--- title: "How Should Distributors Survive in 2015?" description: "As 2014 comes to an end, many distributors find that after deducting personnel, operating, and management costs, their profits are minimal. With intensifying market competition and slowing economic growth, distributors face pressure from both manufacturers and terminal clients. To survive in 2015, they must focus on strategic planning, continuous learning, management improvement, channel maintenance, product structure optimization, and inventory management." author: "师顺宽" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2014-12-16" language: "en" canonical: "https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2015-b43cd988/" markdown: "https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2015-b43cd988.md" original_source: "https://mp.weixin.qq.com/s/Mvh8_cRHqZJ9Qw1YIbjkAw" translation: "https://xinjignxiao.com/zh/articles/2015%E5%B9%B4-%E7%BB%8F%E9%94%80%E5%95%86%E8%AF%A5%E6%80%8E%E4%B9%88%E6%B4%BB-b43cd988.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2015-b43cd988/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # How Should Distributors Survive in 2015? > As 2014 comes to an end, many distributors find that after deducting personnel, operating, and management costs, their profits are minimal. With intensifying market competition and slowing economic growth, distributors face pressure from both manufacturers and terminal clients. To survive in 2015, they must focus on strategic planning, continuous learning, management improvement, channel maintenance, product structure optimization, and inventory management. Friendly reminder: Click the blue text above, "FMCG Distributor Professional Consulting," to learn more about marketing and distributor internal management. 2014 is flying by. At the end of each year, many distributors take stock of their busy year's gains, but to their disappointment, after deducting personnel costs, operating expenses, management fees, and other expenditures, profits are minimal. Most distributors can't help but sigh: being a distributor is hard, making money is harder, and making a fortune is even harder! We all know that in recent years, with increasingly fierce market competition, more and more distributors complain that business is getting tougher, operating costs keep rising, sales growth is harder to achieve, competition is becoming more detailed, and requirements for factors beyond the product itself are higher. Coupled with the macroeconomic slowdown, many brand manufacturers that previously used multi-tier sales models have embarked on "channel flattening" reforms, holding high the banner of "winning at the terminal," openly revolutionizing distributors to compress channel costs and strengthen control over terminals. We have seen and heard many cases where distributors, after years of hard work nurturing a "child," have it taken away by its biological parents. As regional distributors, they face pressure from manufacturers on one hand, and on the other, terminal clients are becoming more independent as their profit margins shrink, with growing calls for autonomy. Thus, distributors, once the "sowers of market sparks," now find themselves in a difficult position, squeezed from both sides. Consequently, in 2014, many distributors fell into trouble, constantly making choices and attempts. Now, distributors must face the new year. How should distributors survive in 2015? 1. **Make Strategic Plans** Most distributors emphasize tactics over strategy, viewing strategy as empty and "impractical," unable to bring immediate benefits. They tend to focus on tactical moves, such as setting simple pressure policies for second-tier distributors and terminals, or organizing flashy promotions, because these yield quick results. However, such short-term effects address the moment but not the long term. This short-sighted approach of prioritizing tactics over strategy is why most distributors feel business is getting harder and money is harder to earn. What is distributor strategy? Strategy is the direction and goal of a distributor's development, the grand blueprint of operations. Distributor strategy has clear goal orientation, foresight, comprehensiveness, and planning. The purpose of formulating strategy is to establish the distributor's position and development in the market. Therefore, the accuracy of strategy directly affects the distributor's development and destiny, and it is the primary task on the path to brand-based management. 2. **Change Mindsets, Strengthen Learning, and Keep Pace with the Market** Thinking determines the way out; different thinking leads to different paths. As market competition reaches new stages, new marketing models will inevitably emerge. Distributors need not only to keep up with the times but also with the market, continuously learning, innovating, adapting, and following trends based on market changes and demands. In today's retail market, the only constant is "change": it changes fast, and it changes in many ways. A distributor must understand the era and grasp it; only by truly seizing the pulse of the times can they avoid being left behind. As Zhuge Liang sang, "Who first awakens from the great dream? I know it myself in my lifetime!" Therefore, to survive in such an era, learning is the only way; only knowledge can change destiny, and only learning can achieve the future. Current distributors mostly transitioned from wholesalers or retail businesses, and many still operate at the level of husband-wife or family-run operations, relying excessively on historical experience and habitual methods. This exposes weaknesses in strategy, lagging management, weak brand awareness, and lack of systematic thinking, resulting in a situation of broad coverage but weak strength, with management and operations losing strategic direction. However, it is not yet time for blind pessimism. There are also many forward-thinking, aware, and innovative distributors who can seize opportunities in the volatile market, completing the leap of "building systems, expanding networks, establishing brands, and forming teams" faster than competitors, even establishing their own brand management companies and solidifying their terminal system support. Once they complete this leap, they possess strong network and competitive capital, and their carefully laid terminal networks and researched "terminal success secrets" become their "trump cards" to beat competitors and attract manufacturers, serving as the core and key to securing market capital. 3. **Strengthen Management to Improve Profitability** As market competition intensifies, requirements for distributors rise. This demands that distributors invest heavily in organizational building and management, practice internal skills, and manage strictly to seek benefits from management. For example, establish and improve various management systems, assessment systems, and reward/punishment systems; clarify job requirements, work content, and processes; strengthen the completeness of the four links: "plan, execute, check, and feedback," especially establishing an objective and effective inspection system to track execution in real time and on site, ensuring implementation is in place. That is, set standards before, control during, and summarize after, achieving standardized management that "binds people with systems." Because salespeople visit dozens of terminal stores a day, if they strictly follow the eight steps of terminal visits—pre-visit preparation, checking outdoor advertising before entering, greeting customers and filling out terminal customer cards, checking in-store product display, checking inventory, etc.—the difference in order volume and improvement compared to a cursory visit is significant. Serious visits to dozens of stores may result in higher transaction volumes, while superficial visits may lead to fewer. Thus, strengthening management is key to improving profitability. 4. **Strengthen Channel Management and Maintenance, Keeping Channels Under Control** Tapping channel potential is an important way for distributors to improve profitability. Channel potential tapping means intensive cultivation and classified management of channels, then allocating support resources based on sales volume to further release channel potential and power. Products can be seen as blood, and the distributor's sales network as the blood vessels that deliver blood throughout the body; without vessels to transmit blood, even the most important product is meaningless. For example, manage based on customer classification: first, establish distribution cooperation alliances with customers and provide appropriate rewards based on annual sales. Second, establish a return and exchange system to swap slow-moving products for customers. Third, regularly hold distributor networking events to communicate and build relationships. Fourth, strengthen work guidance and assistance to customers. Fifth, establish reserve customers and promptly replace unqualified or disloyal distributors... 5. **Optimize Product Structure** "Structure determines function, and function reflects the state of structure." Technically, structure refers to the orderly arrangement of various components of a thing. The function of anything is determined by its structure; whatever the structure, so is the function. Product structure generally refers to the arrangement of various products, and the combined effect of product structure determines the company's development. So, what does structure determine function mean? It means that once the structure changes, the function will definitely change. Distributors taking the path of streamlined products centers on the word "refined." Refined is both a requirement for "quantity" and "quality." For distributors, while reducing the number of products, they must also focus on product quality, optimize the company's product structure, increase the sales proportion of high-performing products, and strengthen the best product combination effect. Only then can they use product combinations to absorb marketing costs and ultimately secure a larger territory and living space, building a product structure suitable for their own survival and development. For example, conduct profit analysis on the products the company handles, and based on sales volume, profit margins, and brand influence, treat them differently and arrange them reasonably, determining which products are "high volume, low profit" to build the sales network and stabilize customers; which are "low volume, high profit" sunrise products; and which are "high volume, high profit" golden products. For products with large sales, low profits, and high capital occupation, appropriately control sales; for "low volume, high profit" sunrise products, make them key promotion targets; for "high volume, high profit" golden products, strictly control channel prices; and for products with small sales, low profits, and no future, resolutely eliminate them. Additionally, update the product structure appropriately each year to make it more rational and maximize benefits. 6. **Strengthen Inventory Management** Many distributors handle a wide range of categories. If inventory management lags, slow-moving products can tie up large amounts of capital while bestsellers run out of stock. Therefore, distributors should manage purchase, sales, and inventory well, and promptly grasp relevant data to avoid unnecessary losses and increase company profits. -------------------------------------------- --- ## 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