Making money and becoming valuable are two different mindsets, two different strategies, and two different tactics. As the bridge and link in the traditional F2B2b model, distributors will play different roles, undertake different functions, shoulder different missions, and achieve different fates in the past, present, and future of manufacturers' business activities. The traditional relationship among manufacturers, merchants, and customers is contradictory. Manufacturers focus on efficiency, customers focus on utility, and merchants focus on profit.
Manufacturers pursue efficiency maximization:
Large-scale, small-batch, high-volume production to reduce variable costs, achieve maximum enterprise scale, lowest prices, maximum market share, and maximum profit.
Customers pursue product cost-performance maximization:
That is, good product functionality, good quality, low price, fast logistics, and good service—i.e., utility maximization.
Merchants pursue profit maximization:
For any product, any function, any brand, any field, merchants treat products as tools for making money—whether they can make money, how much, how long, and how fast—profit maximization is their core purpose. According to the above, manufacturers, merchants, and customers have different positions, goals, and perspectives; as three nodes in the industry chain, they are in a unity of opposites. As the intermediate link, how can distributors achieve the goal of first making money and then becoming valuable? This article first analyzes the thinking of distributors making money and becoming valuable from the perspective of the manufacturer-merchant relationship. Manufacturers are mainly divided into three categories: international first-line brands, domestic first-line brands, and domestic growth brands. First, international first-line brands have advantages in technology, capital, quality, and brand, allowing them to seize the lead in OEM supply. In the aftermarket, they rely on extensive sales methods—finding several large distributors in China to distribute products—and leverage brand power to make substantial profits, becoming the most profitable players in the aftermarket. Due to brand recognition, they have also become favorites of chain, e-commerce, and alliance platforms represented by Kangzhong, Zhongche Chefu, Kuaizhun Chefu, and Jiquan Chebao, further suppressing domestic brands in terms of channels beyond products. Because they have been in the Chinese market for a long time and have high visibility, prices are transparent, resulting in thin or no profits for both online and offline merchants, while manufacturers become the biggest winners. Distributors in today's aftermarket must adjust their perception of international first-line brands, redesign their positioning in their own companies from a strategic height, and take measures promptly, with plans, goals, and timelines. Second, domestic first-line brands have a first-mover advantage in time, becoming the top three domestic brands in a certain category, with advantages in both absolute sales volume and market share. However, most categories lack innovation and advantages in technology, and compared with international brands, their price space is sharply compressed. To maintain market leadership, they adopt extensive sales methods, but the two puzzles of high receivables and high inventory remain unsolved, leading to increasing risks and deteriorating operational quality. Finally, domestic growth brands refer to companies that OEM for international first-line brands and export to Europe and North America, or supply OEM, but have not yet sold or just started selling in the aftermarket. These manufacturers may avoid the high receivables and high inventory problems of domestic first-line manufacturers by adopting a deep distribution model, resolving the fundamental contradiction between manufacturers and merchants—the conflict between efficiency and profit—and achieving orderly, benign, and healthy market development. How can distributors first make money? From the supply chain perspective, how to allocate their tangible and intangible resources among international first-line brands, domestic first-line brands, and domestic growth brands is already a strategic issue. International first-line brands provide direct visibility and increase stickiness with repair shops. However, transparent prices become a source of conflict between distributors and repair shops, and the solution is either further price cuts or extended credit periods, sacrificing operational quality and increasing operational risk. Domestic first-line brands provide scale, offer a price and quality gradient complementary to international first-line brands, and strengthen stickiness with repair shops. Domestic growth brands are the real profit points for the future; if there is an opportunity, you must seize it, hold it tightly, and never let go!!! In the product line portfolio, form a wild goose formation. That is, have a high-stickiness product line, a large-scale product line, and a high-profit product line. A perfect combination of product lines gives distributors an advantage in products first. According to the above views, how distributors match their company resources with the three types of manufacturers becomes a strategic issue that must be decoded into tactical answers. Transforming principled issues into concrete solutions requires time, experts, teams, and execution. Given that manufacturers pursue efficiency, merchants pursue profit, and customers pursue utility, merchants should understand a truth when using products as profit tools. First, if merchants do not receive support from manufacturers, they cannot continuously improve product cost-performance; that is, merchants cannot replace the manufacturer's function. Driven by the law of diminishing returns, merchants are forced to provide better cost-performance products, and they must use their own capabilities to select manufacturers with higher cost-performance. Second, without cooperation based on the supply chain between manufacturers and merchants, it is difficult for merchants to establish their own brands. The essence of merchants is to provide the best cost-performance products. The most valuable in the aftermarket are auto parts chain stores and auto repair chains. The core value of the former lies in products and supply chain; the core value of the latter lies in people and technology. Distributors' other functions, such as warehousing, distribution, credit, and service, have value, but the core value to repair shops is the supply chain—complete products, good quality, and low prices. Agency rights for domestic growth brands are rare and hard to come by. Under the new normal, domestic growth brands are most likely to skip extensive sales methods, directly enter deep distribution, and in the shortest time enter community business, achieving the F2b (F2C) model, turning repairmen across China into brand fans, making them free salespeople for the brand. Professional, simple, and honest repairmen directly recommend products to car owners—this is definitely the king of marketing. Note: The three business activity methods of enterprises are extensive sales, deep distribution, and community business activities, which respectively solve the product-money relationship, product-customer relationship, and enterprise-customer relationship. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brand | 016 Distributor B2B transformation | [Long press QR code to follow]