When I provide consulting services to many distributors, I often ask them, "What is your company's strategy this year?" Many distributors tell me, "This year we aim to achieve 30 million," or "50 million," etc. They often think this target is their strategy. I tell them that is only a small part of your strategy; it is the sales target you want to achieve this year, not your strategy. Indeed, many distributors do not have a clear understanding of strategy. We say that if an enterprise lacks strategy, it is very frightening. Without strategy, you have no direction for action; you only have tactics, which can only win temporary victories. Strategy determines direction. Let me first look at the understanding of the word strategy. Strategy: In the "Harvard Classics" column of Harvard Business Review (US), an article by Michael Porter, "What Is Strategy?" was summarized. In this article, Porter not only made new explanations of the meaning of "strategy" but also added new annotations. "Strategy" is first "creating a unique and advantageous position," second "making trade-offs in competition, the essence of which is choosing what not to do," and third "establishing fit among the company's activities." This is the literal understanding; we cannot expect distributors to clearly understand it from the text. Today I am not here to discuss the meaning of strategy. Let's look at my understanding of strategy from a practical perspective: Strategy primarily solves three problems:

  1. Where am I? – That is, the current situation of your enterprise.
  2. Where do I want to go? – The future development direction of your enterprise, your values, and the positioning of medium- and long-term goals.
  3. How to get there? – The path the enterprise chooses to take. This is what strategy can solve for our enterprise. It enables us to have a good plan for the direction of enterprise development and the formulation of tactics, not just doing things as they come. How distributors formulate strategy is not detailed today (please refer to my article "How Distributors Set Strategy"). Several thoughts on distributors setting strategy:
  4. What is the core value of a distributor? As a distributor, what is your core value? What truly belongs to you? Some distributors will say, "I have several big brands in hand, and I have so many terminal channels." I ask, do these really belong to you? I say not necessarily. In recent years, many companies have been flattening channels. In relatively developed areas, many companies have proposed direct operation of terminals, setting up branch offices or representative offices locally, bypassing the distributor link and cooperating directly with terminals. You say you have well-known brands; I think those are not yours either. If you are slightly disobedient, you may be replaced. Now market competition is fierce, many product prices are highly transparent, and manufacturers' control over terminal price systems has strengthened, leaving distributors with increasingly lower profit margins. To some extent, distributors are just advanced porters. To break this shackle, you need good ideas and not be obsessed with having a well-known brand. To become a super distributor, you must first establish a talent system. Only when you have talent can you solve the problems of enterprise development. Second, a management system. Imagine if you register a company but still manage it in a family-style way, can your enterprise develop? To grow and strengthen, you must adopt a corporate operation system, establish a sound incentive system, financial system, marketing management system, etc. Third, channels. Although channels are also a public resource and not exclusive to your distributor, when you have a sound channel system, brand owners must cooperate with you to quickly develop your market. If they come to you, you have the initiative, and conditions are easier to negotiate.
  5. Where is the future development path for distributors? Now companies like Lay's, Oishi, and Coca-Cola set prices for distributors at factory price, then give rebates based on the distributor's sales volume. Of course, in economically developed areas, their terminals are directly operated, and distributors are just delivery providers, receiving a delivery fee of a certain percentage based on delivery amount. For a time, many distributors feel a sense of "the wolf is coming," thinking they will gradually be eliminated by the market. If companies do it themselves, what is left for us? I think there is no need to worry too much. Direct operation by enterprises is an inevitable trend in market development, and channel merchants also like this because it makes their prices more competitive. How should distributors face this?
  6. Recognize the situation and change concepts.
  7. The company still operates.
  8. Branded management.
  9. Branded channel operation Today I propose branded channel operation. Some may think that channel operation can also be branded. My branded operation mainly refers to:
  10. Walking ahead of brand enterprises Many distributors operate channels without any method, without systematization, such as customer data establishment, customer sales analysis, customer grade management, customer location, work report management, etc. Imagine when an enterprise comes to your market and sees your meticulous management, they will feel assured handing over their products to you. Even if they go direct, they will first consider you as a delivery partner.
  11. Professional channel management Is your channel management professional? Can you market based on sales data? Do you have a large share in those terminal customers? Only when you have professional channel management will your channel merchants and upstream brand enterprises value you.
  12. Professional channel marketing Enterprises fear distributors messing up the market, cross-regional selling, and damaging the price system. Distributors' channel promotions often do not consider the impact on the brand, and promotions for terminal channels are unplanned, with a passive attitude of "you ask, I give." As a link in the entire supply-demand chain, distributors play a connecting role, serving both upstream brand enterprises and downstream terminal retail channels. Distributor friends, does your enterprise have a strategy? Don't think that just because you registered a company, you are operating corporately. While busy every day, calm down and think deeply about how far you are from the needs of market competition. Finally, I wish distributor friends to go further and more steadily on the road of commercial circulation. Long press the QR code below, follow, and reply with number 1 to browse related articles by category.