---
title: "Distributors: Mid-Autumn Peak Season, Slow Terminal Payments, How to Break Through?"
description: "Slow payments and long accounts receivable cycles have always been major headaches for distributors, and they are also matters of life and death, especially with the upcoming Mid-Autumn Festival and National Day peak season. Recently, the author chatted with Wang Hua (pseudonym), a distributor in a county-level market in southern Jiangsu, who mentioned, 'Generally, a distributor needs to prepare three sums of money: first, payment to the manufacturer for goods; second, the cost of normal warehouse inventory; third, the supermarket credit period, the money tied up in accounts.' Money never seems to be enough..."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-08-30"
categories: "Dealer Operations"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/distributors-mid-autumn-peak-season-slow-terminal-payments-how-to-break-d9f5a3c6.md"
original_source: "https://mp.weixin.qq.com/s/yjw9A0SdID2Gt5BYYFKmIg"
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citation: "New Distribution. “Distributors: Mid-Autumn Peak Season, Slow Terminal Payments, How to Break Through?.” New Distribution, 2019-08-30. https://xinjignxiao.com/en/articles/distributors-mid-autumn-peak-season-slow-terminal-payments-how-to-break-d9f5a3c6/"
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---

# Distributors: Mid-Autumn Peak Season, Slow Terminal Payments, How to Break Through?

> Slow payments and long accounts receivable cycles have always been major headaches for distributors, and they are also matters of life and death, especially with the upcoming Mid-Autumn Festival and National Day peak season. Recently, the author chatted with Wang Hua (pseudonym), a distributor in a county-level market in southern Jiangsu, who mentioned, 'Generally, a distributor needs to prepare three sums of money: first, payment to the manufacturer for goods; second, the cost of normal warehouse inventory; third, the supermarket credit period, the money tied up in accounts.' Money never seems to be enough...

Slow payments and long accounts receivable cycles have always been major headaches for many distributors, and they are also matters of life and death, especially with the upcoming Mid-Autumn Festival and National Day peak season, the situation seems even more acute.
Recently, the author chatted with Wang Hua (pseudonym), a distributor in a county-level market in southern Jiangsu, about capital usage. He mentioned, "**Generally, a distributor needs to prepare three sums of money: first, payment to the manufacturer for goods; second, the cost of normal warehouse inventory; third, the supermarket credit period, the money tied up in accounts.**"
**Money never seems to be enough**
Wang Hua is a distributor of leisure foods with annual sales of 20 million yuan, representing first-tier brands such as Qiaqia, Want Want, and Orion. Although these are first-tier brands, he inevitably faces the issue of credit periods with downstream store customers.
According to him, to encourage stores to order, he offers credit periods ranging from one week to one month to some stores. On the due date, store owners who keep their word are decent and can pay back on time. But when encountering those who don't keep their word, when the 25th arrives as the settlement date, they start making excuses, either not being available or asking to wait, indefinitely delaying payment. "Alas, there's no way around it. Between manufacturers and distributors, manufacturers are the bosses, so it's cash before delivery; between retail stores and distributors, retail stores are the bosses, so it's goods before payment. Distributors are in the middle, very passive," Wang Hua lamented. If it weren't for these funds being tied up in stores and not collected, he could take on another brand and expand his business. He told the author, "Don't laugh at me, but even though we are bosses, we use various financial tools every day, such as WeChat's WeLend, Alipay's Jiebei, and bank credit cards. We use all of these. There's no choice. When the peak season comes, you have to stock up in advance. To encourage downstream stores to sell more, you also have to find ways to push goods to them, and in the process, credit sales are inevitable."
Regarding credit sales and arrears, a distributor from Fuzhou, Jiangxi, once told the author that it's not that distributors want to sell on credit; it's that there's no choice. Sometimes credit sales are necessary. Nine out of ten people are selling on credit; if you don't, you might lose that order.
Unless your brand is a fast-moving product that stores must sell, but how many such brands are there? To promote new products and sell more during the peak season, credit sales are unavoidable. You've already taken on the agency for the product, the goods are already in the warehouse, and they're just sitting there. It's better to sell on credit and put them in supermarkets. You've signed a task with the manufacturer, so you must sell them. **For distributors, money never seems to be enough!**
**Reduce capital loss, increase capital returns**
As everyone knows, the overdue time of accounts is inversely proportional to the average collection success rate. Generally, the longer the account is outstanding, the smaller the chance of successful collection. Demand payment immediately after the debt matures, and never let customers develop a habit of delaying payment. Of course, this is the conventional path. Distributors who have been in business for years have increasingly realized the importance of timely collection. **But these are not enough. The above methods can only reduce the problem of 'bad debts and defaulted debts' for distributors; they only hope stores can pay on time. This cannot fundamentally improve the efficiency of capital use for distributors: reducing capital loss and increasing capital returns.**
In fact, regarding capital use, the conventional approach for distributors is often to think about increasing the amount of capital from various channels, such as pledging fixed assets for bank loans; or trying to obtain credit limits from manufacturers with whom they have close and stable cooperation. Another example is using deposit guarantees to open bank acceptance drafts to pay upstream manufacturers. Although these are also ways, from the perspective of operational difficulty and sustainability, distributors cannot effectively improve capital efficiency through the above methods.
Besides increasing the capital pool, is it possible to 'indirectly' finance through downstream stores? One of the key roles of distributors for manufacturers is as a financing and advance payment platform. As distributors with wholesale functions, to some extent, they should also view downstream stores as financing and advance payment platforms.
For example, regularly holding ordering conferences for products or new products and collecting deposits or payments from downstream customers in advance is one way to reduce capital pressure. Additionally, to increase customers' willingness to pay proactively, distributors can formulate corresponding incentive policies to encourage customers to actively pay. For example, those who pay on time can be given a certain percentage of rewards or preferential sales policies, making some concessions on rebates to speed up the collection of payments.
If stores pay on time and distributors give rewards, this kind of method is a relatively common solution nowadays. But is it possible to get stores to pay early, especially during the peak season, turning downstream customers into a 'financing' platform, getting payments early in the peak season, thereby reducing the capital loss of distributors in offline stores and increasing capital returns?
Of course, to develop downstream customers into financing platforms, there are still issues of mutual trust and certain risks. **Currently, some distributors have run away, and some stores have closed. So to transfer risks, a sufficiently professional third party is needed to play the platform role.**
**Winlink Supply Chain Finance - Merchant Loan** is a supply chain financial product that helps distributors turn downstream customers into a 'financing' platform. Simply put, Merchant Loan is a financial tool that connects the transaction flows between distributors and stores, allowing banks to directly support stores and provide credit support to them.
**Increase more business opportunities**
According to the author, the positioning of Winlink-Merchant Loan is to **help distributors increase more business opportunities**, which is mainly reflected in two levels:
**First, during the peak season, help distributors accelerate the collection of payments from downstream store customers.** For example, during the Mid-Autumn Festival, many stores pay for categories such as tobacco, alcohol, and gift boxes, and cannot pay other categories to distributors in time. At this time, distributors can use Winlink-Merchant Loan to provide credit to stores through banks. The distributor designates the payment, and the store settles with the distributor.
**Second, during the off-season, help distributors develop more downstream (supermarket) stores.** For example, some individual supermarket stores (over 500 square meters) are 'big customers,' but because stores are the strong party, requiring credit periods is common, and the credit period is often more than one month. At this time, many distributors have no choice but to cooperate, constrained by credit pressure; many others simply do not cooperate or cooperate less, reducing business opportunities. Distributors using Winlink-Merchant Loan can support stores in the form of a 'large credit card,' allowing stores to increase transaction frequency and amount, and reduce credit periods.
**Regarding the steps to expand Merchant Loan:**
> 1. The distributor applies and signs a letter of intent for cooperation (including distributor disclaimer clauses); 2. The distributor adds stores through 'Enterprise Connect' and invites stores to register; 3. Stores obtain credit limits (store registration takes 2 minutes); 4. Local banks approve online, obtaining a maximum credit limit of 300,000 yuan; 5. Payments can be made to the distributor at any time.
**Regarding Merchant Loan interest and fees:**
> 1. Daily interest rate is 3 to 3.9 ten-thousandths, monthly interest rate up to 1.17%, calculated daily, and stores can repay at any time; 2. If distributors expect immediate payment or want to develop 'big customers' during peak or off-season, they can collect payments on the spot in the form of product rebates or direct interest subsidies; 3. Distributors with annual turnover exceeding 3 million yuan can apply for cooperative merchant project loans for free.
If a tip is adopted, a reward of 400-2000 yuan will be paid.
**China FMCG + Internet Professional New Media**
**Committed to FMCG manufacturer and distributor transformation and upgrade and channel digital solutions**


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## Citation metadata

- Publisher: New Distribution
- Author: New Distribution
- Published: 2019-08-30
- Canonical: https://xinjignxiao.com/en/articles/distributors-mid-autumn-peak-season-slow-terminal-payments-how-to-break-d9f5a3c6/
- Original source: https://mp.weixin.qq.com/s/yjw9A0SdID2Gt5BYYFKmIg

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