Scan the QR code in the image to register If you conduct research in third- and fourth-tier cities, you will find many 'puffy' distributors. Their annual sales are not low: in county-level markets they achieve 20-30 million, and in prefecture-level cities 50-60 million, earning them a 'name and position' locally. But when asked about profits, compared to the tens of millions in sales, profits are pitifully low. After a busy year-end, many have net profits below one million. These distributors share a common characteristic: they lack independent commercial flow capabilities. Such distributors are essentially not in the distribution agency business but in the logistics and delivery business. Frankly, distributors like this are not sustainable in the future. They claim to be in distribution, but in reality, their profits are just the 'manager's salary' paid by the brand owner. They work hard all year coordinating loading, unloading, warehouse rental, and capital advances. At year-end, after a busy year, they receive a bonus. -01- The 'Office + Logistics Distributor' Model Has Completed Its Mission Of course, the emergence of this model is not only the distributors' fault but also the brand owners'. The deep distribution model led by brand owners has inadvertently pushed distributors into the strange circle of 'logistics delivery'. But in recent years, distributors have noticed that more and more brand owners are making efforts to help them transition from logistics warehousing and distribution to commercial flow promotion. From the brand owner's perspective, the past 'office + logistics distributor' model has completed its historical mission, mainly reflected in two aspects: First, the maturity of the entire commercial circulation field has led to the gradual rise of some distributors with commercial flow capabilities. In the past, distributors were non-professional; some had never been in commercial circulation before. To quickly capture the market, the most appropriate way for brand owners was to have distributors provide warehousing and capital, while brand owners used a human-wave tactic and deep distribution strategy to achieve the most efficient market coverage, completing distribution and shelf occupation. Now, after nearly three decades of iteration and elimination in the commercial circulation field, today's distributors are either former sales managers of manufacturers or have years of business experience, learning under the guidance of brand owners. They clearly know how to do distribution and promotion, and their operational awareness and capabilities, as well as quality, have greatly improved compared to the past. Second, the maturity of mobile SFA (Sales Force Automation) systems makes efficient management through tools possible. Besides the past lack of professionalism among distributors, due to the vast and deep Chinese market, to hear frontline market voices in time, the most appropriate way was to set up offices in various places for direct manufacturer operations. Offices were hubs for information exchange between upper and lower levels. Now, with the proliferation of mobile tools, manufacturers can get market information in real time even if they are not on the frontline. Location-based photo taking, AI image recognition, product online, transaction online, data online, and standardized terminal execution actions can all be reflected in mobile apps. By moving sales management online through tools, efficiency has naturally improved significantly. At the same time, it truly enables full online management from distributor management to terminal management to frontline business management. Therefore, the proliferation of mobile tools makes it possible for brand owners to digitize channels, and also, in this round of channel reform, reduce communication costs between layers, lower personnel costs, and improve operational efficiency. Both brand owners and distributors will ultimately reach a win-win situation. Brand owners reduce communication layers and personnel expenses while also gaining real-time insight into frontline market voices. Distributors regain true market distribution rights, not only with improved profits but also with more business opportunities once they have commercial flow capabilities. Therefore, in this round of change, New Distribution suggests that distributors must seize the opportunity to build commercial flow functions with the help of brand power. -02- Challenges and Opportunities: Preserve the Existing, Pursue Growth Of course, opportunities come with challenges. Brand owners will not lower their requirements just because they hand over market operations to distributors. The annual growth targets previously set for offices will be transferred to distributors. At this point, how should distributors respond to preserve last year's existing business while achieving more growth? Based on the above, the existing market corresponds to products and outlets that inherit the past office work content. There is already a set of standard methodologies, and with brand owner support, the difficulty is relatively low. The key here is: testing the distributor's data operation capability and organizational management capability. With the emergence of mobile tools, distributors must quickly learn to use data for operational analysis: where to invest more, where to invest less; where single-store output is highest, where it is lowest. First, basic data must be available, then it must be used, and problems should be adjusted and optimized accordingly. In the past, the core capability of distributors was resource allocation, such as capital use, warehouse allocation between peak and off-peak seasons, and hiring and dispatching drivers and workers. Now, the core capability of distributors is specific to sales management: how to compete for market share and terminals. The pursuit of incremental markets can be said to be the second-stage requirement for distributors. Besides increasing the distribution share of high-priced new products of core brands, distributors often consider adding more product lines for distribution. At this point, the test for distributors rises another level: with multi-brand distribution, how to combine products and allocate resources to maximize operational efficiency. In addition, in terms of outlet growth, behind the increase in outlet numbers is the reorganization of salesperson visits, broadening outlet types, especially increasing special channel outlets, which include not only conventional special channels such as restaurants, gas stations, scenic spots, and hospitals, but also new retail scenarios like Ele.me, Meituan Waimai, and community group buying. Finally, regarding personnel management, frankly, whether it is improving efficiency in the existing market or exploring opportunities in the incremental market, it cannot be separated from the people behind it. For distributors, the quality of product selection determines the profit structure, but the sustainable growth behind profits depends solely and critically on organizational management. The core of good distributor organizational management has only two points: first, partnership thinking; second, immediate feedback. Whether for frontline business or backend warehousing and distribution, designing rewards and assessments around these two points will enable distributors to use, manage, and retain people well.