---
title: "Distributor Commits Suicide After Supermarket Fails to Pay 400,000 Yuan Debt"
description: "A distributor in Huaibei committed suicide on August 22 after a supermarket repeatedly failed to pay a debt of over 400,000 yuan. The incident highlights the severe consequences of credit sales, as more than 85% of distributors are now refusing to supply large supermarkets due to unfair contract terms and squeezed profits."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-05"
language: "en"
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# Distributor Commits Suicide After Supermarket Fails to Pay 400,000 Yuan Debt

> A distributor in Huaibei committed suicide on August 22 after a supermarket repeatedly failed to pay a debt of over 400,000 yuan. The incident highlights the severe consequences of credit sales, as more than 85% of distributors are now refusing to supply large supermarkets due to unfair contract terms and squeezed profits.

The harm of credit sales is only truly realized when one experiences it, or even when it turns into a tragedy. It turns out that the small amount of a few thousand yuan you haven't repaid can become the last straw that breaks someone's back. **Recently, such a tragedy occurred again. On August 22, a distributor in Huaibei committed suicide because a supermarket owed him over 400,000 yuan in payment for goods, which he had repeatedly demanded but not received.**

The general situation: Distributor Chen, from Huaibei, took his own life. The cause was that a certain supermarket owed Chen more than 400,000 yuan for goods, which had not been repaid for a long time. After multiple attempts to collect the debt, Chen was unsuccessful. He then went to the supermarket after drinking pesticide and died.

**Unexpectedly,**
**Over 85% of distributors no longer supply large supermarkets!**

**1. Most supermarkets are experiencing declining performance and sales, which is the root cause of their squeezing of distributors.**
If supermarkets don't make money, they are certainly unwilling to stock more goods. If distributors make money while supermarkets don't, supermarkets will be envious and will definitely try to squeeze profits from upstream procurement.

Looking at the domestic retail system, few chains are still growing. Among large chain supermarkets, apart from Yonghui's target of 1,700 stores, Auchan and others have been acquired by Alibaba and are facing serious operational problems. Store fees increase year by year, profitability declines year by year, so they can only make up for it by squeezing distributors.

In fact, the relationship between distributors and supermarkets is like that of fish and water. If the cost of water is excessively reduced and distributors' fees are squeezed, distributors' profit margins won't improve, and one day they will no longer accept the supermarket's contract terms. The larger trading companies that are agents for famous brands suffer the most! Famous brand products have thin profit margins, the industry is transparent, and the markup rate of many products is not enough to cover the supermarket's contract fees!

**2. Abnormal operations: supermarkets frantically deduct distributors' fees instead of finding ways to increase customer sales and create profits.**
Supermarkets want to make money, so they impose various fees such as entry fees, barcode fees, new product promotion fees, activity fees, decoding fees, and ground promotion fees, which are countless. When profits and sales decline, supermarkets don't reflect on their operational issues, don't try to attract customers, or improve store management. Instead, they crack down on upstream suppliers and find ways to deduct distributors' profits. If distributors stop playing along and there are no more products, supermarkets will be even worse off.

**3. Costs are rising, and distributors have to leave.**
Some distributors' contract renewal fees for stores have reached tens of thousands or even hundreds of thousands of yuan. When calculating annual sales, the various contract fees in stores account for more than 20% of the supply amount to supermarkets. How much markup can distributors add? This doesn't even include display fees, promotional discounts, or promoter fees. Additionally, e-commerce is eroding the market share of traditional stores. If this continues, consumers will be forced to shop elsewhere, creating a vicious cycle!

These three points alone are enough to explain why distributors are fleeing large supermarkets. There is simply no profit! If there were even a little benefit, they wouldn't withdraw. Withdrawal means the brand manufacturer might consider developing new accounts, and distributors are no longer afraid of that. This shows that the problem has reached a point where it is oppressing the entire industry, not just a single supermarket system.

Nowadays, the barriers to entering large supermarket systems are getting higher, making newly established trading companies reluctant to cooperate. Some established trading companies are withdrawing due to rising contract fees. Supermarkets may soon face a shortage of suppliers, with fewer and fewer barcodes, and new products not being shelved in time. New products in stores mean vitality. Can a supermarket without vitality still be good? Let's wait and see how supermarkets develop in the future; time will tell us everything! Without win-win cooperation, there will eventually be a day of bankruptcy. I hope all supermarkets can read this article, **treat suppliers well, settle accounts promptly, cooperate sincerely, and achieve true mutual benefit and growth together**! Partners are not for squeezing but for win-win; not for encroaching but for supporting!

Source: Distributor Alliance Platform
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