---
title: "Distributors: Afraid to Manage, Afraid to Penalize—Where Exactly Is the Problem?"
description: "This article discusses the root cause of distributor management difficulties: insufficient profits. It argues that only when distributors earn more money can they afford to pay higher wages and effectively manage staff. Drawing on Wei Qing's framework, it explores how distributors can optimize their profit models through product selection, channel structure, and category management."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-07-27"
language: "en"
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# Distributors: Afraid to Manage, Afraid to Penalize—Where Exactly Is the Problem?

> This article discusses the root cause of distributor management difficulties: insufficient profits. It argues that only when distributors earn more money can they afford to pay higher wages and effectively manage staff. Drawing on Wei Qing's framework, it explores how distributors can optimize their profit models through product selection, channel structure, and category management.

Foreword:
Before graduation, I had a brief internship at Nongfu Spring, which brought me into contact with my first industry expert—Teacher Wei Qing. The first professional book I read was also "The Terminal Sales Secret Manual." After graduation, I stayed in the FMCG industry, and Wei Qing has been my mentor. In early 2019, Teacher Wei Qing launched the "2019 Online Video Course," through which I systematically studied distributor management systems.
This article is inspired by my learning from Teacher Wei Qing's "How Distributors Optimize Their Profit Models," and I will discuss distributor profit models using the logical framework from the course.
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In the daily operations of distributors, the most headache-inducing issue is the management and assessment of sales staff. "The post-90s generation is increasingly difficult to manage. If you manage them strictly, they leave; if you manage them lightly, they don't listen."
Indeed, this is the reality. Although I have previously written articles on distributor organizational assessment and incentive topics, besides focusing on management strategies, methods, and forms, there is another important point: "To manage well, first see if you have leverage."
If you give sales staff a base salary of 2,000 yuan per month, can you expect them to fully utilize their initiative, be "people-oriented, wolf-like team, all-employee entrepreneurship, and stand on the same side as the boss"? Is that possible?
Therefore, the foundation for managing and assessing employees is that distributors have the confidence and capital to manage. If salaries are 20%-30% higher than the industry average, and average monthly income exceeds 10,000 yuan, would you still be afraid to manage or penalize?
Then, the next question from distributors arises: "I also want to give high salaries and high commissions, but my strength doesn't allow it!" With a gross profit of only 1 yuan per box of instant noodles, how much can be shared?
Last Saturday, I met a distributor of a leading milk brand with annual sales exceeding 100 million yuan, working capital of 40 million yuan, but annual profit of only 1 million yuan! If only representing one milk brand, it's not even enough to put in your own pocket, let alone share with others.
**Ren Zhengfei, founder of Huawei, once said: "If money is distributed well, a large part of management problems are solved." For distributors, a sentence should be added before that: "If you earn money and distribute it well, a large part of management problems are solved!"**
In summary, the key breakthrough point for the most headache-inducing business management issues is: distributors need to earn more money, because only when they earn money and have good profits can management be easily resolved. Management is just a matter of "tactics."
This article focuses on "how distributors can better earn money," following Teacher Wei Qing's logical framework, to discuss how distributors can design profit models and increase profit sources.
**Choice is more important than effort!**
The essence of a distributor's business is buying and selling goods to earn the price difference. There are two key links: **First, what goods to buy; Second, where to sell the goods**? Therefore, product sales volume and network are the foundation of profit. Teacher Wei Qing summarized three directions to increase distributor profits: increasing revenue, reducing costs, and offense-defense.
Although distributors do the business of buying and selling goods, in fact, what products they represent often determines which channels they enter. The product mix also determines their distribution model. As Teacher Wei Qing said, **"Different channels, different profits; channel structure determines profit structure; and product structure determines profit structure."**
Regarding what products to handle, choice is often more important than effort. For example: A distributor in East China mainly handles dry powder and pickled vegetable categories of second-tier brands, with annual sales of hundreds of millions. Although pickled vegetables are low-frequency consumption, gross profit can reach over 30%, and many manufacturers also provide monthly settlement support. At the same time, this distributor does some OEM, accounting for 50%.
In terms of channel structure, they mainly focus on small shops, communities, and agricultural trade channels. This low-attention, low-competition industry allows the distributor to make a fortune, with small shop sales staff having a base salary of 6,000 yuan and a commission rate of 6%, with monthly salary basically above 10,000 yuan.
This is a case of high profits brought by different product choices. Of course, different channel types match different product categories, specifications, and packaging, such as:
> **Agricultural trade:** Restaurants buy in bulk, need large packaging for soy sauce, vinegar, chicken essence, hot pot base, and pickled fish.
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> **Prepared dishes:** Catering is segmented, different channels have different product needs.
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> **Stations:** Large box container noodles.
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> **Township:** Looks affordable, 20-bottle water.
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> **Village:** Product lines can be diversified, various gift boxes, well-packaged and affordable products, high-low combinations.
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> **Beer:** BBQ stalls need plastic bag beer, restaurants need boxed beer, large restaurants need pure draft and Augerta, famous liquor and cigarette shops need unseen products, nightclubs need small bottles.
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> **Shampoo:** Villages need small sachets, supermarkets need 200ml bottles, bath centers need 1-liter bottles.
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> **Ham sausage:** Supermarkets need low-temperature + room temperature, 10 per bundle; schools need 1-yuan items; restaurants need large square legs.
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> **Beverages:** Closed channels like residential areas, schools, and small restaurants need glass bottles; street vendors need medium plastic bottles; supermarkets and restaurants need large bottles.
At this point, many distributors may wonder, "I am a distributor for Mengniu, Yili, or Master Kong. The brand's tasks are heavy, and capital pressure is high. Seeing the above cases, should I abandon big brands and specialize in small categories and small brands?"
Of course not. First-tier brands naturally have their role. Distributors should use first-tier brands to bring networks and customer relationships, and cannot abandon them. But at the same time, they should not give up the agency of second- and third-tier brands because of first-tier brands. Teacher Wei Qing said, **"There is no product that doesn't make money; you just don't make money."**
Distributors must clearly know **the function and positioning of each product they represent. Net profit looks at "who earns more"; annual return on investment looks at "who is more cost-effective"; sales proportion looks at "who supports the team"; outlet proportion looks at "who brings the network."**
When companies make marketing strategic plans, they often use a term called "top-level design." We believe that even a small trading company needs top-level design. Do current things, look at future directions. Current big brands cannot be abandoned, but they don't make much money. To make money in the future, you must plan and layout in advance: what products should I represent, and what channels should I operate?
For example, as mentioned in Teacher Wei Qing's course, **catering, township, and village markets are relatively blue ocean markets. Existing brands are insufficient to cover township and village markets due to cost. At this point, can you consider adding product structure? Even in the early stage, you can be a second-tier distributor for first-tier well-known brands, first "nurturing" the channels and team.**
When gradually mature, then add second- and third-tier products, thereby gaining profit growth.
Nothing is achieved overnight. Any operation cannot achieve profitability immediately. You need forward-looking thinking, set future business goals and paths for the trading company, and achieve them step by step.
**Category combination forms a transformation of business model**
**All problems are product problems; product structure determines profit.**
**Survival of the fittest is an eternal law of survival.** Distributors must not only adapt to environmental changes, actively embrace the Internet, use digital tools to improve operational efficiency, but also continuously train and upgrade their "internal skills." In the next 2-3 years, the number of distributors in a regional market will definitely decrease, which is inevitable.
**With the evolution of distributors, what remains will definitely be "quality" distributors. What is quality? Can distributors transform from a past individual business entity or business gang into a standardized trading company?**
A key criterion for a standardized trading company is whether it has "category management capability."
For example, through product combination, broaden the density, width, and depth of categories, and become a category distributor. Currently, category distributors in leisure food and condiments are relatively common;
Root in small catering shops, meet the shop's needs from disposable bowls and chopsticks at the front counter to daily ingredients in the back kitchen, and become the sole supplier for the shop.
Of course, it can further evolve into a regional supply chain enterprise, meeting one-stop ordering for shops. Become a comprehensive trading enterprise with multiple brands and multiple SKUs.
With the above transformation, **distributors no longer look at the sales and profit of a single product or a single store, but truly plan from the perspective of business operation: how to increase the sales share of stores, which products are "cannon fodder" in competition, and which products need to be profitable at the current stage. Through category management, achieve a balance against competitors and maximize category share.**
I believe that in the future, more and more distributors will expand their category combination boundaries to become "super merchants" in a regional market.
Back to the topic, **if a distributor worries about sales staff management every day, afraid to manage and afraid to penalize, to be honest, this is a "quite unambitious" thing. Put aside employee management issues for now; the primary task for distributors is to think about how to design products and channels to make the company more profitable!**
The above content is part of my insights and understanding after learning Teacher Wei Qing's course.
**Who is Teacher Wei Qing?**
A true big shot, whose reputation is bestowed by the industry and time.
In the era when DVD and video were prevalent, Teacher Wei Qing's disc training courses were already popular across the industry. If you haven't heard of his disc courses, it only means you weren't at the forefront of marketing trends during that period.
Since Teacher Wei Qing entered the marketing training industry in 2002, he has been invited to provide series of national touring marketing training by: Uni-President 43 times, Midea Group 34 times, Yihai Kerry 10 times, Hengan Group 11 times, TCL Group 14 times, Konka Group 12 times, French PAREX Group (Dekao Building Materials) 16 times, Joyoung Soymilk Maker 9 times, Supor Group 9 times, Synutra Dairy 15 times, Moutai Group Xijiu Company 9 times, Stanley Fertilizer 25 times, Mengniu Dairy 5 times...
His courses are "heard in the morning, usable in the afternoon!" His classic representative bestsellers "The Terminal Sales Secret Manual" and "Distributor Management Action Decomposition Training" are now regarded as "must-read for entering the FMCG industry."
**New Distribution has made three visits to invite Teacher Wei Qing to support the "Trillion Growth · 2019 China FMCG Conference." This time, at the "2019 China FMCG Conference" hosted by New Distribution, we are honored to invite Teacher Wei Qing to share content on how distributors assess and manage sales teams.**
**Benefits are coming!**
If you are a FMCG professional or distributor who has benefited from Teacher Wei Qing's courses, please forward and leave a comment sharing your feelings about Teacher Wei Qing's courses, or your practical application cases after listening, or what you most want Teacher Wei Qing to talk about at the Shanghai conference in August. All friends participating in this activity have the opportunity to receive the following benefits prepared by New Distribution:
**Benefit 1 (Top 10 comments with the most likes at the end of the article):**
**Receive two books signed by Teacher Wei Qing: "The Terminal Sales Secret Manual" and "Distributor Management Action Decomposition Training." A total of 10 spots.**
**Benefit 2 (Forward to friends and get over 50 likes):**
**Receive 2 tickets worth 999 yuan each for the "Trillion Growth · 2019 China FMCG Conference" from August 20-23, to attend Teacher Wei Qing's live course. A total of 10 spots.**
Note: Add the editor's WeChat below, screenshot and send to the editor to claim the benefit.
**Benefit 3 (Select 5 "thoughtful" commenters):**
In the comment section below, please voluntarily forward and leave a comment sharing your feelings about Teacher Wei Qing's courses, or your practical application cases after listening, or what you most want Teacher Wei Qing to talk about at the Shanghai conference in August. **New Distribution will select 5 commenters to receive a VIP annual card for Teacher Wei Qing's 2019 online video course, valued at 1,200 yuan/year. A total of 5 spots.**
Your feedback is important to us. We look forward to your participation!
Teacher Wei Qing's 2018 training video | Seize "New Product Sell-through, TOP50 Stores"
Tips will be paid 400-2000 yuan once adopted.
**China FMCG + Internet Professional New Media**
**Committed to FMCG manufacturer and distributor transformation and channel digital solutions**


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