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In marketing activities, the relationship between manufacturers and distributors is always in a state of "long-term division leads to unity, long-term unity leads to division." There is no eternal feast, only common interests.

As we bid farewell to the old and welcome the new, while summarizing the gains and losses of the past year's marketing work, it is more important to identify problems, solve them, and plan for the new year, strategizing the market. Therefore, in the refrigerator market dominated by traditional channels, adjusting regional distributors is an important task that most manufacturers and distributors have faced or will soon face. It is an imperative marketing task, and its smooth execution directly affects whether the 2005 annual marketing plan can be implemented effectively, and whether the brand's local market performance will rise or fall. This article will elaborate on the adjustment of regional distributors in the home appliance industry.

◆ Common Psychological Barriers to Adjusting Regional Distributors

All marketing personnel facing regional distributor adjustments will experience the following barriers to varying degrees. Indeed, adjusting regional distributors is no small matter, especially for those with large territories. It is not easy to adjust them, so most of us have the following barriers to some extent:

  1. Being constrained by personal relationships with the original regional distributor, unable to act decisively;
  2. Inability to be impartial, being controlled by the original distributor;
  3. Fear of taking responsibility, worrying about performance decline due to the adjustment;
  4. Preferring to avoid trouble, being complacent, and not pursuing maximum sales in the regional market.

◆ Preparations for Adjusting Regional Distributors

"Forewarned is forearmed." The adjustment of regional distributors must involve the following meticulous preparations:

  1. Adjusting and stabilizing the sales team is the primary prerequisite. Strictly avoid simultaneous changes in the regional distributor and the sales team within the adjusted area. Before adjusting the regional distributor, the sales personnel to be adjusted should be in place, with a lead time of 3-4 months.
  2. Focus on terminals, fully listen to the opinions of sub-distributors, and firmly control terminal resources in our hands. "Whoever controls the terminals has the say and controls the market," to prevent sub-distributors and regional distributors from collectively abandoning the brand.
  3. Identify new customers. Before the adjustment, communicate seriously with the new regional distributor, increase understanding through surveys of sub-distributors, and analyze the distributor's financial situation, market operation capability, personnel, and management based on the performance of brands they already represent at the terminals.
  4. Closely track the original regional distributor's inventory, strictly control its stock levels to avoid slow-moving products, and ascertain the wholesale prices and related costs of each sub-distributor.
  5. Strictly control the timing and speed of new product launches. Stop supplying new products to the area being adjusted to ensure the new regional distributor has products to sell. This is because the terminated distributor may retaliate by disrupting market prices and dumping all products, which would affect the new distributor's takeover and even lead to a long period without profit.
  6. Delay the fulfillment of the original regional distributor's policies. By delaying (not canceling) policy fulfillment, ensure a smooth transition between old and new distributors.
  7. Fully consider the handling of the original distributor's inventory and policy discounts. When signing the contract with the new distributor, specify that the new distributor will take over the original distributor's healthy inventory to avoid market disruption and unnecessary economic losses to the original distributor. All products should be transferred at net price.
  8. Fully report to company leaders and obtain headquarters support, and communicate thoroughly with relevant branch office personnel to reach a consensus.
  9. Maintain confidentiality before the adjustment to avoid affecting the market, preventing the original distributor from setting obstacles and causing unnecessary trouble.

◆ Process Control in Adjusting Regional Distributors

With meticulous preparations, the adjustment is already half successful. The final success depends on controlling the adjustment process:

  1. Treat the intensity of adjustment differently. For a regional distributor covering more than 50% of the office's territory, due to the large proportion of tasks and high inventory, we must compress in steps. For example, first reduce their territory by 50%, then after half a year or a year, compress further. If they are truly incapable, eventually revoke their qualification. For distributors with smaller territories, adjust in one step.
  2. Choose the best timing. Conventionally, adjustments are made at year-end, but year-end often coincides with the peak seasons of New Year and Spring Festival. Adjusting during the peak season will inevitably affect terminal distribution. The best timing is after the peak season, during the off-season, such as early November or March.
  3. Shorten the adjustment process as much as possible. Once all preparations are ready, the time from informing the original distributor to the new distributor's takeover should be minimized. The new distributor should visit all sub-distributors as quickly as possible.
  4. Protect the interests of the original distributor. Although it is difficult to "govern by virtue," we should at least be "honest and trustworthy." For distributors who contributed to the brand's market development, even if their business philosophy has fallen behind or their marketing capabilities have weakened, we should still treat them well and minimize losses caused by the adjustment.
  5. Fully coordinate the handover between old and new customers to avoid leftover issues. The factory, old distributor, and new distributor should jointly visit all outlets to confirm inventory and costs.
  6. During the adjustment, the new customer and all office personnel must not disparage the original distributor, and the original distributor should also be told not to spread rumors.
  7. Fulfill the original distributor's policies in stages, and handle problematic machines and leftover costs.

In summary, adjusting regional distributors is a common task in business operations. There are many strategies and details to consider, and opinions vary. I hope this article can help marketing colleagues who are about to adjust regional distributors.