---
title: "How Distributors Can Build a Performance Growth System in the New Era (Part 1)"
description: "This article explores why distributors struggle to grow sales beyond certain thresholds, such as 10 million or 100 million yuan, and identifies four key factors: the boss, the executive team, products, and market conditions. It emphasizes the importance of mechanisms and business model innovation, illustrated with examples like the Los Angeles Olympics."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-07-21"
language: "en"
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# How Distributors Can Build a Performance Growth System in the New Era (Part 1)

> This article explores why distributors struggle to grow sales beyond certain thresholds, such as 10 million or 100 million yuan, and identifies four key factors: the boss, the executive team, products, and market conditions. It emphasizes the importance of mechanisms and business model innovation, illustrated with examples like the Los Angeles Olympics.

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**Finding the Reasons Why Sales Cannot Exceed 100 Million**

Our topic today is how distributors can build a performance growth system. Every distributor wants their business to grow, expand, and be profitable, but reality is harsh. Distributors face several thresholds: the first is 10 million yuan. Some people work hard for many years but never break through 10 million; the second is 30 million; the third is 50 million; the fourth is 100 million. Some distributors never reach 100 million in their lifetime. Are there any distributors here who have exceeded 100 million?

We have personally guided six distributors, all of whom have now exceeded 100 million. The worst performer originally had 30 million in sales, and last year reached 126 million. Do you want that? Everyone does! You want to become a distributor with over 100 million in sales, but why doesn't your performance grow in the long term? Or why does your performance grow so slowly? Have you thought about this? (A distributor says: "Management has loopholes.") Management issues, and what else? (Another distributor responds: "Execution is not strong.") Execution! Anything else? No good brands! Any other answers? (Sales model) Yes, sales model issues! Others? (Insufficient store coverage) The number of outlets determines product sales, right? Any other reasons? Market development, unstable price system! Have you noticed that almost everyone has a different answer? Many times, when we don't do well, we must reflect: why am I not doing well? What factors are affecting my performance? Solve them one by one, and it's possible to solve the problem.

Last year, we did a pilot in a county in the southernmost part of Anhui. The distributor there had just transitioned from being a supermarket purchasing manager to a distributor. He had been doing it for three years, struggling, and was about to give up. Coincidentally, when we were doing training for a company, he attended. He was a distributor for one of our client companies. During my lecture, he said, "Teacher Wang, I can use all your methods, but I'm confused. I've worked hard for three years, tried every trick, arrived earliest, left latest, acted as driver, director, salesperson, and accountant. I've worked really hard, but I'm not making money. After three years, I haven't earned a cent, and I'm about to give up." I asked him, "Have you thought about why you haven't done well?" He said, "I can't figure it out." I said, "List the problems. What do you need to do well?" On the first day, he listed five reasons; the next day, another five. The list grew longer and longer. I said, "Now reduce it. Keep only the most essential reasons, and we'll solve them one by one." Last year, this distributor achieved over 30 million in sales for a single product, completely changing his fate. There are always methods, but we must find out "why we can't exceed 100 million, why our performance isn't growing."

**Four Major Factors Affecting Sales Exceeding 100 Million**

Today, many bosses mention management issues, market expansion issues, store coverage issues—store coverage and market expansion can be categorized under market issues. Some say they lack brands, which is a product issue. But there's one issue none of you mentioned. If this issue isn't solved, even if I give you a good product and your market expansion keeps up, you still won't exceed 100 million. The fundamental reason affecting sales exceeding 100 million is **the boss factor**. What kind of boss makes what kind of enterprise; how high the ability is determines how big the business is. The speed of the boss's change, learning, and ability improvement determines the speed and scale of your business development.

Next is **the ceiling of the executive team**. In China, distributors often have two phenomena: first, "family soldiers"—using relatives and friends, which is reassuring, self-serving, and low-cost. Second, "old faces"—if your business doesn't grow for a long time, there must be a phenomenon: your core management team hasn't had a new person in 3-5 years, and it's been the same few people for years. But you'll also notice that distributors who grow fast, do big, and exceed 100 million constantly have new people joining the team. If it's always old faces, there are no new ideas or methods. If you want to develop, you need new people with new ideas. Have you noticed an interesting phenomenon? Old people often see problems, while new people see growth opportunities. Old people transmit all negative things; new people are different. To prove themselves, they always think about breakthroughs and methods. New people keep coming in, using new people to drive performance and push old people. This is a must. **This is the first factor: the human factor—the ceiling of the boss and executives.**

**The second factor is products.** Many distributors work hard for years without sales growth, and they can't figure out why. They've tried every trick, been dedicated and attentive, but why doesn't sales grow? Because you don't have good weapons! Weapons have a huge impact on the outcome of a war. There's also a rule: all distributors who have grown big have brands in their hands. Only having second- and third-tier products makes it impossible to reach 100 million. You need brands in your hands; without brands, it won't work. **Brands are your best weapons.**

**The third factor is the market.** We just mentioned store coverage and market expansion. **At the market level, there are two issues: first, market capacity; second, competitive landscape.** I once met a distributor from Nanyang, Henan. He started doing food business in 2006, and he only represented small brands. He finally got a so-called well-known brand, and he was very excited. He said, "Teacher Wang, this year I want to make the annual sales of this brand exceed 1 million." I said, "Your ideals are full, your goals are clear, but I don't know how you'll achieve it." He told me many methods. I said, "Your methods can work, but if you focus your energy on this product, I estimate you won't achieve it." He asked why. Because the market space for the category he chose was particularly small. **The market space of a category directly determines your sales.** He chose a vermicelli product called Baijia Vermicelli. That year, he shipped a truckload, and it was quickly distributed. He was excited and quickly shipped a second truckload. He said, "Teacher Wang, I've distributed 100,000 yuan worth this month. If I do this every month, I can complete over 1 million." His theory was valid. But many consumers don't even eat a pack of vermicelli a year. The category space is very small. It's unrealistic to sell millions or tens of millions a year. This is category space. When you choose a product, you must consider whether it's a large or small category. Of course, **I'm not saying small categories can't be chosen. They can. If the profit is high and it can make money, it's okay.** So category space is very important.

The second market factor we want to discuss is the competitive landscape. If the market capacity is small, sales can't go up. Then I ask: is it true that if the market capacity is large, sales will definitely go up? No. Many people choose products with huge market space, but sales don't increase. For example, plant-based protein drinks, which have been very popular in recent years. There are five major categories: walnut, almond, peanut, coconut juice, and mixed. But north of the Yangtze River, except for one or two brands, other brands can't succeed. You know the brand you represent has good quality, reasonable price, and considerable profit, but you can't make it work. Why? Because the competitive landscape determines it. **A certain brand is too strong; you're not even on the same level.** So when you represent a product, you can't just consider market space; you also need to consider the competitive landscape. Some say their competitive landscape is fine. Then you need to **consider the trend of your product**. For example, carbonated drinks: Coca-Cola and Pepsi are brands, but in recent years, distributors' sales have declined because the overall trend of carbonated drinks is downward.

But there are exceptions. The overall market trend of a category is declining, but a specific product from a certain company sells very well. For example: instant noodles. Don't look at sales revenue; look at production volume. Sales revenue has increased due to price increases, but actual production volume and packs are declining. Since 2008, instant noodles have been declining. But one product has sold very well in the past two years: Uni-President's Laotan Sauerkraut Noodles. Many distributors have risen by doing this product. Why? Because this instant noodle changed the history of instant noodles. Instant noodles used to be "delicious but invisible." Across China, if you watch ads, the most deceptive category is instant noodles. It tells you there are big chunks of beef and mushrooms. Have you ever seen them? But Uni-President's Laotan Sauerkraut solved the problem of "delicious and visible" because it not only has sauerkraut flavor but also a big pack of sauerkraut. Last year, this product's sales exceeded 5 billion yuan. This shows that when the entire category is bad, a single product can have a huge impact.

**The fourth factor is the mechanism.** Last night, a distributor from Shenzhou said: "I have 8 employees, but the 8 of them together can't do as well as I do alone. I want to hire a batch of employees to free myself, but I find that employees don't produce results. I get anxious and say, 'Let me do it.' I can distribute two truckloads in a day, but the 8 of them can't even finish one truckload in a day." This is a mechanism issue. What is a mechanism? In China, there's Nanjie Village. In the 1990s, Nanjie Village prospered because of common prosperity, and now it's declining because of common prosperity. That's a mechanism. Before the Third Plenary Session of the 11th Central Committee in 1978, there was more land than now, but the whole Chinese people couldn't get enough to eat. Now everyone is well-fed and well-clothed. This change is also due to a change in mechanism. Many distributors complain every day: "My business isn't moving; employees aren't attentive, don't work hard, and execution is poor." That's because your mechanism hasn't changed in 10 years.

We did two pilots in Xinxiang. In one, we achieved over 30 million. The boss said he hadn't grown for three consecutive years. He said, "I've thought of every trick, but still no growth." I said, "There's one trick you definitely haven't thought of: the mechanism trick. Has your management changed compared to three years ago?" He said, "No, it's just more standardized than before." I said, "Standardization can't solve development problems. Standardization is 'technique.' You need to solve the 'way' level problem." When you complain that an employee has poor execution, isn't loyal enough, and doesn't produce results, think about who they're working for. Many employees know they're working for the boss. When the boss started the business, he said, "As long as I have food, you'll have food." But over the past 10 years, the boss has moved into a villa and drives a BMW, while employees still earn 3,000 yuan a month. There are many such distributors.

A distributor in Henan complained about his employees. I chatted with his employees. One employee wiped tears as he spoke. He had worked for the boss for 8 years. When he started, the boss was starting from scratch. Now the boss has annual sales of over 40 million, but the highest commission he gives this employee is only over 4,000 yuan. The employee was very sad: "We started at the same time. Now he lives in a two-story villa, drives a BMW 5 Series, doesn't need to go to the countryside, and only holds a meeting once a month. But I earn only about 2,000 yuan a month in salary, plus commission, which is only about 4,000 yuan." When the employee submitted his resignation, the boss realized there was a problem. So when you go back, first look at your mechanism issues. How can you make your employees move? **Generally, for distributors who don't do well, employees know they're working for the boss. For those who do well, there's a rule: employees know they're working for themselves.**

There's a distributor in Xinxiang with sales of 120 million last year. Why? This distributor made a lot of changes. I asked him, "Do you dare to make your accounts public?" He said, "Teacher Wang, it's okay, as long as I can develop." I said, "Good. Every month, make your accounts public: the gross profit of each product, purchase amount, and profit." He currently has Yili, JDB, and also does a red wine, a white liquor, and a steamed bun slice. Now he makes his accounts public every month, shows how much profit is made, then divides into business units for contracting. Part of the profit is awarded to employees, part stays in the enterprise, and part goes to the boss. His warehouse manager is an old man, a retiree, who invested 100,000 yuan in shares. The warehouse is managed in perfect order. The old man said, "This warehouse is our own. If anyone dares to mess around, I'll fight them!" The old man invested 100,000 yuan and received over 30,000 yuan in dividends in the first year. Every employee is very attentive, and the boss is freed. The boss goes out to attend lectures every day, spending hundreds of thousands of yuan a year on training. This is the boss being freed. Does the boss earn less or more? When everyone works hard for you, the boss earns more. As I said earlier, the more employees you can make believe in you, the more successful you'll be.

So when you go back, think about one thing: how to make employees believe in you and how to solve your mechanism issues. Of course, I've only talked about a concept. We have a course specifically on this, covering salary, funds, stock options, shares, and how to implement them.

Another key issue: some say, "Teacher, my employees have performance, but still no results. Why?" Because your **model has problems**. For example, everyone has watched the Olympics. The Olympics is the greatest sports and cultural feast in human history. But before 1976, the host city was designated by the IOC. Why? Because no one dared to host it. In 1976, the Montreal Olympics lost 1 billion US dollars, and the government almost went bankrupt. In 1980, Russia hosted it. In 1980, Russia spent 9 billion on the Olympics, with 381 sponsors contributing 9 million, losing terribly. But that was a state act. After 1980, many countries didn't want to host the Olympics because whoever hosted it lost money. At that time, the US was the world leader and said, "We'll do it." For the Los Angeles Olympics, there was a genius named Peter Ueberroth. This man was amazing. After him, many countries competed to host the Olympics. Why? He changed the business model. How did he do it? The Olympics needs many venues, right? The Olympics is held during summer vacation. Ueberroth rented university dormitories, requisitioned existing venues, and recruited volunteers. Originally, everyone involved in the Olympics was paid. The term "volunteer" was created by Ueberroth in 1984: "I won't pay you, but you have to help me for free." This saved a lot of venue construction costs and labor costs. Second, Ueberroth said, "This Olympics will only have 30 sponsors, with a starting price of 4 million US dollars each." The previous Olympics had 381 sponsors contributing 9 million. This time, the starting price was 4 million, and only 30 were required. What was this man's brilliance? He went to Pepsi, and Pepsi went to Coca-Cola; he went to General Motors and Toyota, BMW and Mercedes. This is the law of duality, right? If Pepsi sponsors, would Coca-Cola be willing? In the end, this Olympics had a turnover of 760 million US dollars and a profit of 250 million. Both were Olympics, but different methods led to different results. This is called a business model. What does it mean? At a certain point, if you don't change your business model, you can't achieve significant growth. If you say you're just distributing and delivering every day, you'll find that as you deliver, your outlets decrease rather than increase. So you need to change your business model.

To summarize, first, we need to know what causes us to not grow big, not become strong, and not make money. The first is the boss and executive team; the second is products; the third is market expansion; the fourth is mechanisms; the fifth is profit model. So you need to solve these five levels. As for management, execution, and combat effectiveness you mentioned, those will be solved in team management.

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