In industries such as daily necessities, pharmaceuticals, food, and beverages, a unique marketing strategy called distribution is prevalent. The so-called "distribution" is a market operation carried out by manufacturers in cooperation with distributors. In this operation, the manufacturer's salesperson drives the company's truck (or the distributor provides a vehicle) loaded with products, and together with the distributor, follows a predetermined visit route to call on "retail stores" that have transactions with the distributor (note: "retail stores" mentioned in this article refer to downstream sales channels, such as street corner grocery stores, mom-and-pop shops, small and medium-sized supermarkets, chain stores, etc.). Leveraging the long-term cooperative relationship between the distributor and retail stores, the salesperson explains in detail to the retail store to persuade it to agree to stock the products. In short, distribution is about "placing" the manufacturer's products into retail stores. I. Industries Suitable for Distribution Distribution is a very effective marketing strategy. In addition to daily necessities, pharmaceuticals, and food industries, other industries can apply the distribution strategy if they meet the following two conditions:

  1. There is still a sales channel between manufacturers and retail stores in the industry.
  2. The total number of retail stores in the industry is very large, making it impossible for manufacturers to transact directly with all retail stores. II. Products Suitable for Distribution
  3. New products (products not yet on the market, or products newly launched by manufacturers that already have other manufacturers' products on the market).
  4. Declining products.
  5. The second product launched by a manufacturer after its first product has established a firm foothold in the market.
  6. New specifications or new styles of old products. III. Benefits of Distribution for Manufacturers
  7. Distribution quickly moves the manufacturer's products from upstream distributors to downstream retail stores, accelerating product circulation and sales speed, fully leveraging the "push strategy."
  8. For new products, distribution is like a beachhead landing. Once placed in a retail store, that store may become a permanent base for the product, subsequently ordering from the distributor.
  9. Distribution can quickly place new products into every corner of the market, so that after advertising campaigns begin, consumers can conveniently purchase the product.
  10. Distribution can create a market price for new products.
  11. Through distribution, products are displayed in retail stores, allowing consumers to see them, which helps increase product awareness. That is, distribution has an "advertising" effect at a lower cost.
  12. Distribution can control distributors, making them operate the manufacturer's products.
  13. Distribution is "squeezing" competitors, using the limited funds of retail stores to purchase the company's products, while also reducing their purchases of competing products.
  14. Distribution sells the manufacturer's products to retail stores in "limited areas" at a "unified price," and during distribution operations, the manufacturer's salesperson supervises from the side. Therefore, distribution does not cause market price chaos or cross-regional sales. IV. Difficulties in Distribution
  15. Distributors believe they do not have enough manpower and time to cooperate with manufacturers in implementing distribution.
  16. The traditional business model of distributors is mostly "passive operation," sitting in the store waiting for retailers to come. Implementing distribution means changing this model to "active visit sales." Distributors may not easily accept this new concept, feeling it harms their self-esteem and superiority.
  17. Distributors worry that after distribution, manufacturers will grasp their customer sources and transact directly with retail stores.
  18. During distribution, some retail stores will refuse to stock products, mainly for the following reasons: 1 Retail stores believe that stocking during distribution will tie up funds, and it is better to order from distributors when needed. 2 Due to manufacturer reasons, price contradictions in the sales channel allow some retail stores to buy "cheap goods," leading them to refuse to stock. 3 Before distribution, retail stores took the initiative to order from distributors, but distribution is the opposite: distributors actively ask retail stores to stock. In this reversal of roles, some retail stores may ask distributors for deferred payment. This may lead distributors to make the same request to manufacturers. V. How to Persuade Distributors to Cooperate in Distribution
  19. Each distribution session only takes 3-5 hours, and distributors need at most 5 days per month, so there is no issue of insufficient manpower or time.
  20. Analyze the benefits distribution brings to distributors: 1 Reduce inventory pressure. 2 Shift from passive to active business model, which is necessary to improve performance and increase profits in fierce market competition. 3 Most retail stores order from two or more distributors simultaneously. Implementing distribution can make these floating retail stores order regularly from the distributor.
  21. Assure distributors that "after implementing distribution, our company will keep its promise and not transact directly with retail stores." Moreover, based on cost accounting, it is not worthwhile for our company to transact directly with numerous retail stores.
  22. Distribution involves the manufacturer's salesperson and the distributor personally visiting retail stores, making retail store owners feel more respected, so the vast majority of retail stores will agree to stock. Distributors only need to select retail stores with "strong sales capability," "stable operations," and "easy collection," and with the manufacturer's correct marketing strategy, they will not face refusals or requests for deferred payment during distribution. VI. Preparations Before Distribution
  23. Manufacturers must use correct marketing strategies to maintain market order. They must not allow cheap goods to flourish; otherwise, retail stores will often refuse to stock during distribution, and those that do stock may request returns afterward.
  24. When the manufacturer's marketing department drafts the "distribution plan," it must include the following two items: 1 Reward measures for distributors that cooperate in distribution. 2 Promotional items for retail stores or free products based on order quantity.
  25. Arrange the visit route in advance with the distributor to improve efficiency. Calling retail stores beforehand will be even more effective.
  26. During distribution operations, the manufacturer's salesperson needs to sell to retail stores, so before distribution, the manufacturer must provide formal training to the salespeople involved. Training includes two aspects: 1 "Sales skills" for distribution—enabling salespeople to use persuasive language to get retail stores to agree to stock; 2 Psychological counseling—making salespeople confident in distribution.
  27. When applying distribution strategies in other industries, it is necessary to thoroughly understand and analyze the operating characteristics of distributors in that industry in advance to avoid problems during distribution and side effects afterward. VII. Precautions
  28. When selecting distributors to cooperate in distribution, it is best not to first choose those wholesalers born under the planned economy, as they are mostly conservative in operation, lack drive, and are unwilling to change their business model, unless most peers have already changed.
  29. The easiest areas to implement distribution are: 1 relatively affluent townships; 2 urban suburbs. Therefore, distribution should start from these two areas, allowing for avoiding decision risks while accumulating experience to advance into cities.
  30. For distributors cooperating in distribution, the company should give certain rewards based on sales volume, number of stores distributed, etc., but must prevent these distributors from selling the company's products at low prices to other distributors not involved in distribution, to avoid disrupting market prices.
  31. All distributors participating in distribution must sell to retail stores at the same price to avoid complaints from retail stores and affect future distribution.
  32. It is necessary to select distributors that can seriously implement the "distribution plan" to cooperate with the company.
  33. During distribution, do not promise "consignment" to retail stores; otherwise, it may cause large-scale returns later.
  34. During distribution, the quantity sold to retail stores should not be too large (except for declining products), to avoid retail stores tying up too much capital and being afraid to stock again.
  35. If the distributed products require after-sales service, the manufacturer must provide it well. Reply with the following keywords to categorize and read related professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Distributor Game, Product Slow Sales, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Channel Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Deals, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-regional Sales, KA, Terminal Visualization, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, Sales Novice, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Investment Attraction, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Inventory Pressure, Festival, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Debriefing Report.