What do distributors need from manufacturers? This is a seemingly simple topic, yet it is also a complex one that is difficult to clarify. As the name implies, distributors are responsible for distributing products to various channels, providing after-sales service, and maintaining customer relationships. But what should manufacturers do? Is it simply helping customers distribute products? Is it just providing rebates and promotions? Obviously not.
In fact, for manufacturers to know how to support distributors, they must first understand what distributors want. Only by grasping distributors' intrinsic needs and working around those needs can manufacturers and distributors truly align, move in step, and achieve a win-win situation.
Distributors at different development stages have different intrinsic needs.
In other words, distributors at different stages have different requirements and expectations of manufacturers. This is like a person walking in the desert: they need life-saving water, but you give them bread—clearly inappropriate. A savvy manufacturer representative can discern distributors' needs, adapt to the situation, prescribe the right remedy, and truly partner with distributors through a brilliant collaboration journey.
Distributors can be categorized by development stage: startup, rapid growth, and maturity. Manufacturers should provide different types of help and support based on these stages.
- Startup Stage
Flowers bloom similarly each year, but people are different each year. In the distribution field, new distributors emerge annually, while some old ones fade away. This is the law of competition; no one can avoid it. But how should a manufacturer, especially a small or medium-sized enterprise, work with a new or startup distributor? This still requires exploring the distributor's real or potential needs.
First, a startup distributor may lack capital—this is undeniable. At this point, if the manufacturer can provide credit through collateral such as real estate or vehicles (movable or immovable property), enabling the distributor to act freely, that would be ideal. The result would be the distributor's gratitude and increased effort to promote the product and strengthen the market.
Second, startup distributors often lack experience. They need manufacturers to provide a comprehensive market support package, especially hands-on personnel assistance. This includes regular training for the distributor and their staff, such as business concepts, marketing concepts, market operation skills, and management training. Through coaching, manufacturers can pass on knowledge and skills, helping distributors quickly master necessary market operation skills and mature sooner.
Third, distributors need encouragement from manufacturers. Startup distributors, often new to the market, are psychologically fragile and need continuous motivation to maintain high morale and enthusiasm. This encouragement includes recognition of their market operations, timely praise for small progress, material rewards (e.g., rebates) and spiritual rewards (e.g., training opportunities, trips) for performance achieved through effort, as well as gentle reminders when they deviate from the company's direction or goals.
Finally, manufacturers should delegate authority boldly, encourage distributors to operate, and allow them to innovate in market operations, permitting mistakes outside of principles (e.g., cross-region selling or low-price selling are principle violations). Because they are in the initial stage, they have a blank slate for market operations, often more creative, and more likely to summarize and refine new operation models.
For example, a manufacturer nurturing a startup distributor not only helped coordinate delivery vehicles to speed up capital turnover and avoid capital shortages but also assigned an experienced salesperson for hands-on guidance. Based on seasonal sales changes, they summarized holding three order meetings at different times each year and developed a "two differences, two highs" marketing strategy: "product differentiation, high price, high promotion, and promotion differentiation," achieving good market results. Within just three years, this distributor became the manufacturer's largest distributor in the eastern region.
- Growth Stage
Most distributors are in the growth stage. This stage sees rapid development but also the most problems. Therefore, manufacturers must continuously guide and educate distributors during the sales process, correct deviations, and meet their needs while achieving common goals.
First, growth-stage distributors, due to rapid business and personnel expansion, most need to achieve true corporate operation, aligning market growth with internal management improvement. From this perspective, manufacturer personnel should assist distributors in "establishing rules and regulations," such as recruitment systems, personnel management systems, operation processes and standards, customer management, inventory management, logistics management, and market management. By operating according to "law," distributors can enter a standardized, institutionalized, and process-oriented management track.
Second, since it's a rapid growth stage, there is a need to develop blank markets and outlets extensively. This requires manufacturers to send personnel to plan development for blank markets and outlets, assist distributors in developing downstream customers, especially key accounts. This not only helps distributors but also, from another level, better controls downstream channels and thus the entire market. Therefore, assisting distributors in market development and continuously improving market coverage and share is especially important for growth-stage distributors.
Third, growth-stage distributors also need marketing support, including marketing policies, promotional support for various channel levels, personnel support, and merchandising support. Additionally, coaching support must keep up, meaning through coaching models, help distributors build a sales team capable of fighting hard, tough, and fierce battles, including downstream customer teams. This requires comprehensive support through meetings, coaching training, and intensive training.
Finally, manufacturers should provide consultative and advisory sales to distributors at this stage, acting as economic advisors and business consultants. They should use market information to judge future product and market trends, guide distributors to make timely transformations or adjustments, and provide strategic guidance and help for management and operations, thereby establishing a new model of integrated manufacturer-distributor development.
For example, a manufacturer's sales manager, seeing his client consistently selling low- and mid-end products, analyzed future trends of personalization and high-end products, and advised adjusting the product structure to focus on promoting the company's leading high-end products, aligning with the company's direction. Then, the sales manager trained the distributor and staff on high-end product promotion skills, teaching them methods and techniques for selling high-priced products. During the sales process, he also answered sales consultations anytime, solving various questions. Through such dedicated support, the distributor quickly adjusted the product structure, and profitability improved significantly.
- Maturity Stage
Mature distributors are sought after by many manufacturers. They have strong strength and sound networks. By leveraging their powerful operations, manufacturers can quickly distribute products, achieving twice the results with half the effort, like irrigating fields through channels.
But as everything has two sides, mature distributors have obvious advantages, but the difficulty of manufacturer support increases significantly. At this stage, manufacturers must do what is necessary, what they can do, and fill gaps, providing three-dimensional support.
First, under the premise of not violating overall distributor and manufacturer interests, provide maximum market growth space, such as regional or cross-regional exclusive agency for new products, giving them a larger sales scope. By granting certain "enclosure" rights, while fully ensuring profit maximization, they can also make the market stronger and bigger, maintaining relative monopoly in certain product, channel, and geographic scopes. Through relative monopoly, enhance their profitability and lasting loyalty to the manufacturer. Of course, within controllable scope, OEM models can also be implemented.
Second, manufacturers should conduct deep co-marketing and deep distribution with distributors, helping them refine market channels, and conduct high-density penetration of markets, channels, and consumers. For example, help distributors develop new markets, eliminate blank outlets, reduce or eliminate zero-shipment customers, and conduct one-on-one deep communication with customers at channel terminals, thereby refining the market, expanding market share, and improving product and brand awareness and reputation.
Third, mature distributors, due to relatively mature markets and stable returns, prefer manufacturers to be good referees and maintainers of market order. They worry most about market chaos due to poor manufacturer management, which could ruin years of hard work. Cross-region selling, dumping, or low-price selling could prevent them from earning what they should. Therefore, at this stage, if manufacturers enforce market management firmly, distributors will be grateful and genuinely convinced.
Finally, mature distributors also hope manufacturers have stable policies, including stable support for products distributed, price maintenance, and support intensity, rather than changing policies frequently, leaving distributors confused.
In summary, whatever manufacturers do, they must be rooted in the market and fit distributors, not like "a blind man riding a blind horse, approaching a deep pool at midnight." Only by exploring distributors' intrinsic needs based on their development stage and rationally allocating resources can manufacturers truly stand undefeated alongside distributors in competition with rivals.
Introduction: Cui Zisan, master's degree in senior business administration, renowned marketing practical training expert, and expert in distributor strategic development research. With over ten years of frontline marketing practical experience, he has served as planning director and marketing director in several large enterprise groups, including national marketing director of Jinxing Beer Group, one of China's top four beer companies, and senior consultant at Shanghai Lianzong Zhida Consulting Agency.
Source: Cui Zisan Marketing Vision -END-