In today's market where channels and terminals are paramount, distributors are strategic partners for manufacturers, and high-quality distributors are a scarce resource. Developing or replacing a distributor incurs extremely high costs. No legitimate manufacturer doesn't want to create a win-win with distributors, and none would casually revoke a distributor's agency. It's just that business is like a battlefield—there are no permanent friends, only permanent interests.

Recently, reporter Zhang Zhang called me: a distributor in Zhejiang was frustrated because, without any notice, the manufacturer transferred his agency to a new distributor after he had been representing the brand for just over half a year. Not only did he lose his investment, but retailers also treated him as a fraud without agency rights.

Then reporter Zhang Zhang recounted what the distributor Mr. Wang (pseudonym) said to the reporter: Recently, when his salespeople visited stores, they found that retailers didn't believe he had the agency rights, and they were told that another distributor was already operating the brand.

As the company grows, it needs stronger distributors, and through a series of measures to update its blood, survival of the fittest, Mr. Wang understands that. But what angered him was that when he called the company's head to inquire, the answer was denial. A few days later, the new distributor in the region told him to stop operating the brand. When he called the company again, he found that the company was playing "Tai Chi," shifting responsibility, which made him suspect the company's motives.

"The company kept calling, demanding payment, and if we didn't pay, they would transfer the agency. The intention to raise money was obvious," Mr. Wang said. Now the agency situation in Zhejiang, Jiangsu, and other places is very chaotic. In Zhejiang alone, there are five or six provincial and city distributors, covering Jinhua, Yiwu, Wenzhou, Taizhou, and Hangzhou, with overlapping regional markets.

Mr. Wang said that as early as March, when BXT held a recruitment meeting, they had already "operated under the table" and signed a batch of new distributors. For old distributors, the agency policy was very harsh: the original region had to be handed over to the new distributor, and they could only operate a few areas in their city, with a monthly payment of 100,000 yuan. The new distributor also had a monthly payment of 100,000 yuan for the larger region.

With his reputation damaged and his initial investment of tens of thousands of yuan lost, Mr. Wang planned to stop representing the brand. But another problem arose: he still had tens of thousands of yuan worth of goods, and the company actually asked him to digest them himself. "This isn't food that I can eat every day; I can't apply a bottle every day." With such after-sales service, Mr. Wang was disheartened. Even one of his employees said, "With a brand like this, I have no confidence in selling it."

Miss Zhang Zhang raised a question to me: Why do manufacturers cut off distributors? Generally, what are the situations?

Based on my years of experience as a manufacturer's sales manager, I have summarized that distributors being replaced or major distributors being reduced generally falls into six types.

1. Manufacturers draw a pie and brainwash to raise money; distributors are greedy and gullible, losing money!

I believe readers can get some insight from the above case. To borrow Miss Zhang Zhang's words: I hope distributors and agents are cautious and rational when choosing companies and brands, and avoid falling into the "money trap" designed by companies.

Such manufacturers' sales managers think: "Whoever pays is the mother. I get commission only when there is payment. Whoever gives me payment can be the distributor. Once the goods reach the distributor, I don't care how they sell to consumers. Anyway, the company's idea is to raise money once and then change the brand, redesign a recruitment policy to raise money again, and not care about the market's survival."

2. Distributors have limited strength and slow progress; manufacturers are keeping options open, looking for a bigger partner.

This is a common practice of manufacturers that lack integrity and long-term planning. Many manufacturers, when their products are first launched, lack brand awareness and find it hard to attract ideal strong customers. To quickly achieve channel layout or complete payment tasks, they accept any distributor as long as they have money, which leaves hidden dangers for future cooperation. When the manufacturer gradually grows and the distributor can no longer meet the manufacturer's needs for local market development, and the manufacturer has the conditions to attract high-quality distributors, many dishonest companies do not support or help the outdated distributor but instead "go out of the wall" (i.e., seek other partners).

Such manufacturers' sales managers think: "Modern society advocates freedom of marriage. Following you has no future, so I have to pursue my own happiness, even if it means being Pan Jinlian (a notorious adulteress in Chinese literature)."

3. Channel optimization and integration: cutting off distributors' weak channels.

Mr. Wei is the general agent for G brand in Q region and has a good relationship with the factory's top management. Mr. Wei is optimistic about G brand and wants to make it the number one local brand, and also use G brand to develop his own distribution channels.

Mr. Wei's main advantage is the supermarket channel. G brand is a mass-market FMCG product, and wholesale distribution is its main channel. Since Mr. Wei took over G brand, all local supermarkets have been entered, but the distribution rate in the wholesale channel is less than 10%. The high costs of supermarkets have become unbearable for G brand.

To fully occupy the Q market, achieve deep distribution, and lower market costs, the G brand regional manager had no choice but to find another strong wholesale distribution channel agent, Mr. Li, and authorized Mr. Li to have the distribution rights for the Q market's wholesale channel. When Mr. Wei learned that his distribution rights for the wholesale channel had been cut off, he felt deceived about his feelings for G brand and flew into a rage. To appease Mr. Wei, the factory transferred the regional manager (who had achieved rapid improvement after the channel split) and issued a public criticism.

The regional manager said: "If I let the client continue in distribution, I'm waiting to die; cutting off the client's weak channel is my chance to survive."

4. Pursuing channel flattening or deep distribution: manufacturers implement "cutting off vassals"

In X Company's Jiujiang market, the total distributor's monthly sales were only about 50,000 yuan, while in Pengze County, a small county under Jiujiang with a population of nearly 300,000 (this distributor started early and cooperated directly with the factory), monthly sales reached over 300,000 yuan. In Huangmei County, Hubei, across the river from Jiujiang, monthly sales were over 700,000 yuan. This shows that although the Jiujiang region had been operating for two years, it was no different from a blank market. The Jiujiang general distributor was a relatively strong local distributor with annual shipments of tens of millions. Initially, they were optimistic about X brand, but due to some legacy issues from early cooperation, the client refused to invest and build distribution channels. Even when the regional manager developed some sub-distributors, the general distributor's markup was high, and policies were not passed down, so sub-distributors had no room to operate and didn't put effort into the market.

After multiple failed communications, the regional manager got angry! "If you don't do deep distribution, then I'll do channel flattening!" Behind the general distributor's back, he opened county-level distributors one by one in the counties under Jiujiang, and the Jiujiang market's sales multiplied several times in the short term.

The regional manager said: "The manufacturer cannot give up the whole forest for one tree."

5. The pitiful must have something hateful: false reporting of expenses and disrupting the market—'cutting you without discussion'

QZ Trading is a relatively strong company locally, representing strong brands like Johnson & Johnson and Shanghai Jahwa in daily chemicals, and is also the terminal channel agent for BW Company. However, after the new BW regional manager inspected the market, he revoked QZ's agency.

After visiting the terminals, the regional manager found that QZ Trading reported 17 salespeople to the company, but actually only had 10. Among these 10 promoters, 7 were also working part-time for other brands. Moreover, the monthly reported salary for promoters was an average of over 1,000 yuan per person, but the promoters actually received only about 600 yuan. Many stores applied for N-shelf and TG display fees, but the regional manager only found one store with a TG display, and according to the promoter, it had just been set up.

The regional manager also checked sales data at some stores and found that actual sales were only one-third of what the distributor reported, and actual market sales were declining sharply. The regional manager wondered: where did the goods the distributor bought each month go? He called the inspection department and learned that the distributor had been frequently complained about for dumping goods outside the region and had been punished multiple times by the company.

The regional manager said: "Smart distributors know how to better fight for manufacturer resources to do the market, but those who ignore the manufacturer's interests and sustainable market development, killing the goose that lays the golden eggs to earn fees, can only be 'smart for a while'."

6. Arrogant, not treating the manufacturer's manager as a 'big shot', forcing the manufacturer to 'cut Ma Su with tears'

Many experienced and strong distributors do not put the manufacturer's "spokesperson"—the regional manager—on an equal footing with themselves. They think the regional manager is just a hired hand, a young lad, or a woman with long hair and short insight. For the regional manager, the manufacturer's policies are not implemented, they don't get respect, and distributors always use payment as leverage to demand policies, threatening not to pay if they don't get special support. If the distributor doesn't cooperate, the regional manager's work cannot proceed. When the work becomes unsustainable, the regional manager will look for backup distributors, collect evidence of the existing distributor's violations and non-cooperation, and apply to the company to change the distributor.

To borrow the words of some regional managers: "Don't treat the village head as not a cadre!"

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