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Major distributors are like a piece of meat on the manufacturer's chopping block, used when hungry and cut when full. Many companies have achieved leapfrog development with the help of major distributors, but manufacturers also notice that when customers grow too large, they sometimes become a 'tiger raised at home that brings disaster.' Some major distributors 'hold the market hostage to command the manufacturer,' openly opposing them, leading to ruthless 'slaughter' by the manufacturer. Some overreaching distributors become sacrifices in the manufacturer's 'killing the donkey after it finishes grinding.' But more major distributors resolutely engage in a contest with the manufacturer. Among them, some decline because they lose the brands and products they relied on, while others maneuver skillfully and, in the process of negotiating with the manufacturer, develop strategies and tactics for 'counter-kill.' Let's look at several cases:
Case 1: Distributor Lao Li, Who Toppled the Manufacturer's Salesman
FMCG distributor Lao Li once faced a 'slash' from a biscuit manufacturer, but he remained calm, acted quickly, and ultimately resolved the crisis without incident.
In essence, the reason Lao Li was 'impeached' this time was because he was not 'obedient' enough. The manufacturer's sales personnel, unfamiliar with the market situation, gave blind commands and only came at the end of the month to demand payment and push inventory, which caused strong dissatisfaction in Lao Li. Faced with this 'slick old hand' who worked superficially and did nothing practical, Lao Li felt an indescribable aversion. This was not a big deal, as he was doing well with the company's biscuit products and his business was growing. But unexpectedly, one day he received a call from the company's sales management department, notifying him to come to the company. Hearing the voice, Lao Li was a bit surprised but realized he might have been 'stabbed in the back.' Without delay, he drove to the company and arrived promptly. Manager Zhang, in charge of regional sales, received him and told him that the sales staff and downstream customers had complaints about Lao Li: sales growth was too slow, cooperation was poor, and the salesperson had found a new customer to operate the market jointly. Hearing this, Lao Li understood immediately, but he did not rush to argue. Instead, he analyzed the salesperson's specific performance in his market, his own grasp of downstream customers and good customer relations, and tactfully suggested that the salesperson might be 'venting personal grievances.' Then, Lao Li explained to Manager Zhang the disadvantages of running two distributors in parallel, which would inevitably lead to 'the snipe and the clam fighting, and the fisherman reaping the benefit,' allowing competitors to exploit the situation. Manager Zhang seemed to have some insight. Finally, Lao Li suggested that Manager Zhang personally visit the market, and Manager Zhang agreed. Lao Li also told Manager Zhang that if he had a capable salesperson to help with channel refinement, he guaranteed a monthly sales increase of no less than 10%. Hearing the promise of monthly growth, Manager Zhang, who was worried that Lao Li, as a major distributor, might 'shirk responsibility,' after careful consideration, agreed to Lao Li's request. Not only did he not set up a new customer, but he also replaced the salesperson. Thus, Lao Li won this 'counter-encirclement' campaign. Not only was he not eliminated, but he also took the opportunity to get rid of the perfunctory salesperson, which gave Lao Li great satisfaction.
Case 2: Brand Operator Lao Sun, Who Held Two Cards
Lao Sun is one of the few brand operators in Zhengzhou, Henan. He is called a brand operator because, in addition to representing several famous brand products, he also owns his own developed brands and a self-owned brand registered a few years ago. This actually originated from a 'killing' experience a few years ago.
Three years ago, Lao Sun represented a series of products from a famous national beverage manufacturer as a provincial agent. After more than two years of market operation, leveraging Lao Sun's extensive network, the product series soared from zero to annual sales of over 300 million yuan. However, with the entry of competitors, Lao Sun faced a growth bottleneck and was also confused. Unexpectedly, in the third year, the manufacturer, behind his back and without any signs, quietly developed two new distributors in other cities. It was only when the new customers were about to pay and pick up goods that the manufacturer's sales personnel told him. He was shocked and furious.
But the products were theirs, and the brand was theirs; what could he do?
After much thought, Lao Sun decided not to act rashly, as he would only suffer. Fighting against a powerful manufacturer with strong brand strength with his own strength was like hitting a stone with an egg. Lao Sun decided to take a path of self-rescue. So, he privately began to expand other products. Finally, he chose a famous liquor company as a partner and developed two products under his own brand to prevent the manufacturer from cutting off his lifeline. He also set up two teams to operate independently. Thanks to his capable team, the new brand liquor quickly gained momentum. Lao Sun escaped the unfavorable situation of relying solely on one product. At the same time, the two product lines were seasonally complementary, and the channels could be used mutually, so they complemented each other, and sales were relatively stable. After half a year of operation, the beverage manufacturer also found that because Lao Sun had good connections, many distributors and terminal merchants who originally bought from him in various cities still chose to buy here. The new distributors had no choice but to sell at lower prices than Lao Sun to attract customers, leading to a chaotic price system. Taking this opportunity, Lao Sun complained to the manufacturer. Since the establishment of new distributors did not bring much improvement and disrupted price order, after weighing the pros and cons, the beverage manufacturer retracted its authority, and the general distribution rights returned to Lao Sun.
Learning from this lesson, Lao Sun used OEM to produce his own brand of white liquor. In addition, in 2009, Lao Sun's beverage factory broke ground, and a pomegranate juice drink series with his own trademark was about to 'break out of the ground.' Lao Sun's strategic intention was clear: besides owning his own industry to fully utilize his market resources, another purpose was perhaps to guard against the manufacturer's 'crossing the bridge after crossing the river.' Lao Sun believed that only by holding the brand in his own hands could he avoid the fate of being 'poisoned.'
Case 3: Distributor Da Song, Skilled in Upward and Downward Communication
Da Song, in his early thirties, had been distributing a certain brand of beer for five years. During these years, leveraging the scale effect of beer products, Da Song made some small fortune, and his vehicles increased from a motorized tricycle to three cargo trucks. Including logistics staff, salespeople, and delivery drivers, he had a team of over ten people. Although it was a county-level market, this performance was not bad. But unexpectedly, not long ago, the beer manufacturer sent someone to tell him that the company was implementing a comprehensive deep distribution strategy, which would shrink his sales area and develop new distributors to operate, to increase overall market sales.
Hearing the manufacturer's salesperson's words, Da Song was anxious. This county-level market had a population of less than one million, and the current monthly sales of 1,500 tons was already considerable. His three delivery trucks were sometimes idle. Why did the manufacturer want to 'dismantle' him? Da Song was puzzled. He decided to visit the manufacturer himself to see what was going on.
Before going to the manufacturer, Da Song invited the manufacturer's salesperson, Xiao Wang, to a simple meal. After a few glasses of beer, Xiao Wang confided in Da Song that he didn't want to do this either, but the new sales director was eager to show results, and developing new markets takes time. So, it was easier to increase volume by starting with mature old markets and old customers. The purpose of adopting intensive distribution, i.e., setting up multiple distributors, was exactly that. After learning this, Da Song told Xiao Wang to speak well of him to the company, while thinking about how to meet the new leader.
The next morning, Da Song withdrew 200,000 yuan from the bank, plus recent receivables, totaling 300,000 yuan, and went to the beer company. After meeting the new sales director, Da Song first affirmed and praised the company's strategic direction of deep distribution, saying it was wise and he fully supported it. After gaining the leader's approval of his stance, Da Song vividly recounted the ups and downs of distributing the company's products for five years to the new director. Finally, he said that although he agreed with intensive distribution and the distributor model, he further elaborated that deep distribution should be careful not to be 'deep but not selling' or 'deep but chaotic selling,' and explained the root causes. He reiterated that blindly setting up distributors could lead to a chaotic price system and ultimately harm the market.
When the sales director asked him how to quickly increase volume from old customers, especially major ones, Da Song expressed his views: setting up sub-distributors is acceptable, and channel sinking and fighting for the terminal are future trends. However, he suggested that the manufacturer's sales personnel assist the distributor in doing this work. The benefits are that it can be planned and set up by region, and because he knows the downstream customers well, the sub-distributors can be effectively controlled to avoid losing control and disrupting price order. Finally, Da Song told the director an embarrassing case of a local brand that, due to disorderly and blind establishment of a large number of sub-distributors, ended up with good products but no one willing to distribute them because of transparent products, transparent prices, chaotic pricing, and no profits. The sales director nodded repeatedly. Finally, Da Song handed over the 300,000 yuan he brought to the company in front of the director, and promised that upon returning, he would immediately start the selection and establishment of sub-distributors, and sales would gradually increase. In a friendly atmosphere, Da Song shook hands with the sales director and left. Da Song finally avoided the fate of being 'split up.'
Analysis:
Happy manufacturer-distributor relationships are all similar; unhappy ones are each unhappy in their own way. As in the three cases above, although the reasons for 'killing the big household' differ, some methods of 'counter-kill' can still be summarized.
Facing slaughter, do not be a lamb led to the slaughter. The good are bullied, and the weak are ridden. Facing the manufacturer's high-pressure policies, distributors should be good at and dare to speak out. In manufacturer-distributor cooperation, there are always some sales personnel who, like a fox borrowing the tiger's might, act on personal likes and dislikes, falsely transmit 'imperial edicts,' and even arbitrarily cut off customers. When a famous food group invited the author to give a lecture, the marketing director specifically told the author to guide salespeople not to arbitrarily decide the 'life and death' of customers based on personal feelings or likes and dislikes, which shows the seriousness of the phenomenon of indiscriminate killing and cutting of customers in this enterprise. Therefore, as a distributor, when facing such enterprises and salespeople, one should dare to express one's practices and opinions to the enterprise and leaders, and sometimes even risk bypassing one's immediate superior to avoid being 'slit' without knowing how one 'died.' In Case 1, Lao Li, facing the salesperson's unreasonable slander, did not show weakness. Instead, he appealed to the manufacturer's manager in charge, making his actual situation, especially the market situation, clear to the superior, and proactively invited the enterprise leader to visit the market in person to 'verify.' Thus, while 'seeking justice,' he also received fair treatment.
Always be prepared; do not believe that 'the wolf will fall in love with the sheep.' The manufacturer-distributor relationship is a game, a contest. When one party is of no value to the other, it is often time to part ways. The value of a distributor to a manufacturer varies at different stages of market development. For example, some manufacturers use major distributors merely to 'borrow the channel to water,' and once the goal is achieved, they always think of crossing the bridge after crossing the river to gain greater sales and benefits. This is understandable; most manufacturers are like this. But for distributors, it is not so simple. The territory they worked hard to conquer is now to be handed over to others; it is unwilling, but what can be done? Strength and scale are so unequal. So what should distributors do? There is one method: keep a card up your sleeve, that is, leave yourself a way out. In Case 2, Lao Sun, facing the manufacturer's ruthlessness, did not lose heart or complain. Instead, he dealt with the situation flexibly by expanding his product line, i.e., re-representing complementary new products. This did not offend the manufacturer and also left himself a way out, making the manufacturer realize that he could survive without them. Heaven helps those who help themselves. Through flexible maneuvering, representing other products, independently developing products, and later owning his own industry and self-owned brand, Lao Sun gradually moved from passive to active and ultimately controlled his own destiny. He is a benchmark and model that many distributors can learn from.
Engage in two-way interactive communication with the enterprise to maintain good manufacturer-distributor relations. Many contradictions and disputes between manufacturers and distributors, and many distributors becoming 'scapegoats' or 'wronged ghosts,' are sometimes caused by neglect of communication or inadequate communication, leading to misunderstandings.
Some reasons are due to sales managers not understanding the market or customers, giving blind commands, or other reasons, such as the new leader's target pressure in the case. Therefore, if faced with the above situations, without correct, two-way, interactive communication, misunderstandings, disputes, deepening rifts, and finally mutual sabotage and a lose-lose outcome are inevitable. In the case, Da Song, facing the pressure of market 'decomposition,' did not engage in futile disputes with the manufacturer. Instead, he first communicated with the salesperson, then proactively went to the enterprise to communicate with the sales manager. Through communication, he let the manufacturer's personnel understand his intentions. People are emotional animals. By moving the leader and proactively seeking change, supporting the leader's work in deep distribution, etc., he finally reversed the seemingly settled decline, allowing market changes to proceed step by step according to his own plan. Therefore, maintaining effective communication with the enterprise's upper and lower levels is one of the guarantees to avoid being harmed.
But distributors should also pay attention to the following points when countering 'being killed':
Avoid direct conflict with the enterprise. If a distributor encounters an irresponsible salesperson, do not rush to argue with them to prevent things from getting worse. Instead, like Lao Li in the case, learn to take a roundabout way, through appeal, not only letting the enterprise understand you but also causing the incompetent salesperson to 'fall.'
Do not ignore small roles. The county official is not as good as the local manager. Some major distributors are killed because some salespeople cannot control the distributor, are looked down upon by major customers, or even face 'threats,' and are constantly troubled by customers demanding policies. When their pressure and grievances exceed a certain limit, they will continuously report to their leaders, telling all kinds of faults of the distributor, even fabricating 'crimes.' 'A lie repeated a thousand times becomes the truth.' It is not surprising that deceived leaders then strike hard. Therefore, regardless of your sales volume, distributors should treat the manufacturer's grassroots sales personnel well, communicate with them well, treat them like their own people, as brothers and partners. Only then, when the enterprise has any wind and grass, will the salesperson be on your side, avoiding unfair treatment.
While eating from the bowl, it is okay to look at the pot. Manufacturers and distributors are in an interest relationship, and there is no banquet that does not end. Especially in enterprises, 'iron camps, flowing soldiers,' under the situation of 'one dynasty, one minister,' as a distributor, no matter how strong your strength or how high your sales, you should be prepared for danger in times of peace and have a sense of crisis. Only by holding two cards, like Lao Sun in Case 2, can you maneuver skillfully and handle the relationship with the manufacturer. Therefore, as a distributor, never put all your eggs in one basket. Only by having other brands or products in hand can you truly control your destiny and not be led by the nose by others.
Maintain communication and understand the leader's needs. Of course, to avoid being 'killed' by the manufacturer, distributors should also learn to communicate fully and effectively with marketing personnel at all levels of the enterprise. First, communicate fully with the salesperson to gain their strong support. Do not 'not treat the village head as a cadre'; small roles are most likely to stir up trouble. At the same time, maintain communication with the superior manager, so that the salesperson does not dare to look down on you and you are not deceived. For distributors who do not want to be bullied, sometimes the manager is their god. They often hold the power of life and death over customers. Therefore, understand them and try to 'cater' to these leaders. To 'please' the leader, you must understand and discern their needs, such as responding to the enterprise's marketing calls, adjusting and optimizing product structure, continuously developing new customers, actively promoting new products, strong execution in terminal activities, and continuously improving your sales. Only by grasping the leader's needs can you be welcomed by them and better navigate all sides.
In summary, when facing the manufacturer's suppression and 'slashing,' as a distributor, you should not act on impulse or jump to conclusions. Only by finding the problem, communicating and exchanging with the enterprise in a timely manner, and eliminating misunderstandings can distributors avoid the risk of being 'wrongly killed.' At the same time, as a distributor, you should strengthen your core competitiveness, build a team, construct a complete network system, focus on service and customer relations, and operate multiple brands complementarily. Only in this way can distributors, in the game with the manufacturer, be neither humble nor arrogant, ultimately gain the 'initiative' in dealing with the manufacturer, strive for better operating conditions and market support, and more effectively counter 'being killed.'
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