fighting in the existing market. **For example, this year Feihe targets 15 billion, Junlebao targets 75 million cans, Ausnutria aims for 8 billion. Additionally, we see growth from brands like Synutra Youbo, Blue River, Bejtea, Beikangxi, Stramus, Duoen, etc.** Isn't the increment of these milk powder brands derived from the market share contributed by small brands?
"**Distributors who got these mainstream brands this year are definitely doing well, but if you're doing third- or fourth-tier small and medium brands without potential, life is tough. In the milk powder market, you need to follow the trend and leverage it, then you'll do well.** These brands have high requirements for distributors' capital, team, and channel control, especially capital," this distributor added: "If a company with 10 million in revenue mainly deals in milk powder, it may not be strong enough in capital strength, team building, product brand power, channel expansion, and stickiness. **I suggest focusing on local areas, strengthening capital accumulation, team building, and channel control, and gradually introducing products with strong brand power. There's still a chance to reach 50 million."**
Some distributors also believe: "There are opportunities, but the fear is that distributors are unstable. For example, this year, due to a strategic mistake by the manufacturer, both the brand and the distributor lost a good opportunity for growth. Unfortunately, it's too late."
Another distributor, who seized the market trend and **expects a 50% growth this year, said: "If you want to do 30 million, you need the thinking and layout of 50 million. You must set goals for yourself. Team and mindset are important. The company arranges mindset training for employees. It requires the cooperation of the brand, distributor, and channel to make money together and achieve win-win collaboration."**
Some distributors think: "10 million is a threshold. Once you reach it, you can basically maintain. According to current competition, breaking through 10 million is still possible, but not easy. **First, choose brands that attract traffic; second, deeply cultivate channels and improve services; finally, the team is crucial. Without people and a team, distributors have no advantage."**
"Recently, the industry's consumption of original accumulation is terrifying, and the quality resources left for small distributors are getting fewer. They need to find new development and trends to balance or counter the industry's trend risks. **The current comprehensive operation and partnership model is a good attempt," one distributor told me.**
Of course, some distributors gave more specific operations: "Future distributors, **first, need to find their positioning and development plan,** choose suitable brands, **adopt a brand portfolio development strategy,** such as big general goods, mainstream and potential brands; second, market competition is about capital, resources, and channel control; third, **team building ability, execution ability, and promotion service ability, forming a combination of punches."**
**Surviving the Industry Winter, the Era of the Survivor King Arrives**
Previously, the industry focused more on the transformation pain points of brands and channel partners, but distributors' pressure is no less than that of brands and channels. In the eyes of some distributors, in the industry winter, survival is more important than anything. The market's survival of the fittest and the shift in power, after all, the end of market competition is "the survivor wins."
When discussing the industry status with some distributors, one said: "**Many distributors are transforming now; survival is key.** This year's big reshuffle, those who remain will have more market later. We now **do the basic work well, be steady, make no mistakes, earn no money but gain experience.** We will also make breakthroughs in other areas, walking on two legs."
"The cake is just this big. Distributors without brands in hand will find it increasingly difficult to survive. For example, a distributor with 10 million a year has only about 800,000 a month. After deducting labor costs, rent, warehousing, etc., they are on the edge of losses if not careful. **Distributors are also polarizing, and opportunities for small distributors are getting fewer."**
Currently, only those who have insight into and seized market trends, **and made timely responses in product selection, team building, channel cultivation, etc., can ride the fast train of development and overtake on curves.** Competition is cruel. During the industry reshuffle, if you only seek comfort and stability, without change or breakthrough, you can only go downhill and be replaced by others. **After all, when the times eliminate you, they don't even say goodbye.**
Source: Milk Powder Circle (ID: naifenquan)
Once the tip is adopted, a reward of 400-2000 yuan will be paid. **China FMCG + Internet Professional New Media** **Committed to FMCG manufacturer and distributor transformation and channel digital solutions**


---

## Citation metadata

- Publisher: New Distribution
- Author: 孙英
- Published: 2019-09-30
- Canonical: https://xinjignxiao.com/en/articles/difficult-product-selection-difficult-channels-90-of-distributors-perfor-80bf93da/
- Original source: https://mp.weixin.qq.com/s/8yhlhbW8U_S78-qdAEvFXA

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671