---
title: "How Distributors Can Prevent Manufacturers from Burning Bridges"
description: "Distributors often accuse manufacturers of 'burning bridges' after crossing the river, but the author, with over 20 years in marketing, has never seen a manufacturer that doesn't. Distributors should not moralize; instead, they must recognize that they are merely 'tickets' that can be torn up as manufacturers refine their markets. To survive, distributors must build irreplaceable value in their niche, while manufacturers and sales reps should strategically plan channel evolution and manage distributor networks to prepare for inevitable changes."
author: "魏庆"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-07-30"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/how-distributors-can-prevent-manufacturers-from-burning-bridges-4bdd7bc8/"
markdown: "https://xinjignxiao.com/en/articles/how-distributors-can-prevent-manufacturers-from-burning-bridges-4bdd7bc8.md"
original_source: "https://mp.weixin.qq.com/s/yeNMjjzdUWqx6vaaXTSefA"
translation: "https://xinjignxiao.com/zh/articles/%E7%BB%8F%E9%94%80%E5%95%86%E5%A6%82%E4%BD%95%E9%98%B2%E6%AD%A2%E5%8E%82%E5%AE%B6%E8%BF%87%E6%B2%B3%E6%8B%86%E6%A1%A5-4bdd7bc8.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/how-distributors-can-prevent-manufacturers-from-burning-bridges-4bdd7bc8/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# How Distributors Can Prevent Manufacturers from Burning Bridges

> Distributors often accuse manufacturers of 'burning bridges' after crossing the river, but the author, with over 20 years in marketing, has never seen a manufacturer that doesn't. Distributors should not moralize; instead, they must recognize that they are merely 'tickets' that can be torn up as manufacturers refine their markets. To survive, distributors must build irreplaceable value in their niche, while manufacturers and sales reps should strategically plan channel evolution and manage distributor networks to prepare for inevitable changes.

Distributors often accuse manufacturers of "burning bridges after crossing the river." Stop complaining, because in my over 20 years in marketing, I have never seen a manufacturer that doesn't burn bridges.
Distributors should also not engage in moral blackmail or feel indignant. Imagine if one day the manufacturer gets into trouble and is about to go under. Would the distributor chivalrously say, "I'll die with the manufacturer, oy?"

**Distributors are a "ticket" that can be "torn up" at any time**

As mentioned earlier, the number of people doing terminal sales will only increase. Market maintenance will become more detailed. This means the trend for distributors is definitely towards miniaturization and specialization.

Miniaturization: Distributors' territories will become smaller and smaller. In developed cities in the Pearl River Delta and Yangtze River Delta, distributors have already expanded to the township level. Only when a distributor's territory is small can they truly achieve intensive cultivation and market maintenance.

Specialization: Manufacturers will open several channel distributors in one region: distributors specializing in catering, supermarkets, circulation, group buying, etc.

What does this trend mean? It means that the distributor's territory will further shrink, even to a specific channel in a county or township.

Distributors have become a "ticket" for manufacturers to continuously refine their market!

Like a movie ticket, it is useful before entering, but after entering, it is often "torn up"—torn into small pieces, and finally possibly thrown away. Similarly, manufacturers must rely on distributors to start new markets at low cost (using the ticket to enter). As the product grows in the local market, the manufacturer will gradually increase local manpower and market control, may add distributors for intensive distribution (tearing the big ticket into small pieces), and in some areas may go direct (possibly throwing away the movie ticket).

Too cruel! Burning bridges!

Distributors often accuse manufacturers of "burning bridges after crossing the river." Stop complaining, because in my over 20 years in marketing, I have never seen a manufacturer that doesn't burn bridges.

Distributors should also not engage in moral blackmail or feel indignant. Imagine if one day the manufacturer gets into trouble and is about to go under. Would the distributor chivalrously say, "I'll die with the manufacturer, oy?"

Looking back at China's 30-plus years of marketing history, which manufacturer did not develop by burning bridges? This is the market game rule, an inevitable outcome.

Over 30 years of market economy development, manufacturers have shouted several slogans, each new slogan making distributors "pack up and leave."

Around 1992, manufacturers shouted the first slogan: from big agent to intensive distribution. Since then, the once-glorious North China general agents and South China general distributors have "rolled heads and left bloodstains." Now, not to mention general agents, provincial-level distributors are rare.

Around 1995, some enterprises began to shout the slogan of terminal sales. Distributors' territories became even smaller, and they had to go out to stock shelves. Currently, in the consumer goods industry, the "sitting merchants" who stay at home waiting for business have mostly "died in battle."

In 1997, with the "channel intensive cultivation" plans of several foreign consumer goods companies, the "pre-sale system" became more common. Manufacturers' sales reps personally visited terminals to take orders and deliver goods to distributors, further "degenerating" distributors into delivery drivers.

After 2000, hypermarkets flourished. Manufacturers forced distributors to obtain general taxpayer qualifications, pay fees, and hire promoters to do supermarkets. Distributors paid a lot of tuition just to learn how to do supermarkets. International chains then proposed direct cooperation with manufacturers, and more and more manufacturers began to directly operate hypermarkets. Many manufacturers chose distributors as supermarket service providers with a profit-after-rebate model: distributors deliver goods to supermarkets (the manufacturer "borrows" the distributor's goods to supply supermarkets), supermarkets pay the contract party (the manufacturer), and distributors reconcile accounts with the manufacturer at the end of the month based on supermarket receipts. The manufacturer "returns goods" to the distributor and also gives the distributor a few points of distribution service fee based on the delivery amount.

From "big agent" to "intensive distribution" to "pre-sale system" to "profit after rebate," the manufacturer's hand has been reaching further and further. Distributors have been "hollowed out"—previously the market was in the distributor's hands, now the market is gradually manufacturer-led. Manufacturers no longer rely on distributors for sales but borrow their distribution capabilities, warehousing capabilities, and financial pressure capabilities. Manufacturers say they let distributors complete distribution work, but in reality, "selling" is just a form; "distribution" is the essence.

Previously, distributors were gods. Big distributors even dared to go to the factory and throw the general manager's cup, often making demands like "If you don't give me a few more points, I won't do it." Now distributors are still gods, but they are no longer exclusive, so there are many gods. Even a county may have two gods, and even the streets are full of gods. The former "gods" were very powerful, but now the "gods" are more passive—you must be obedient; only if you are obedient are you a god. If you are not obedient, the manufacturer may "torture" you and finally make you "hit the road."

Manufacturers, for survival, must divide distributor territories and refine the market; this is a business law. Supermarkets, for business, hope to cooperate directly with manufacturers to get more support; this is also forced by circumstances. Manufacturer-distributor games, burning bridges is the inevitable outcome; everyone is helpless! The frog wants to live, the snake wants to be full; Qin Xianglian and the imperial sister both have reasons, only Chen Shimei is not human! It's hard for distributors to become a bridge that is dismantled after crossing. No wonder distributors complain: The brand is the manufacturer's, the market is the terminal's, we distributors are just "pimps." We are not afraid of infighting among distributors; we are most afraid of the manufacturer changing their mind, saying we can't sell, and then we have no profit. "After gathering all the flowers into honey, for whom is the hard work? Living from hand to mouth!"

**How distributors face their fate of being "burned bridges"**

**Option 1: Be foresighted, follow the trend,** and build core competitiveness in a small area and a specific professional channel with intensive cultivation. Countless facts and cases prove that distributors who intensively cultivate their small area will definitely gain more profit than those who manage a large market with extensive management.

**Option 2: Structure determines function.** In the future, the only reason a distributor can represent a larger area is not because of large sales volume, but because they have enough team and ability to do the market meticulously. So, plan ahead, ensure structural support, add people and vehicles, open branch offices, and even strive to form a "joint sales body" with the manufacturer, so that you can intensively cultivate a larger area and more channels. At the same time, tap internal management potential, seek better product portfolios externally to absorb costs, and ultimately strive for a larger territory and living space.

**Option 3: Open up new opportunities.** Forward development, such as building your own terminals or hypermarkets; backward development, such as OEM or even becoming a manufacturer; or enter new industries; or passively accept elimination.

Remember, your reward is not related to your effort, but is proportional to your irreplaceability. When you have irreplaceable value in a certain field, burning bridges has nothing to do with you. Otherwise, this old ticket of yours cannot board the manufacturer's broken ship.

**How manufacturers face the distributor's "old ticket"**

Manufacturers' channel layout must have strategic intent, "planning the present according to the future, not planning the future according to the present." For example, do not blindly sign exclusive general agency agreements with big customers to avoid obstacles for future channel refinement; for example, if the supermarket contract party is the distributor's name, changing accounts in the future will be complicated and costly, so it is best to start a tripartite agreement for the hypermarket system (Party A: supermarket, Party B: manufacturer, Party C: distributor—the distributor becomes an authorized service provider, and future account changes are not costly); for example, set up sub-distributors under the distributor and include them in the manufacturer's visit management system, preparing for future distribution to become distribution; for example, broaden the product line and build new distributor channels through product segmentation... In short, when manufacturers cooperate sincerely with distributor friends today, they must plan "how my future performance doubling will be reflected in channel refinement."

**How manufacturer sales reps treat the distributor "old bridge"**

Sales reps manage distributors, always ready to "tear up the ticket."

Don't misunderstand; the "tearing up the ticket" here is not the gangster's "tearing up the ticket," but refers to preparing in advance to replace the distributor when necessary.

What are the specific actions?

**First,** as a salesperson, **be cautious when selecting distributors for new market development.** Look for customers who can truly help the company quickly open up the market (don't change distributors easily).

**Second, during the later market management process, be sure to go deep into the market front line,** coach distributors in terminal sales, and at the same time grasp the distribution network of distributors and local key customers.

If a distributor dares to slam the table and say, "If you don't let me do it, I'll make sure you can't enter Hangzhou"—this shows that you really know nothing about the distributor's distribution network.

If you can say to the distributor, "Don't jump. If you jump again, I'll replace you. Within a month, I'll support a new one with more sales than you"—this shows that the distributor's downstream network is all in your hands, and you have good relationships with their key customers.

**So how to grasp the distributor's downstream network?** From an operational perspective, common methods are as follows:

**(1) Implement the pre-sale system to control terminals**

Explanation: The manufacturer stations sales personnel in the distributor's city to set up an office, help the distributor visit wholesale and retail customers, supermarkets, and hypermarkets, take orders, and do market maintenance. The product flow is completed by the manufacturer, and the distributor is actually a logistics and financial flow.

Advantages: Terminals are completely in the manufacturer's hands. Operations are very proactive.

Disadvantages: High cost, difficult management, and the local office director may be "bought off" by the distributor.

**(2) Master the terminal network list through promotional activities**

Explanation: Two common methods:

**One: Help the distributor hold a local customer ordering meeting.**

**Two: "Wholesale points reward"** (for example, give the distributor 100 registration cards, let them record the purchases of each important customer for the quarter. At the end of the quarter, the distributor collects the cards and returns them to the company. The company can understand each customer's sales volume through the records on the cards, and then the company provides resources to reward key customers, helping the distributor motivate downstream customers to increase their purchasing enthusiasm).

Special note: Be careful! The numbers on the so-called customer purchase record cards collected at the end are mostly fake. The distributor will definitely manipulate them, inflate sales, and intercept prizes. But the customer names, addresses, and phone numbers are real. Although the purchase numbers are inflated, it can still reflect which customers are relatively large and which are relatively small.

Advantages: Low cost, quick data establishment.

Disadvantages: High distortion rate, and operations are mainly distributor-led. The manufacturer only establishes data, without customer trust or relationships.

**(3) Sales reps visit customers to establish network data and initial relationships**

Explanation: While visiting distributors, sales reps also ride along to visit downstream customers, giving special "care" to key accounts and forcibly building files.

Advantages: This method not only establishes data files but also provides absolutely first-hand information. Direct face-to-face communication with customers builds initial relationships, making future entry relatively easier.

Disadvantages: This method is relatively clumsy, slow, and requires sales reps to be dedicated.

**(4) Establish closed channels**

Explanation: Two common methods:

**One: Fully closed channel.** Distributors and wholesalers need to sign contracts with the manufacturer, called authorized first-level distributors, second-level distributors, and sub-distributors. When all customers become contractual customers of the manufacturer, the network is naturally in the manufacturer's hands.

**Two: Semi-closed channel.** Establish sub-distributors. When there is a blank area in the distributor's territory, the manufacturer can take the opportunity to set up a sub-distributor, who purchases from the distributor at the manufacturer's price (the distributor gets a rebate) to help the distributor do the market. The manufacturer can participate more in the selection and management of sub-distributors, and when necessary, use the sub-distributor to replace the distributor. At that time, the sub-distributor becomes the distributor's "gravedigger."

Advantages: Once a closed channel is established, the entire upstream network is under the manufacturer's control, reducing price cutting and cross-region sales.

Disadvantages: A fully closed channel means a reduction in the number of wholesalers, reducing distributor sales opportunities. If the product itself doesn't sell fast and profit is not high, a fully closed channel has no cohesion.

Setting up sub-distributors in a semi-closed channel is a good method, but generally, there are two layers of resistance during the establishment of sub-distributors: First, the distributor will feel that "death is near" and be unwilling to cooperate; second, the sub-distributor will feel that this role is like a "mistress" rather than a "wife," and be unwilling to stoop.

**(5) Help distributors establish internal management software systems**

Explanation: Distributors configure computers, but it's actually for show, at most for printing orders. Customer data is not classified and filed, warehouse numbers cannot be controlled in real-time, and even accounts receivable are a bunch of IOUs stored in drawers. However, some powerful large manufacturers also help distributors establish computer management systems networked with the manufacturer, thereby, while helping distributors improve management, grasping all of the distributor's financial data, storage and transportation data, customer data, and sales dynamics.

Advantages: Distributors are almost completely "incorporated" by the manufacturer. At the slightest sign of trouble, the manufacturer can immediately react.

Disadvantages: This method requires high capital investment and education costs. Coca-Cola promoted this practice, implementing SDS (Distribution Management System), and it took four or five years to see initial results, with huge investment. Generally, small and medium-sized enterprises can only watch and envy.

**Extended Reading:**

## How can distributors prevent being hollowed out by cooperating manufacturers?

**Question**

**Manager Xie, Jiangxi Guangchang Trading Company**

I am a regional distributor for a first-line food brand, with more than a dozen second-tier wholesalers below me. In the past two years, the manufacturer has begun to value several of my second-tier wholesalers, not only promoting them to special second-tier wholesalers but also managing them directly, with their sales data controlled by the manufacturer. I am very worried that in this situation, I will be hollowed out by the enterprise and lose my due benefits. How should I proactively respond to the possible predicament?

**Answer**

**Shi Xianlong, Chairman of Bonarui Cheng Consulting**

This is a reaction at the distributor level caused by the prevalent "channel flattening" in the food industry. It is said that manufacturers control second-tier wholesalers mainly to control market order, stabilize price, and put more pressure on distributors. Some manufacturers are also seeking to transform their sales models, implementing "direct operation," taking back the distributor's price difference, establishing their own sales organizations, first setting up offices to understand the channel, and then opening branch companies to fully control the market.

In response to this situation, I propose several countermeasures that can be implemented step by step:

First, sincerely share sales data with the manufacturer, use strength to win more recognition and support from the manufacturer, cooperate with the manufacturer, seek business opportunities from cooperation, and shift sales pressure to the manufacturer.

Second, occupy core channel resources. It is recommended that distributors break up overly large second-tier wholesalers, especially those in traditional wholesale markets, and implement a "divide and conquer" strategy in areas with convenient logistics. Because second-tier wholesalers in mature markets and convenient transportation are most easily valued by manufacturers, this hidden danger should be resolved as soon as possible. At the same time, large second-tier wholesalers can be established in weak market areas. These second-tier wholesalers will not pose a threat to themselves, but can help integrate the market, using strategy to set up market barriers and clear obstacles for themselves.

Third, reasonably plan the share of wholesale volume and direct-controlled terminal sales in the business structure. For mature products, it is recommended to adopt a direct supply model because the profit space is transparent, and direct-controlled channels can increase distributor profits and maintain close cooperation with the manufacturer. For new products, because the gross profit margin is higher, they are more suitable for extensive distribution. Generally, when the agency product is still a new product, the market wholesale volume and direct-controlled volume should be maintained at a ratio of 5:5 or 6:4, while in the mature period, it should be stabilized at 2:8 or 3:7, so as to maximize the distributor's interests.

Fourth, when the manufacturer shows signs of taking over the market, immediately give up non-profitable channels. When it really comes to this, the distributor does not need to maintain full-channel sales. They can avoid a falling out with the manufacturer, but they must protect their own interests to the greatest extent. First, quietly analyze the sales profit of each channel of the distribution manufacturer separately, reduce investment in low-profit channels, or even give up that channel. Be careful not to raise prices. Once prices are raised, the enterprise will use this as a reason to quickly take direct control of the market and "kick the distributor out."

-END-

The best FMCG distributor learning platform in China
Focusing on providing professional, practical, and useful 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]


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671