---
title: "Five \"Military Rules\" That Distributors Must Follow When Organizing Their Own Promotions!"
description: "In high-margin industries such as automobiles, real estate, and electronics, both distributors and manufacturers have significant profit margins, so either party may unilaterally cut prices or launch promotions without the other's knowledge or consent. For example, Fuji announced a price cut for one of its digital cameras online first, then calculated distributors' inventory and compensated them for the difference. In the food industry, where margins are thinner, distributors organizing their own promotions without manufacturer support must adhere to the following five \"military rules.\" First, proactively report the promotion process and results to the manufacturer..."
author: "陈小龙"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-02"
language: "en"
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# Five "Military Rules" That Distributors Must Follow When Organizing Their Own Promotions!

> In high-margin industries such as automobiles, real estate, and electronics, both distributors and manufacturers have significant profit margins, so either party may unilaterally cut prices or launch promotions without the other's knowledge or consent. For example, Fuji announced a price cut for one of its digital cameras online first, then calculated distributors' inventory and compensated them for the difference. In the food industry, where margins are thinner, distributors organizing their own promotions without manufacturer support must adhere to the following five "military rules." First, proactively report the promotion process and results to the manufacturer...

In high-margin industries such as automobiles, real estate, and electronics, both distributors and manufacturers have significant profit margins, so either party may unilaterally cut prices or launch promotions without the other's knowledge or consent. For example, Fuji announced a price cut for one of its digital cameras online first, then calculated distributors' inventory and compensated them for the difference.
In the food industry, where margins are thinner, distributors organizing their own promotions without manufacturer support must adhere to the following five "military rules."
**1. Proactively report the promotion process and results to the manufacturer**
When distributors request promotional activities from manufacturers, it can be a heavy burden for manufacturers with low gross margins and thin profits. Therefore, most promotions that distributors secure are beyond the manufacturer's budget, and manufacturers may feel some reluctance. In such cases, distributors should proactively report the market results after the promotion to secure support for the next one.
A food distributor I know well, under pressure from supermarket channels, made many promotional demands to the manufacturer but never proactively reported the results afterward. As a result, the manufacturer became very displeased and gradually stopped supporting him.
**2. Promotions should not hurt the manufacturer's feelings**
When a distributor independently runs a promotion in a regional market involving the manufacturer's products, it is essential to communicate fully with the manufacturer's representative to avoid mutual displeasure. This is especially important for price promotions.
For example, in a special offer, Brand A had a dispute with a department store in Harbin. The store lowered prices for promotion, and the manufacturer believed the store violated their price agreement, eventually taking the matter to court.
Another case: Brand B had a conflict with a chain store. The store launched a promotion for a competing brand, and the free gift was a product from Brand B. Brand B felt this damaged its corporate image, leading to a clash.
In the food industry, profit margins are generally low, especially for well-known brands. Some distributors think they can't earn much anyway, so they lower prices on famous brands to create an image of low prices, attract downstream customers, and use these brands as loss leaders. This often gives manufacturers a handle to stop supply, impose fines, or even revoke distribution rights.
These cases show that distributors and manufacturers are actually one entity; market actions taken after full communication give both sides confidence.
**3. Avoid causing displeasure in surrounding markets**
Distributors rarely use their own resources for promotions; most are organized by manufacturers. However, some distributors do run local promotions, usually regional general distributors with some profit margin, or manufacturers fund the promotion and distributors organize it.
A common problem with regional promotions is cross-regional dumping from new markets to old ones. Since one region has a promotion and others don't, that region gains an advantage and may easily dump goods into other markets, causing price chaos in surrounding areas.
For example, in one regional market, because the promotion intensity in a nearby big city was greater than in the local area, customers went to the big city to buy goods, and the local goods didn't sell at all. This is a channel problem caused by promotions.
Therefore, if the manufacturer only runs a promotion in your region, the distributor should, on one hand, make good plans and preparations, and on the other hand, strengthen market supervision. The most important point is that goods from your own region must never flow to other markets.
**4. Require the manufacturer to provide certain guarantees**
After a promotion ends, there are follow-up tasks, such as redeeming prizes. If the manufacturer can't continue in one place, they can move elsewhere, but the distributor relies on the local market and must be responsible for it; otherwise, a damaged reputation will make it hard to stay. Therefore, when doing such activities, it is essential to request part of the goods or funds from the manufacturer beforehand to handle follow-up work, rather than advancing funds yourself. This is especially true for products that don't sell well locally.
A distributor in Yangshan, Guangdong, suffered a big loss because he didn't consider this. He was the agent for a chocolate brand whose manufacturer organized a long-term promotion in the area: recycling each single-chocolate packaging box for 0.5 yuan. Later, a sharp conflict arose between the distributor and the manufacturer. The distributor withheld part of the payment, and the manufacturer withdrew from the market, leaving the distributor with thousands of product packages to recycle.
Since the relationship with the manufacturer was severed and he had withheld payment, the distributor felt guilty and didn't want to spend money to recycle the packages. As a result, the regional market was full of complaints. Although the distributor tried to shift blame to the manufacturer, his customers gradually left him in resentment.
**5. When doing your own promotion, focus on channel priorities**
For regional promotions, whether supported by the manufacturer or paid for by the distributor, the resources available are limited. To achieve maximum market performance with limited resources, it is essential to focus on key points and adopt strategies.
Another example: A manufacturer competed with a major brand in a county-level market in northern Guangdong. The distributor organized a promotion, and the manufacturer provided some gift-pack products for the regional general distributor to use for building relationships with restaurants or key figures.
Later, the distributor calculated the costs, converted the products into cash value, and devised a super plan: For newlyweds, presenting their marriage certificate and proof from the restaurant hosting the wedding banquet would entitle them to a free wedding photo set, free wedding dress rental on the wedding day, and a full video recording as a gift. The only cost was using their candy and cake products at the banquet, with no minimum purchase requirement.
This move suddenly tore a big hole in the strong brand's barrier in the region, and the wedding banquet market tilted overwhelmingly in their favor. Later, not only wedding banquets but also other celebratory feasts used their products, and the candy brand became famous in the region overnight. The distributor grew from a small shop owner to a prominent new tycoon.
The distributor's success lay in fully utilizing the manufacturer's resources and targeting specific channels for promotion rather than spreading efforts evenly.
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