---
title: "Distributors' Self-Transformation: No Longer Just 'Porters' for Brands"
description: "Distributors who turn crises into opportunities often win through systematic thinking and holistic innovation. In 2022, a year of market volatility and pandemic-driven changes, distributors faced numerous transformation challenges, with many feeling like mere 'porters' for brands, burdened by high costs, low profits, and risks. To thrive, they must upgrade their management systems in eight key areas."
author: "程英奇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-11-25"
language: "en"
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# Distributors' Self-Transformation: No Longer Just 'Porters' for Brands

> Distributors who turn crises into opportunities often win through systematic thinking and holistic innovation. In 2022, a year of market volatility and pandemic-driven changes, distributors faced numerous transformation challenges, with many feeling like mere 'porters' for brands, burdened by high costs, low profits, and risks. To thrive, they must upgrade their management systems in eight key areas.

**Introduction: Distributors who turn crises into opportunities often win through systematic thinking and holistic innovation.**
2022 was a year of market volatility and, under the pandemic, a year of continuous marketing transformations. For distributors, it was also a year full of transformation challenges. Some distributor friends told me they had become 'porters' for brands, facing three mountains: high costs, low profits, and high risks. Brands demanded continuous growth, channel partners kept raising profit and cost requirements, and their own operational labor and expenses were rising. Business was difficult, and operations were full of uncertainties. Although they tried new things, results were minimal. In such an environment, distributors' ability to respond and innovate is tested more than ever. Those who turn crises into opportunities often win through systematic thinking and holistic innovation.

What does 'comprehensive and systematic' mean? Based on my personal analysis and observation, daily chemical distributors should achieve eight major management upgrades.

**Change with the times, survive by adapting**
Although this is a cliché, in a volatile environment, the more you understand the market and see trends, the more you can stay one or even several steps ahead. Whether consumption is upgrading or downgrading, consumer behavior drives changes in traffic structure, which often gives rise to new channels, brands, and product ecosystems. Therefore, better understanding and analyzing the market, and truly finding a future that keeps pace with the times, is the starting point for a distributor's strategic transformation. For example, under the pandemic, offline and online consumption and sales models have changed. As nearby and convenient shopping become habits, corresponding sales demands and venues change accordingly. The future of offline is precision, proximity, and trendiness. Boutique shopping malls, nearby communities, townships, and trendy color stores become the new mainstream. Distributors need to know which boutique supermarket channels and single-store channels exist in shopping malls, which major supermarkets and stores are in communities and townships, and how to deploy and develop in trendy stores. Only by knowing and entering these channels can they follow and grasp future business. The future of online is search e-commerce, emerging e-commerce, and community groups. Search e-commerce, with Tmall, JD.com, Vipshop, and Pinduoduo as the core, remains the main battlefield for stable sales. Emerging e-commerce, with Douyin and Kuaishou as the core, continues to grow rapidly through interest, relationships, and influencers. Niche markets such as community group buying and community e-commerce are also further penetrating and developing. Building diverse online e-commerce capabilities will be the new trend for online distributors.

**Know yourself and your enemy, find your positioning**
Through your own SWOT analysis, know your position in a certain city or channel, and thus find your future direction. Use what you have to get what you want. When distributors can align their situation with trends and use their strengths to build on their advantages, transformation and change will be twice as effective with half the effort. Knowing yourself, knowing your competitors, and knowing your positioning tells you where to go, how to get there, and with whom, making strategic actions precise, avoiding detours, and preventing stagnation on old paths.

**Adjust inventory, improve sell-through ratio**
Optimizing inventory and turning goods into cash is a simple business principle. The more intense the competition, the more inventory turnover efficiency is linked to the survival of the enterprise. Distributors should be adept at discovering and applying advanced systems and management to make inventory structure more reasonable, and adopt a 'small meals, frequent eating' approach in purchasing to improve sell-through ratio and liquidity. For example, our distributors in Henan, for products with long shelf life or large quantities in their warehouses, lowered expectations and ran ultra-low-price promotions and exchanges at key stores with almost zero profit, or found local large enterprises for special-price welfare internal purchases, revitalizing inventory and reducing risk. Our distributors in Jiangsu order down to the single SKU, confirming order quantities based on each SKU's sales status. At the same time, they control order rhythm based on the layout advantages of our East China warehouse, adjusting order frequency from once a month to twice a month, making order management more precise and product flow more efficient.

**Strengthen accounts receivable management**
**Clear cost management**
Solid basic skills and ample cash flow give distributors more confidence in innovation and transformation. By strengthening channel payment collection, capital risk management, and upstream and downstream cost reconciliation, distributors can make their operations healthier and cooperation more effective and reliable. This reflects the distributor's financial management capability and the art of integrating finance and business. Spend wisely when needed, save wisely when appropriate; do business but avoid ineffective business; invest when necessary but avoid high-risk investments. Do the work, keep accounts clear, and make costs transparent, forming a healthier business management system that integrates business and finance.

**Three elements of structural development capability:**
**Have it all: maintain, develop, and explore**
The so-called structure is 'eating what's in the bowl, watching what's in the pot, and thinking about what's in the field.' Knowing which existing business structures to maintain, develop, optimize, or discard is 'eating what's in the bowl.' Which emerging businesses to develop and expand into new partnerships is 'watching what's in the pot.' For trend businesses, knowing which to understand, research, and prepare for is 'thinking about what's in the field.' For example, Anhui Meilin Beauty, over the past three years, restructured its business portfolio. On the basis of its original cosmetics chain stores, it added two new businesses: one was the technical upgrade of its own brand, establishing a technical evaluation and efficacy laboratory, and building a supply chain platform for its daily chemical supermarket stores, providing a full set of store management and product service management support for small and medium-sized daily chemical supermarkets across the country, thereby strengthening the enterprise and making itself better. **Business structure needs to be tailored to each region and each customer. Different regions and different customers form different business structures.** Rebuilding the business structure to build the engine of innovation and transformation is also a key choice for distributors.

**Establish a distributor brand supporting system:**
**Place, product, people, promotion**
If channels are the battlefield, then brands are the weapons. Advanced weapons win wars. Therefore, **the rebuilding of the business structure must be accompanied by corresponding brand support, with proper place, product, people, and promotion.** Place is the store and platform; product is the brand and product suitable for those stores; people are the mainstream consumers in those stores; promotion is the promotional method suitable for the store, product, and people. Place, product, people, and promotion must match positively and adapt inversely, requiring extremely precise alignment. The role of traditional brands, the value of emerging brands, how to maintain mass brands, how to enter mid-to-high price brands, which brands drive volume, which brands generate profit, which old brands to optimize, and which new brands to introduce—all these require confidence and determination from distributors. For example, Mr. Weng of Xiamen Shengshi Mingdu, in his cooperation with Yonghui Superstores nationwide, built a new brand structure including mass skincare, high-end hair care, emerging oral care, and home cleaning, forming a diversified competitive advantage across high, mid, and low price points. Choice is more important than effort; the new matrix choice between channels and brands is the core of whether a distributor's innovation and transformation can land and succeed.

**Abandon traditional thinking**
**Build a combat-ready team**
After distributors have new business structures, channel combinations, and brand matrices, they need to form corresponding new organizational structures, team management systems, and even performance management and compensation incentive plans. A good business model requires a corresponding team to support it. Therefore, how to use old employees well, recruit new employees, and achieve new team combat effectiveness are issues distributors must face. Of course, this requires distributors to change traditional team management thinking. **Only with a team management cognition and practice that combines 'old bottle, old wine' and 'new bottle, new wine' can there be true innovation and transformation momentum, and can you sail smoothly with high sails.** For example, Yunnan Jixinlong and Pinfang Company, and Anhui Hefei Bangwei, were all large supermarket distributors in China in the early days. As the market changed, they built comprehensive CS channels, e-commerce, and even live streaming businesses on the basis of their supermarket and package business, with corresponding organizational structures and staffing, quickly achieving the landing and success of new businesses.

**Adapt to changes, win in the new era**
Distributors' innovation and transformation never follow a predetermined formation or plan; they move while doing, adjust while moving, and continuously adapt and change. Distributors may not be able to foresee, but they can learn after the fact, and they must never be unaware. Stay close to the market, be the duck that knows the river's warmth first, and with sensitivity and adaptability, **adapt to new changes, innovate new models, seize new opportunities, and as you move forward, the flowers will bloom.** The eight major system management upgrades are my humble views from multi-dimensional observation and also our touchstone for selecting cooperative distributors. I always believe that only by being with distributors who have foresight and the ability to control the future market can we win the transformation victory in the new era. An excellent daily chemical distributor needs these eight upgraded holistic thinking management capabilities.

In 2022, pressure is high, but it is also an opportunity for self-transcendence and overtaking on the curve. Only by thinking strategically, assessing the situation, strengthening confidence, and moving forward courageously can we smile in 2023 and succeed in many more years to come.

Director of the China Oral Cleaning and Care Products Industry Association, Deputy to the 17th People's Congress of Liwan District, Guangzhou; formerly Marketing Director of Blue Moon Group, Marketing General Manager of Sotf Group, Marketing General Manager of Lafang Group, and Vice President of Uniasia Group. Founded Bingquan in 2019, creating a delicate oral care brand loved by young people, successfully making Bingquan a standout among new consumer brands.


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