The discussion on 'how distributors can achieve corporate operation' was triggered by two small incidents: first, a distributor friend from Henan said he was deeply troubled by family-style management and realized that if he didn't achieve corporate operation, he would be eliminated, but corporate operation is not just talk; he didn't know where to start. Second, a county-level distributor asked me to help him find the general agent of Yanghe for distribution, so I conveyed the information to the general agent. Two days later, I asked the general agent how the discussion went. The general agent said it didn't work out because they required the distributor to have not only a network but also at least professional finance, professional delivery vehicles, and professional sales personnel. When they inspected, the distributor said he didn't have any of these conditions. It is evident that from the internal development of distributors to the external requirements of upstream, corporate operation has become an inevitable trend.
Prerequisites for Corporate Operation Many distributors can do well when they are small, but once they scale up, they feel overwhelmed. The root cause is that a company needs four roles: investor, operator, manager, and professional. In the early stages, distributors with a few people can usually take on multiple roles, such as purchasing, warehouse keeping, driving, accounting, and sales. But when the scale grows, if they still position themselves this way, it obviously cannot meet the needs of development. Therefore, to achieve corporate operation, distributors must first reposition themselves.
Positioning should be based on the company's development stage. We believe that if the company is small and in the development stage, the distributor should be positioned as an investor and operator, focusing on operations and profits, including product selection and market operations, rather than being deeply involved in management affairs. A distributor friend from Hubei mentioned a mistake he made: he always thought that if management was done well, business would naturally improve. So he managed almost every detail of his employees, even scolding an employee for being lazy. Later, an incident deeply touched him. On the last day before the Spring Festival holiday, he saw everyone eager to go home and not focused on work. Instead of sitting idle, he organized an activity and had everyone play cards. After a few minutes, a salesperson named Xiao Li ran over and said, 'Boss, I don't know how to play; I'd rather go home than watch.' The distributor thought about it and let Xiao Li leave. Seeing Xiao Li slip away, many people found excuses to ask for leave, and finally, the card game didn't happen. Later, the distributor reflected that he was too focused on detailed management and neglected his key responsibility of increasing company profits. So he changed his approach: when he saw employees being lazy, he called the business supervisor to his office and said, 'Manager Wang, you need to handle employee management.' At year-end activities, he told the office director, 'Director Zhang, organize activities for everyone; make sure everyone can participate, and you decide the details.' He freed up time to visit manufacturers and study channel construction. Management is a bottleneck for distributors, but it doesn't mean management is the core work. Without profits, no amount of management is effective. The prerequisite for achieving corporate operation is to clarify one's positioning, not to do it for the sake of corporate operation.
Another prerequisite for achieving corporate operation is to abandon family-style management. It can be said that a major obstacle for many distributors in achieving corporate operation is family-style management. In the early stages, the involvement of relatives and friends did accelerate the primitive accumulation of distributors because this organizational form is efficient and easy to manage. But in the stage of corporate operation, this model largely has a counterproductive effect. Manager Zhao from Hebei has deep feelings about this. He said that business is harder now than before, mainly because manufacturers operate more standardly. For example, if a manufacturer invests 3 million to operate a market worth 1 million, distributors can make money with their eyes closed, mainly by earning manufacturer fees. Now the situation is different; manufacturers have standardized, giving support based on proportions, and distributors are now operating with thin margins. This is normal because no one throws money away carelessly. Manager Zhao's company had many relatives and friends, and they made money when there was profit. But as manufacturers standardized and money became harder to earn, Manager Zhao gradually let relatives and friends leave the company because without this change, the company would eventually die. In recent years, Manager Zhao has seen many peers die, including some large ones, all defeated by management, defeating themselves. Manager Zhao believes that the hardest to manage are not relatives but friends, because with relatives, you can speak up, but with friends, it's hard to say due to face. Manager Zhao hopes his friends can make money and develop, but that's not the case. He allocated some markets to friends, but they pocketed the money instead of investing in the market. This made Manager Zhao realize that to ensure the company operates well, he must remove these people. So he established a performance appraisal system, dismissing anyone who didn't meet requirements, and then introduced professional managers to handle company affairs. After this personnel adjustment, Manager Zhao's company gradually moved onto the track of corporate development.
Guarantees for Corporate Operation The above are the transformations distributors themselves must undergo to achieve corporate operation: repositioning and clearing obstacles. After these two prerequisites are met, there must also be personnel and organizational guarantees.
In fact, dissecting a distributor company, it's simple: there are goods, a house (office, warehouse), and personnel. Goods and houses can't move, so how does the company operate? In essence, it's about getting a group of people to help you sell wine. Therefore, the core of company operation is personnel operation, and the guarantee of company operation is personnel guarantee. Specifically, a reasonable personnel combination for a distributor company includes the following (see table below). With these personnel in place and responsibilities assigned by position, the distributor company can maintain normal operation, and then distributors will have time to consider how to make the company run faster.
Now some distributor companies have established departmental organizations based on channels. How to coordinate these departments is key to company operation. On this issue, a distributor in Chengdu has a practice worth learning: the company does both agency and specialty stores, but it is well-organized. Manager Hu of the company believes that only with overall coordination and cooperation can the team achieve maximum efficiency in specialty store operations. His team organization consists of planning department, marketing department, manager's office, HR department, logistics department, finance department, etc. They usually perform their own duties, but for company actions, they cooperate. For example, when opening a specialty store, the location selection, surrounding market environment, customer flow, initial sales forecast, store size, purchasing power, etc., need to be comprehensively evaluated by the planning and finance departments before investment, and then all departments conduct a comprehensive analysis of the preliminary plan. If the comprehensive evaluation passes and everyone agrees the plan is feasible, the marketing department executes it, and the logistics department assists in unified resource allocation, thus making rational use of the company's effective resources.
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