---
title: "How Should Distributors Survive in 2020?"
description: "A review of 2019 shows that the phrase 'I'm so difficult/south' topped the list of China's top ten media buzzwords, reflecting widespread anxiety and helplessness. For distributors, the year was marked by thin profits or losses, prompting a need to optimize terminal outlets, product structures, and personnel to thrive in 2020."
author: "师顺宽"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-01-01"
categories: "Dealer Operations"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2020-066406ad.md"
original_source: "https://mp.weixin.qq.com/s/7myhusP_8ryi4pKCHMrU1A"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2020-066406ad/"
citation: "师顺宽. “How Should Distributors Survive in 2020?.” New Distribution, 2020-01-01. https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2020-066406ad/"
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---

# How Should Distributors Survive in 2020?

> A review of 2019 shows that the phrase 'I'm so difficult/south' topped the list of China's top ten media buzzwords, reflecting widespread anxiety and helplessness. For distributors, the year was marked by thin profits or losses, prompting a need to optimize terminal outlets, product structures, and personnel to thrive in 2020.

Reviewing 2019, the National Language Resources Monitoring and Research Center, along with People's Daily Online, Tencent, and other mainstream media, released the "Top Ten Chinese Media Buzzwords of 2019": I'm so difficult/south, work 996, off work ICU, pursue cherry freedom... Among them, "I'm so difficult/south" should rank first.
"I'm so south" is a homophone of "I'm so difficult," used to express frustration and loss when encountering setbacks. Both expressions are widely used. The popularity of "I'm so difficult/south" reflects many people's anxiety and helplessness about life's difficulties, while also serving as a "pressure release valve," providing an emotional outlet for those in tough situations.
2019 is about to fly by. At the end of each year, many distributors take stock of their year's harvest, but many are frustrated and disappointed: after deducting personnel costs, operating expenses, management fees, and other expenditures, profits are minimal or even losses. Most distributors can't help but sigh: "I'm really too difficult/south." Being a distributor is hard, making money is harder, and making a fortune is even harder!
**Next, let's review why the vast majority of distributors have minimal profits or even losses.**
May I ask all distributor friends, how many retail terminals do you have?
How many retail terminals are profitable, and how much does each terminal earn?
How many retail terminals are losing money, and how much does each terminal lose?
It is estimated that the vast majority of distributors find it difficult to answer this question.
Let's take a detailed inventory, and perhaps many distributors will suddenly see the light.
If you adopt a mobile sales method, what is the cost per visit to a terminal outlet?
**Most distributors' distribution costs:**
1+2 standard configuration: salesperson, driver wages and commissions; fuel; vehicle maintenance costs and depreciation, etc.
Total cost: approximately 400 yuan/day.
Each vehicle visits about 15-20 outlets per day, so the cost per terminal outlet per visit is 26.67-20 yuan/visit.
What is your terminal outlet visit cycle? Based on a 7-10 day cycle, each terminal outlet needs 54-36 visits per year. The annual maintenance cost per terminal outlet is approximately 800-1,500 yuan.
If the distributor has a sales ledger for each terminal outlet, combined with the gross profit of the products they represent and their visit cycle, they can know: how many terminal outlets are profitable, how much each earns; how many are losing money, and how much each loses.
**Note:** Each of the above costs is approximate; different distributors need to calculate based on their specific circumstances, such as some using visit sales, or dividing customers into different visit cycles by type.
**How much loss does a large supermarket lacking effective maintenance cause you daily?**
Annual costs for one large supermarket (each item is approximate; costs vary by brand and supermarket, so calculate based on your specific situation):
Entry fee: at least 15,000 yuan per store;
Barcode fee: 100-1,000 yuan per SKU, at 500 yuan per SKU, for 10 products, cost is 5,000 yuan;
Display fee: 2,000 yuan per month, at least 24,000 yuan per year;
Festival fees: (Spring Festival, May Day, Mid-Autumn, National Day, store anniversary) at least 3,000 yuan each time, total 15,000 yuan;
Sponsorship fees: new store openings, old store renovations, shrinkage, TM promotions, visual merchandising, etc., at least 10,000 yuan per year;
Total of the above: 69,000 yuan.
**Personnel wages:**
Promoter wages; promoter management fees; salesperson wages; supervisor fees; backend support systems;
Each large supermarket must share vehicle delivery costs, and each salesperson, promoter, and promotion supervisor must share administrative office expenses, warehouse management costs...;
Daily direct costs = large supermarket fees + personnel wages + backend support system costs, estimated at no less than 500 yuan.
**Note:** Each of the above costs is approximate; costs vary by brand and supermarket, so calculate based on your specific situation.
Based on years of research on distributors and surveys on profit contributions of retail terminals:
**About 80% of a distributor's profits are created by about 23% of high-quality terminals!**
**About 80% of a distributor's losses are caused by about 36% of poor-quality terminals!**
**The remaining 41% of terminals are break-even or marginally profitable!**
**Note:** The above data may not apply to distributors representing small miscellaneous brands or even pseudo-demand products.
2019 passed in a hurry. For most distributors, all the "too difficult/south" basically stems from not making money; all struggles are basically aimed at making money.
**In the upcoming 2020, how should distributors survive?**
**-01- Optimize Terminal Outlets**
High-quality terminals create profits; whoever controls high-quality terminals gains the advantage for sustained earnings;
Poor-quality terminals create losses; whoever is pushed to poor-quality terminals will exit the market;
Distributors should establish a "terminal profit contribution" analysis and maintenance system to guide terminal outlet development and network optimization, improving the profitability of terminal outlets.
**The key to optimizing terminal outlets is: control high-quality stores; tap potential stores; solve problem stores; cut poor-quality stores.**
**The purpose of optimizing terminal outlets is: insist on adding one high-quality outlet per week; insist on reducing one poor-quality outlet per week, thereby improving the profitability of each "single store," and thus achieving overall company profit growth!**
**-02- Optimize Product Structure**
During the industry's high-growth period, every distributor's profit mechanism was roughly the same, meaning that product quality varied, and it didn't matter if some products made money and others lost, as long as the final total was profitable.
But now the idea of "when one side is dark, the other is bright" will inevitably lead the company into overall losses. To solve the loss problem, products that should be cut must be cut, and at the same time, ensure company profitability by adjusting the product structure. More importantly, persist in this approach, ensuring that every product is a cash cow. Therefore, "**every product is a cash cow**" must be adopted as the company's operating philosophy.
**-03- Optimize Personnel Structure**
Nowadays, in any company, employees are divided into two categories: "**those who support others**" and "**those who are supported**."
"Those who support others" strengthen the daily management and optimization of terminal outlets through their own efforts, ensuring that display images, promotional resources, and distribution items are in place, and also assist terminal outlets in selling products to consumers, continuously increasing company profits.
Those "who are supported" merely go through the motions, meaning their work contributes nothing to profit growth. Not creating profit is equivalent to squeezing company profits. For such people, either transform them into profit creators or quickly dismiss them.
**Optimize existing resources, optimize incremental resources, and increase profit, profit margin, and profit growth rate. This is the path distributors must take in 2020.**
**To achieve the above, distributors must step out of their offices and immerse themselves in actual business. If they stay confined to their small rooms, too far from the "work site atmosphere," they will lose inspiration, miss opportunities, and head toward failure.**
Finally, I wish all distributor friends a prosperous 2020 through their own hard work and big money!
Tips will be paid 400-2000 yuan once adopted.


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## Citation metadata

- Publisher: New Distribution
- Author: 师顺宽
- Published: 2020-01-01
- Canonical: https://xinjignxiao.com/en/articles/how-should-distributors-survive-in-2020-066406ad/
- Original source: https://mp.weixin.qq.com/s/7myhusP_8ryi4pKCHMrU1A

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