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Distributors may want to transform themselves during market changes, but is the distributor issue the manufacturer's biggest concern? No, manufacturers ultimately care about whether their products can be sold continuously and payments collected promptly. Therefore, as downstream entities in the product sales chain, distributors must recognize and solve problems that arise from mismatches with manufacturers and the market. The current business environment has changed significantly, and it is necessary for distributors to identify their own inconsistencies and transform. Below are several transformation directions for distributors, hoping to provide reference:
- From "Elephant" to "Ant" Type Many large distributors habitually position themselves as the "elephant" among the manufacturer's distributor groups, because this allows them to be closer to the manufacturer's leadership, obtain more manufacturer investment, capture larger regions, make other distributors fear them, and make sub-distributors submit...
But for the manufacturer, there is no need for an "elephant"! Because if the manufacturer is not strong, it may ultimately be threatened by the elephant (thus greatly affecting the enterprise's survival, development, and strategy), must invest varying levels of resources (leading to market chaos with cross-regional selling and price cuts), may face serious payment arrears, and may have market planning and adjustments blocked... In other words, the "elephant" type distributor, who is intimidating without roaring, is not what manufacturers need in the product distribution process!
The "ant" type distributor is the manufacturer's favorite: they eat little but are highly effective, treating product delivery as the top priority; they are diligent, do not ask for much, and are easily satisfied; they are everywhere, ensuring timely product delivery; they are obedient and focus on hard work; they are easy to manage, and there is no worry they will bully the manufacturer...
At the same time, if the manufacturer does not feed and care for the elephant, it may starve; while ants can always find food and easily seek returns from the market. If a manufacturer loses an "elephant," the loss is huge; but these dense "ant" competitors are hard to win over or "recruit."
Facts also prove that both manufacturers and the market hope for more "ant" type distributors, as they can serve the market and consumers more effectively, achieving longer-term and more effective marketing.
Here, the point is that distributors need to have ant-like operational skills. Therefore, it is best for distributors to hire more frontline staff and refine their operations.
- From "Meritorious Minister" to "Small Soldier" Type Many distributors are arrogant about their achievements, thinking, "I may not have merit, but I have toiled; the manufacturer won't do anything to me." Yes, switching distributors costs manufacturers a lot, but the manufacturer-distributor relationship will definitely change with market development. Channels have never been static; manufacturers generally reform or adjust at least every three to four years based on market changes. So, distributors should not accidentally run into the line of fire!
"Attitude determines everything"—this means distributors should not bring hidden knives when communicating with manufacturers, making cooperation more pleasant; at the same time, distributors are indeed one of the slowest-progressing groups in reality, and as society has not given them much special care, they have less and less room for arrogance.
Changing from "meritorious minister" to "small soldier" is easier said than done, but only then can one "return from slave to general" and ultimately gain long-term market operation rights. With this attitude, it is also a major shift from selling goods with a sense of rarity to providing meticulous service, which is the essence of future marketing—serving customers and consumers!
Here, the point is that distributors should position themselves well in the entire channel operation chain, adjust their positions timely, and collaborate to successfully operate the manufacturer's products in the market.
- From "Front-Wheel Drive" to "Rear-Wheel Drive" Type We might call this "market-driven" rather than "profit-driven." The "rear wheel" is the market, and the "front wheel" is profit. You must have the market first, then profit. Many distributors, when handling a manufacturer's products, first and always think about "cash income," with short-sightedness. They do not realize that only by having the market first can there be profit later. So, doing the market first, then asking for conditions, then obtaining benefits—these are the foundations for distributors to establish themselves.
Now there are more and more "rear-wheel drive" distributors. They know that for long-term development, they must find a balance between survival and growth. If they only focus on the "front wheel" rushing forward, without the support, strength, and deep roots of the "rear wheel," they cannot possibly overcome the market traps!
Here, the point is the profit model of distributors. The era of huge profits is over; in the era of thin profits or even "no profit," how to achieve long-term success is a question every distributor should consider.
- From "Comb" to "Rake" Type Change from only skimming or intercepting from the manufacturer's investment, only "combing" a little benefit from the manufacturer's head, to becoming a "ground rake," adding value to products through your own services in the market, thereby obtaining considerable income.
Here, the point is that distributors should pay attention to the details of their operations. Whether it is market orientation or jointly responding to consumers, distributors should always be partners with the manufacturer, jointly "raking money" from the market!
- From "Regional Warlord" to "Grassroots Cadre" Type Although a regional warlord dominates a territory, if they do not understand the grassroots, do not empathize with the people, and do not care about their welfare, they will eventually be impeached or overthrown by the people. But if a regional warlord has a deep grassroots foundation and integrates with the people, they can achieve lasting success.
Distributors are only an intermediate level in the product distribution process. Compared to upstream manufacturers and downstream terminals, their foundation is actually more unstable. To achieve long-term development, they must adjust their positioning and operations.
Doing terminal work is like "temporary grassroots training"; in fact, the position remains, and it can improve their competitiveness and grasp their true core advantage—the network. If distributors want to transform, why not make efforts in this regard?
At the same time, in China, the development of traditional wholesale has been strongly impacted by the market economy and will definitely be severely affected by modern channels. After being squeezed and facing serious threats to survival, there is basically only one way—doing terminal work to consolidate their channel resources!
"The terminal is the market, and consumers are God." Here, the point is the basis of transformation. Distributors have been doing or hope to continue doing "bulk pricing, large circulation, large wholesale, large occupation," but all of this must be based on the terminal (because this also requires your downstream customers to be able to do terminal work and serve the terminal very closely).
- From "Sunflower" to "Pine" Type Rather than admiring enterprises, it is better to establish your own foundation, accumulate strength, and go your own way to become a very strong commercial enterprise. For example, establish a specialized trading company, set up your own independent distribution company, or form a diversified group company to achieve your own enterprise. This should be based on corporatization and standardization as much as possible.
From "sunflower" to "pine" requires a significant change. Many distributors are attempting this, but few truly succeed. This is because this transformation is a thorough change, a sublimation of business, and a breakthrough in company operation models. It may require more standardized operations and management, team operation, good business concepts, deep market understanding, and a professional marketing and management team... In short, it is no longer just about rapid product distribution capability, but entirely about management and operation capability!
Although distributors may face obstacles to survival and development during the period of drastic channel changes, their core advantages still exist. However, the core capability is no longer the distribution assets that are always talked about but actually intangible ("How many distributors do I have, how many vehicles, how much capital," etc.). The core capability of distributors should be their ability to learn and transform faster and faster as society moves faster.
Enterprises and markets are growing rapidly. Distributor friends, do you want to grow, but are you ready?
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