---
title: "Distributors Can Still Make a Fortune by Mastering These Five Details When Taking on Established Market Products"
description: "Products are the weapons distributors use to make money. While much discussion focuses on selecting strategic new products, distributors may also take on established market products. This article outlines five key details to consider when taking on such products, illustrated with real cases and expert advice."
author: "冯媛"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-07-31"
language: "en"
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# Distributors Can Still Make a Fortune by Mastering These Five Details When Taking on Established Market Products

> Products are the weapons distributors use to make money. While much discussion focuses on selecting strategic new products, distributors may also take on established market products. This article outlines five key details to consider when taking on such products, illustrated with real cases and expert advice.

**Products are the weapons distributors use to make money. How to choose the right weapon has always been a major concern for distributors. We often discuss the topic of "how distributors choose strategic new products." In fact, "new products" are only new from the distributor's perspective. For the market, the products a distributor chooses may be new to the local market, but they could also be established market products.**
Here, established market products refer to products that have already appeared and been sold in the local market, with distributors already distributing or selling them. So, what issues should distributors pay attention to when taking on such products?
Case Review: A New Distributor Faces Chaos When Taking on an Established Product
Recently, Manager Mao from Feixiang County, Hebei Province, shared the operational difficulties he encountered: At the beginning of this year, Manager Mao just entered the distributor ranks. On the recommendation of a friend from another region, he chose to take on a first-tier brand of leisure food. This brand had been sold in the Feixiang County market, previously handled by a distributor from the city. Because the old distributor had limited energy and covered less than 50% of the terminals in Feixiang County, the manufacturer decided to revoke his distribution rights for Feixiang County and give them to Manager Mao. However, after Manager Mao paid for the goods and started distributing, problems arose: The old distributor was unwilling to give up the rights and began low-priced cross-region dumping. Although Manager Mao tried to solve the problem with even lower prices, the results were poor, and Manager Mao was very troubled.
In fact, the problem Manager Mao encountered can be classified as a "cross-region dumping" issue, which is common in the market. During interviews, many distributors said that to compete for channels or simply to make money, cross-region dumping is everywhere.
Moreover, they have summarized certain methods: First, communicate with the manufacturer, as their intervention can simplify control. If the manufacturer does not proactively handle it, then it tests Manager Mao's ability to control the local market. The key is to maintain customer relationships, as the old distributor's main network and manpower are in the city, making it difficult to maintain the county-level market well. Also, policy support is needed: use big policies for big customers and small policies for small customers. Later, with capital, you can negotiate with big customers and key accounts to take over the old distributor's business.
However, some distributors also said that this problem could have been avoided. "Since there was a previous distributor, you should have communicated with the old distributor before choosing to take it on, or made preliminary inquiries from the side," said Manager Sun from Jiangsu. "If Manager Mao had understood these situations in advance and anticipated them, this problem might not have occurred." Manager He added: "Now it's just a dumping problem. What if the product had quality issues in the local area before?" Tracing back to the root, when a distributor chooses to take on an established market product, anticipating possible problems and preventing them in advance will bring many conveniences to subsequent operations.
In a follow-up, Manager Mao said that the manufacturer's salesperson finally provided a solution: The manufacturer split the product lines between the two distributors, assigning the new products to Manager Mao, which concluded the distributor change. According to a survey, 82% of distributors are currently or have previously taken on established market products. This shows that compared to eye-catching new products, established market products are equally worth discussing and studying.
**Detail One: Expert Advice – Check Item by Item to Avoid Chaos**
Taking on established market products has both advantages and disadvantages for distributors, and it needs to be viewed dialectically. From a market experience perspective, for a new product, many market factors are unknown. Even if you have the opportunity to inspect surrounding markets, you might get the result "oranges south of the river are oranges, north of the river are trifoliate oranges," making the reference value low. For an established market product, the old distributor has already tested the waters, providing valuable experience and reference.
So, what kind of established products can be taken on? Wang Guanqun, president of Beijing Yingxiaoli Enterprise Consulting Agency, said that if you want to or are currently taking on an established market product, you should first examine the product itself. Generally, it should meet at least one of the following conditions:
**First-tier brands can be taken on.** Having passed market tests and the scrutiny of many distributors, first-tier brands generally have no major issues in terms of product quality and manufacturer credibility, and their market is relatively broad.
**Brands that conform to the "Law of Duality" can be taken on.** From an overall and long-term perspective, the market often evolves into a situation where two major brands compete—usually one is a trusted old brand, and the other is a rising star. Terminals will think, "They must be the best because they are the leaders," so the top of the market always has two brands competing, and they will develop together through competition.
**Challenger brands can be taken on.** Challenger brands imply differentiation and breakthrough. If it is an imitative product, its growth space will be limited.
**Products with distinctive features can be taken on.** In this fiercely competitive industry where most categories are red oceans, a product with characteristics and uniqueness can potentially create a new market.
**However, after a product meets the above basic information, can distributors confidently take it on?** Wang Guanqun emphasized that there are differences compared to taking on new products. As an established market product, environmental factors and market conditions also need to be understood in a timely manner.
**Understand the reason for changing distributors.** Was it because the old distributor's level of dedication was too low, or were there problems with operational capabilities? Distributors need to learn about the old distributor through direct and indirect channels and compare their own product operation capabilities with the old distributor's. If the old distributor gave up the brand despite high dedication and strong operational capabilities, it is recommended that distributors consider carefully. **Examine the product's impression in the market.** Has the category entered a decline phase? What is its ability to sustain momentum?
The old distributor's withdrawal from the product may be due to a prediction of the category's development potential. For example, if carbonated beverages have entered a decline phase, it will be difficult for a new distributor to take them on. Product quality is the foundation of development, and whether the product has had quality issues is a key issue distributors should understand. Additionally, the product's existing terminal impression and market reputation in the local area are also issues distributors need to examine.
**Pay attention to legacy market issues.** In addition to the product issues and market conditions mentioned above, channel-level information is crucial for a smooth transition between old and new distributors. Understanding the old distributor's inventory situation can largely avoid cross-region dumping after taking over. Also, check whether the old distributor has unfulfilled promises from the manufacturer, such as rebates, promotions, or fees, and whether similar issues exist with secondary wholesalers. That is, whether the verification and settlement issues are clearly resolved. Whether there are soon-to-expire products in the secondary wholesalers and terminals, and the attitudes of secondary wholesalers and key accounts, are also vital for a smooth takeover. Of course, no distributor would take on a product whose price system has been damaged.
**Detail Two: Stones from Other Hills Can Attack the Market**
In this survey, among distributors who said they are currently or have previously taken on established market products, the reasons and scenarios vary: 47% took over because the old distributor's poor management led the manufacturer to change distributors; 22% actively sought the product because they found the market promising; and 27% took over because the old distributor neglected the product. Overall, the majority of distributor changes were due to poor product management in the local market. The reporter interviewed some of these distributors and asked them to share their experiences.
**Detail Three: Prior Understanding, Emphasis on Communication**
Similarly, a county-level distributor, Manager Zhang, mainly handles beverage distribution, covering circulation, supermarkets, and some special channels, with a relatively comprehensive network. When the salesperson of first-tier brand A approached Manager Zhang, she was quite happy: "This brand is dominant in our market, with very impressive sales. It can be said that the combined sales of other products in the same category are less than one-third of Brand A." However, Manager Zhang first conducted research in surrounding areas, including asking terminal stores about the product's market situation and understanding consumer interest in the product. She also contacted surrounding distributors to learn about the cooperation between the manufacturer and distributors, the manufacturer's support policies, and marketing strategies. Everything seemed fine. Unexpectedly, when Manager Zhang returned to her local market for final checks, problems emerged.
"If I took it over, I couldn't do it at all," Manager Zhang said. "The salesperson who came to me didn't tell the truth, only saying that the previous distributor wanted to change careers. Fortunately, through a friend, I found the old distributor and communicated with him, and only then did I learn that the product's price system was in chaos. Otherwise, if I had paid over a hundred thousand yuan at once, I would have really lost it."
**Detail Four: Rational Analysis, Comprehensive Consideration**
Chen Liang, a distributor from Jinhua Commercial and Trading Co., Ltd. in Yingshan County, Hubei Province, previously mainly handled cold drinks. Due to few brands and reduced willingness of terminal stores to sell, he began looking for other categories two years ago. By chance, he saw an advertisement for Xiaoyangren on TV. Through communication from surrounding areas to the local market, from terminals to distributors, Chen Liang learned the following: The manufacturer pays attention to product quality issues, and the task assessment for distributors is relatively humane. However, the manufacturer's thinking is somewhat outdated, and the product's appeal is not high. Compared with competitors like Nutrition Express and Dali Youxianru, the profit is similar, so terminals prefer first-tier brands that sell quickly.
Xiaoyangren also had channel issues locally: 1. The terminal stores had been supplied by the old local distributor for too long and were unwilling to share risks with a new distributor. After taking over, Chen Liang might be pressured by the manufacturer above and terminals below. 2. Xiaoyangren did not focus on market maintenance locally; expired products were often left unattended, and out-of-stock items were not delivered promptly, causing complaints from local terminals. However, local consumers did not dislike the brand. After careful consideration, Manager Chen believed that the current market problems could be improved through his own operations. Most importantly, there were no issues with product quality or consumer perception. After comprehensive consideration, Chen Liang decided to take on the Xiaoyangren brand, which has now become his main brand.
**Detail Five: Adjust Strategy, Start Anew**
Hubei distributor Li Changxu mainly handles first-tier condiment brands such as Lee Kum Kee, Daqiao, and Dahongpao. Among them, Lee Kum Kee was an established market product taken over from an old distributor. When the salesperson approached Manager Li, he learned from customers that as a first-tier brand, Lee Kum Kee had no issues with product quality or market satisfaction. However, because the old distributor thought the product's profit was too low and the manufacturer's support was insufficient, he did not focus on Lee Kum Kee. He also set terminal prices too high, causing slow sales at terminals, and he himself was pressured by the manufacturer to stock up, making it unsustainable.
"After taking over, I have already adjusted the terminal prices down," Manager Li introduced. The first thing he adjusted after taking over Lee Kum Kee was the price. Although this inevitably reduced channel profits, maintaining customer relationships was important in the early stage, and he increased promotions and service to customers. Moreover, lowering terminal prices boosted product sales, and higher volume naturally led to increased profits, gaining recognition from customers and terminals. "At present, it seems that completing the manufacturer's tasks this year is not a problem," Manager Li said.
In fact, whether distributors take on new or established products, they should consider issues that may affect their own operations and product sell-through before taking them on. Being "prepared for the rainy day" will bring more convenience to subsequent operations.
-END-
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