---
title: "Distributors' Puzzles and Solutions: Talent, Management, Capital, Brand, and Channels"
description: "This article addresses common challenges faced by FMCG distributors in China, including talent retention, management efficiency, capital constraints, brand building, and channel strategy, providing practical solutions for each."
author: "崔自三"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-05-12"
language: "en"
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# Distributors' Puzzles and Solutions: Talent, Management, Capital, Brand, and Channels

> This article addresses common challenges faced by FMCG distributors in China, including talent retention, management efficiency, capital constraints, brand building, and channel strategy, providing practical solutions for each.

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**-01-**
**Talent Puzzle**
**Case:**
Mr. Li, from Yicheng Trading Company in Xiaoshan, Zhejiang, has been extremely troubled lately. The newly hired sales manager for alcoholic beverages left after less than three months, "slipping away like oil on the soles of his feet." Meanwhile, several business backbone employees he personally trained are becoming increasingly disobedient; if he demands slightly more, they even threaten to "drop the load." Outsiders are hard to retain, and those he cultivates himself, once their wings are strong, always think of "flying southeast." Faced with this situation, Mr. Li is deeply worried.
**Analysis:**
Many distributors likely empathize with Mr. Li's talent dilemma. Indeed, regardless of a distributor's size, staffing is essential. In the early entrepreneurial stage, distributors often rely on "family members" to address manpower shortages in product sales. However, as the number of agency categories increases, or after the entrepreneurial phase transitions into rapid growth, some distributors have developed a "prototype" of enterprise operation or have already implemented company-style management. At this point, relying solely on a few relatives as "loaders" is far from sufficient; using professionals for professional tasks must be put on the agenda. Consequently, recruiting needed personnel from society has become the first choice for some trendy distributors. However, due to the distributors' own limitations, including rough management, or even no management, lack of process and standardization, recruited personnel often lack a sense of belonging and room for advancement. They cannot envision future development prospects. Coupled with the lack of systematic training and promotion systems, when they see no "money" prospects, leaving becomes their choice and best strategy.
**Solutions:**
Distributors commonly face the phenomenon of difficulty in recruiting and retaining talent. To break through the talent bottleneck, distributors must first change themselves from the root: change their mindset and behavior. Only by first revolutionizing themselves can they change the talent dilemma.
**1. Change your mindset.** Many distributors, lacking learning ability, often remain stuck in the 1980s and 1990s. They are content with small wealth and do not seek significant development. They lack long-term vision. They often adhere to empiricism, always boasting of past glories, and even retain some habits of "sitting merchants." These habits leave a poor impression on the post-80s generation. To retain talent better, distributors must grasp the pulse of the times, keep pace with the times, continuously bring new trends and viewpoints to marketers or professional managers, enhance their own connotation, and attract talent with personal charisma.
**2. Retain people with culture.** Building a corporate culture, creating a good working environment and open atmosphere, is also an effective way for distributor enterprises to retain people. Not only should there be institutional constraints, but also a good internal corporate culture to regulate employees' work and life, forming a warm family-like atmosphere. For example, establish corporate culture platforms such as corporate philosophy, purpose, mission, and slogans. Through the boss's care and attention to employees' work and life, form a centripetal force and cohesion among employees, increase their loyalty to the enterprise, so they can work wholeheartedly rather than constantly thinking about change, causing the boss worry and effort.
**3. Retain people with compensation.** Using compensation to retain people is the most effective way for distributor enterprises. Many distributors have a "small-minded" trait. In fact, distributors can fully open their minds, just like Niu Gensheng, the former "OEM" distributor, who said, "Small victories rely on wisdom; great victories rely on virtue." Adhering to the employment principle of "wealth gathers people; scattering wealth gathers people," provide employees with challenging compensation and assessment mechanisms. Through high standards and high requirements, abandon the "big pot rice" mentality. Only then can you attract capable talent to join and work with determination.

**-02-**
**Management Puzzle**
**Case:**
Old Zhang, a beer brand distributor, is the largest beer distributor in his locality. He currently has over 20 employees. However, in recent years, as the company has expanded and personnel have increased, he finds management increasingly difficult. Some employees frequently arrive late, some slack off during distribution, and some marketing personnel take price differences during sales. These trivial and annoying matters consume a lot of his energy, making him feel overwhelmed and unsure where to start to improve work efficiency.
**Analysis:**
Many distributors face the phenomenon of difficult management during their growth. In the early entrepreneurial stage, many distributors relied on a few people and a few guns to carve out their own territory. But as the enterprise grows rapidly and personnel increase, the "oral" management based on commands and instructions becomes increasingly ineffective. Since these distributors lacked management awareness from the start and had no mature management methods, when "the forest is big, all kinds of birds are there," management becomes the booster for continued high-speed growth. But how to manage and what to manage remain practical difficulties for distributors.
**Solutions:**
Management issues are bottlenecks that distributors must break through during development. Management is also productivity. In distributor enterprises without management guarantees, it is hard to imagine an orderly and vibrant future. To manage well, distributors should start from the following aspects:
**1. Company-style operation.** Company-style operation, or "simulated" company-style operation, is a beneficial attempt for distributor enterprises to improve their management level. On this basis, distributors can set up their organizational structure according to their development needs, such as finance, sales, marketing, logistics, and customer service departments; clarify the position of each department in the structure, identify responsible persons, formulate reasonable job responsibilities, then place personnel in appropriate positions, clarify work processes, and implement "assembly line" style operation management.
**2. Establish and improve systems.** Chaotic management is the most headache-inducing issue for distributors. Therefore, from this perspective, distributors should establish and improve systems and build a management platform. "A sparrow may be small, but it has all its organs." By establishing a management system, formulating relevant rules and regulations, and strictly implementing them, form a "rule of law" situation where everyone is equal before the "law," creating a good team atmosphere where everyone follows rules and disciplines. Through perfecting systems, build a disciplined and efficient internal team.
**3. Management requires persistence.** Many distributor enterprises do not lack rules and regulations; the key is that during implementation, they become distorted or the management system is not sustained. For example, many employees are relatives, which brings difficulty to management, resulting in the inability to punish when necessary, making the system a mere formality. Secondly, due to high personnel turnover or "one-man rule" management, when the distributor is absent, management is greatly reduced or cannot be sustained long-term, making management ineffective.
**4. Introduce professional managers.** Introducing professional managers to assist in managing the enterprise is also a necessary path for distributors to implement standardized management. By letting professionals do professional tasks, distributors can make up for their management shortcomings, thereby achieving the goal of managing their enterprise through others' strength.

**-03-**
**Capital Puzzle**
**Case:**
Mr. Zhao, an agent for a famous white liquor brand in Zhengzhou, is now a distributor for three white liquor brands and one imported wine brand. As early as three years ago, he had already implemented company-style operation. But as business grew, he felt the capital gap widening. Recently, he wanted to represent a health liquor brand, but the shortage of working capital made it difficult to realize his ambition. The capital bottleneck has become the most prominent issue hindering his development. What should he do?
**Analysis:**
Many distributors have had similar experiences. Especially in recent years, due to increasingly fierce competition, product profits have shrunk repeatedly, making it harder to earn money. In this situation, relying on one's own capital accumulation to achieve significant development is almost impossible. Due to the heavy capital occupation of alcoholic beverage products, as well as the large amount of credit sales to supermarkets, hypermarkets, and restaurants, many distributors are short of funds. To further develop is almost "harder than climbing to the sky." Facing insufficient "hematopoietic" function, and "robbing Peter to pay Paul" being unrealistic, what should distributors do?
**Solutions:**
Insufficient capital is always a common concern for business owners of all types. Distributors are no exception. To better solve this problem during development, the following methods can be referenced:
**1. Utilize enterprise funds.** This method mainly uses one's commercial reputation to obtain the use of funds. For example, many enterprises now evaluate distributors' credit and grant different credit limits based on different levels. By establishing a good commercial reputation, distributors can use the enterprise's "credit funds" for their own use, ensuring sufficient funds for allocation and turnover.
**2. Cleverly use downstream channel funds.** Smart distributors also use downstream channel funds to make money. For example, some distributors seize favorable opportunities at different times of the year by holding ordering meetings, networking events, and new product launches to indirectly absorb customer funds. This not only allows them to use these funds to secure better policies from manufacturers but also strengthens control over channels and effectively squeezes competitors.
**3. Implement strong-strong alliances.** Implementing strong-strong alliances is also an effective way to strengthen one's strength and achieve rapid development. For example, Gree Air Conditioning effectively solved the capital bottleneck by forming sales companies with manufacturers. Some distributors form joint ventures through product complementarity, which also well solves market difficulties such as insufficient funds and difficult channel entry.
**4. Mortgage loans.** This is also a financing method, where distributors mortgage their movable and immovable property, undergo bank evaluation, and then obtain bank loans, thereby using the bank's money to earn their own money.

**-04-**
**Brand Puzzle**
**Case:**
Mr. Kong, head of the wholesale department of a sugar and wine company in Hebei, is a distributor who became wealthy through "reselling" products after the reform and opening up. In recent years, he has continued to operate according to his successful routine, but found that this approach is increasingly ineffective. Since he distributes inferior products, even some "counterfeit" products, although he can earn a little money, the problems are growing. Not only have returns and exchanges increased, making seemingly profitable products actually unprofitable, but his reputation has also been greatly affected. Now everyone advocates building brands. He has been thinking: should he change his development model? How to create a brand?
**Analysis:**
Doing products or building brands has become a puzzle for many distributors. These distributors who became wealthy by doing products still miss and linger over products that, although without brands, are profitable. While building brands can expand their influence and visibility, the thin profits still make many distributors hesitate. After all, the path of solidly building a brand and seeking profits seems too long and anxiety-inducing.
**Solutions:**
The deepening of WTO has rapidly pushed China's economy into the financial stage. The most distinctive feature of this stage is the use of capital, brands, and integration methods. This also applies to distributor development. Therefore, to achieve long-term stability on the development path, distributors must embark on the path of brand development.
**1. Shift from doing products to building brands.** As consumption becomes increasingly rational and brand awareness strengthens, distributors must change their operation mode. They should shift from simply doing products, selling products for the sake of selling, to selling brands for long-term profit. Only branded products are viable. Building brands is the only way for distributors to ensure their business longevity.
**2. Build your own brand.** While operating manufacturers' brands, distributors should also "look far ahead" and implement a dual-brand strategy. The so-called dual-brand strategy means that in addition to operating the manufacturer's brand, they also learn to build their own brand, even owning their own brand. Your own brand is enduring and belongs to you. Through the dual-brand strategy, distributors can achieve the strategic goals of continuous profit and long-term development.

**-05-**
**Channel Puzzle**
**Case:**
Zhang Jian, a beer distributor in Zhengzhou, has become increasingly puzzled about channel operation models in the past two years. As a veteran beer distributor for six years, he simultaneously operates up to six channels: supermarkets, restaurants, convenience stores, food stalls, KTVs, etc. But in recent years, with the increasing segmentation of markets and channels, he feels it is increasingly difficult to operate so many channels. What should he do with these dazzling channels? Should he attack on all fronts, or become a category distributor for certain segmented channels?
**Analysis:**
Channel puzzles are also a practical issue for distributors. Since many distributors came from the era of large circulation, they often roughly operate channels they may not be good at, resulting in doing many channels but not doing any well. These distributors generally have strong possessiveness. After owning a brand, they often do not consider their own capabilities or resource matching, wanting to monopolize control over products and markets, not allowing others to interfere. In fact, distributors who do not know how to give up are also those who will not gain greatly. "Give and take; only by giving can you receive."
**Solutions:**
To better solve distributors' channel puzzles, the following methods can be referenced:
**1. Channel operation segmentation.** Distributors must constantly take stock and examine themselves, understanding which channels can be operated, which cannot, which they are good at, and which they are unfamiliar with. After segmenting the channels they operate, distributors can reasonably choose their operation channels based on their advantages and resource conditions.
**2. Channel operation specialization.** Distributors should strive to become the leading distributor in a specific segmented channel. By focusing resources, they continuously achieve and consolidate advantages in a particular segment, ultimately becoming "both specialized and refined," thereby gaining a leading position in the industry, market, and channel.
**3. Channel operation lean management.** This involves standardizing and refining channel operations, clarifying personnel work processes and operating standards, and solidifying channel operation personnel's work, such as the eight-step visit and the six-fix deep distribution, ultimately achieving a transformation from refinement to leanness. While achieving high market share, they also maximize profits.

Source: Cui Zisan Marketing Vision (ID: gh_8ab2847e7727)
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