For manufacturers, issues like county-level distributor instability, poor market operation capability, and low loyalty are common topics. At the same time, the problems seen with county-level distributors also appear with prefecture-level and even provincial-level distributors; these issues are not exclusive to county-level distributors. In fact, current county-level distributors are the early form of prefecture-level distributors. As for how to solve these problems, countless experts and masters have said the same things over and over, using only a few methods, but after more than a decade, they are still going in circles. The fundamental problems remain unresolved, and distributor management issues recur year after year.
What does "instability" mean? What does "poor market operation capability" mean? What does "low loyalty" mean? It seems that all responsibility is shifted onto the distributors: distributors are backward, short-sighted, so they need to be educated and managed. Manufacturers see themselves as managers and view distributors as subordinates to be managed. This is where the conflict begins, because distributors also like to see themselves as managers of their local markets. In their own territory, they have the final say, and they try to make manufacturers obedient subordinates: manufacturers should bear costs, manufacturers should invest, manufacturers should do this and that. The question of who is the boss and who is the subordinate creates conflict from the start. Both sides see themselves as managers, so it is no wonder they clash.
The author is a distributor. At the very least, manufacturers and distributors should be equal business partners. Both sides are equal, and neither should try to be the other's manager. Once this premise is established, we can then discuss the specific problems in their cooperation.
Looking at the broader trend, the channel sinking in manufacturers' sales work is becoming more evident. From having one distributor for several provinces in the early years, to setting up distributors at the prefecture level, and now opening separate distributors even at the county level, whether manufacturers cooperate directly with county-level distributors or manage them through prefecture-level distributors, problems like instability, poor operation capability, and low loyalty are common. In fact, these issues are just surface phenomena. To solve them, we should not dwell on the surface but dig into the problems behind the problems to find the root cause.
Understanding is the basic premise of cooperation. How much does a manufacturer really know about its distributors? Perhaps with prefecture-level distributors, after years of磨合, there is some understanding, but now with deeper cooperation with county-level distributors, has the understanding work been done properly? We cannot simply apply the same approach used for prefecture-level distributors to county-level ones, as there are significant differences in market background, scale, business format, and management characteristics. Therefore, the understanding work must be thorough, and we must also clarify the differences between prefecture-level and county-level distributors, rather than simply applying the old distributor management policies.
Problems like county-level distributor instability, poor operation capability, and low loyalty are faced by many manufacturers, indicating that their distributor management thinking is homogeneous. This homogeneity inevitably leads to homogeneous management models, resulting in the same management outcomes. That is why the same problems recur across multiple manufacturers. We talk about differentiation, positioning, and innovation every day, but in reality, these are just slogans; differentiation is just a legend. Of course, the distributor management strategies formulated by various manufacturers may not be wrong, but since everyone is doing the same thing, the so-called strategies are almost routine, and distributors have seen them all and know them by heart.
Where can differentiation be reflected? There are many opportunities. The author will just offer one example: when manufacturers emphasize cooperation policies and benefits to distributors, they almost always talk about how to achieve greater sales and help distributors earn more profit. However, in business, sales are just the process; what everyone ultimately wants is the result, which is net profit. Between sales and net profit, there is a key factor: cost. The ancients emphasized that business should increase revenue and reduce expenditure—both increasing sales and reducing costs. Only by combining these two can net profit be fundamentally improved. But currently, manufacturers only emphasize how to increase revenue, rarely mentioning how to help distributors reduce costs, i.e., help them save money. If a manufacturer helps distributors increase sales while also helping them reduce costs, working on both fronts to fundamentally improve net profit, would that not be a form of differentiation?
- From trade relationship to cooperative relationship. Although the vast majority of manufacturers claim to cooperate sincerely with distributors, in reality, quite a few manufacturers view distributors merely as sales tools. County-level distributors are seen as even more low-level and somewhat rustic sales tools. The guiding philosophy in their interactions is essentially a trade relationship—goods for money. The manufacturer's policies and management models are all just to serve product sales, and further, to maximize the manufacturer's own interests. The distributor's greatest value is to be obedient, take goods with money, and sell diligently. When distributors have problems and their sales capability declines, manufacturers first try education and brainwashing; if that fails, they may use the excuse that the distributor cannot keep up with the manufacturer's development and eliminate them.
Manufacturers think this way, and distributors think the same. When there are difficulties in promoting and selling the manufacturer's products, distributors will demand investment and support from the manufacturer. If the manufacturer does not provide it, they may simply give up, and they will not engage in market building or brand cultivation for the manufacturer. When the manufacturer's products cannot be sold, they terminate cooperation and switch to another manufacturer. After all, new manufacturers are constantly emerging. As for practices like cross-region dumping and disrupting the price system, although they harm the manufacturer's overall market sustainability and long-term interests, they satisfy the distributor's immediate interests, so distributors naturally continue doing them.
So what is a cooperative relationship? On the basis of a trade relationship, it also involves caring about the other party's overall growth, helping partners prevent or solve problems in a timely manner, and achieving healthy and sustainable development. As a manufacturer, when dealing with distributors, in addition to regular product sales work, it should proactively help distributors identify and discover various problems, help them solve these problems through various means, enhance their sales capability, improve management systems, establish plans, and prevent new problems from arising from a preventive perspective, truly realizing a cooperative relationship.
The three points mentioned above—deeply understanding distributors, implementing differentiated cooperation strategies, and elevating from trade relationship to cooperative relationship—if these three can be achieved, will the loyalty and instability issues mentioned at the beginning of this article be alleviated or resolved to some extent?
Pan Wenfu: Born into a private business owner family, he managed a family distributor company for over ten years and held positions such as sales manager, marketing manager, and trainer at several well-known manufacturing enterprises. He has dual perspectives and experience as both a distributor owner and a manufacturer's distributor manager. His research focuses on internal management optimization of distributor companies, corporate transformation, innovative business strategies, operating cost savings, and optimization of manufacturer-distributor relationships. He has the largest distributor research database in the country and has been collecting materials and researching solutions for over 400 topics related to distributor companies.
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