---
title: "How to Classify and Define the Many Types of Distributors?"
description: "Choosing a distributor is a required course for every marketing manager, and finding a suitable one is a coveted goal. However, in practice, distributors play both angel and devil roles, making them deeply loved and hated. The selection of distributors is often proportional to brand strength, with strong brands setting high standards and weak brands having low thresholds or no choice. This article categorizes distributors from various perspectives to help managers understand their options."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-06-16"
language: "en"
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# How to Classify and Define the Many Types of Distributors?

> Choosing a distributor is a required course for every marketing manager, and finding a suitable one is a coveted goal. However, in practice, distributors play both angel and devil roles, making them deeply loved and hated. The selection of distributors is often proportional to brand strength, with strong brands setting high standards and weak brands having low thresholds or no choice. This article categorizes distributors from various perspectives to help managers understand their options.

Choosing a distributor is a required course for every marketing manager, and finding a suitable one is a coveted goal. However, in practice, distributors play both angel and devil roles, making them deeply loved and hated.
The selection of distributors is often proportional to brand strength. Companies with strong brand power set high standards for choosing distributors, just as tall, rich, and handsome men often choose white, rich, and beautiful women. Weak brands often have low thresholds or even no choice. How to choose the ideal distributor and which type to select is one of the basic skills that test a manager's market operation ability.
There are various ways to classify distributors from different perspectives. Traditionally, we can divide them into first-tier distributors, second-tier distributors, regional agents, brand-specific agents, exclusive distributors, large distributors, small distributors, etc.
**Distributor Classification One**
1. Professional Type
Distributors in the same industry as the company are professional distributors. Their advantage is having a stable network and customer relationships, making them easy to use. Their disadvantage is that most of them are distributors of competing products.
Weak brands entering a blank market lack market support, so without strong professional distributors, business is hard to develop. If you can borrow their channels, using competitors' channels to distribute your products is a shortcut with twice the results for half the effort!
How to use professional distributors to borrow channels and use competitors' networks to achieve product distribution? Here are seven tactics for channel persuasion and distribution.
(1) **Find.** Look for target distributors and establish detailed profiles of target distributors in the area to provide a map for channel persuasion.
(2) **Analyze.** Analyze the business capabilities and characteristics of these target distributors, including capital, warehousing, transportation, personnel, social connections, specialty channels, and price levels of products they handle. Classify these customers and find target channels that match your product.
(3) **Negotiate.** Negotiations with target distributors should follow the principle of tackling the difficult first, and do not give up after one rejection. Prepare sufficient talking points before negotiations.
(4) **Tempt.** Distributors' desire for profit is innate and unlimited, but they prefer stable and safe ways to profit. Professional distributors are well aware that high price differences for new products are a beautiful trap, so salespeople who simply tempt them with price and margin prospects often fail.
Therefore, in a blank market, promotional actions should largely target the channel, not bypass it to reach consumers. The maturity of the consumer market must be preceded by channel maturity. **What makes an ideal distributor excited is perceiving information that the product is about to become popular.** For example, increased distribution in core urban outlets, establishment of image stores and streets, and strong improvement in local areas.
(5) **Strike.** Distributors' profits come from outlets, so controlling outlets is their Achilles' heel. After listing the target distributor's subordinate outlets, launch a planned attack, negotiating while striking.
(6) **Lock.** Use a reverse approach to build channels, using personalized terminal policies to implement locking policies such as stocking, display, volume commitment, and exclusivity at the terminal, thereby increasing the product's share in the distributor's sales, gradually shifting from mixed sales to main sales, exclusive sales, or even sole operation.
(7) **Exclusive.** Stabilize customer profits, ensure the price system, and ensure only one supplier per store (or area), preventing cross-delivery.
2. Non-Professional Type
Non-professional distributors are unfamiliar with the industry, commonly known as outsiders. These distributors are either rich but inexperienced, like coal mine owners switching to liquor, with strong financial resources but no knowledge of the liquor market and management; or they have little money and little knowledge, like teachers doing liquor part-time during holidays, with very limited funds.
Because these distributors are outsiders, they have a strong desire to find brands and high enthusiasm in the early stages of entrepreneurship. Finding non-professional distributors is easy and has a high probability. Once you find a "rich but inexperienced" distributor, managers often feel like they've won the lottery, because in the early stages of cooperation, the distributor's financial strength ensures no problem with shipment volume. However, after the initial burst of activity, these distributors often become disheartened because either distribution is blocked, goods don't move, sales are low, or they can't endure hardship and loneliness.
**Finding a non-professional customer is not difficult; the challenge is how to keep these distributors alive.**
**Distributor Classification Two**
1. Couple-Type
Two or three people and one or two vehicles are the typical picture of this type of distributor. The entire team is the boss and his wife, with no finance, warehouse manager, or even accounting. Couple-type distributors are best suited as second-tier distributors. If they manage to become first-tier distributors, they must undergo transformation and tempering from small to large.
In this process, the roles of the boss and his wife are often subtle. The moon-type distributor, where the wife is the main character, has a much lower probability of growing big and strong than the sun-type distributor, where the husband leads. Moon-type distributors only see "money" and are content with small profits; sun-type distributors value "the future," dare to invest, and are good at seizing opportunities, which is conducive to growth.
Couple-type customers are easy to develop in the early stages of market development, allowing multiple points to bloom and latent cultivation, but they often become bottlenecks during market launch, especially in vehicle and personnel allocation and service system support.
2. Company-Type Distributors
Company-type distributors have relatively formal management and higher fixed costs. The size of such distributors varies greatly, from annual turnover of hundreds of thousands to hundreds of millions, and their quality is mixed.
**Distributor Classification Three**
1. Direct-Sales Type Distributors
Direct-sales type distributors use salespeople to directly supply and deliver to outlets. For manufacturers, **direct-supply distributors can provide a flat channel, shorten management levels, ensure delivery service, and stabilize prices.**
**Disadvantage 1:** Focus on market, neglect sales.
Such distributors can quickly distribute goods using their direct-supply outlet relationships, generating sell-through; the disadvantage is that they are careless and picky, making it hard to achieve high-density full coverage. According to the 80/20 principle, these distributors can control the 20% small outlets that are beneficial for market cultivation, but they cannot reach the large outlets that drive volume.
**Disadvantage 2:** Focus on mid-to-high-end, neglect low-end.
For low-end products, such distributors find it hard to support because direct supply costs far exceed distribution costs, so they prefer mid-to-high-end products with larger price differences.
**Disadvantage 3:** Focus on cities, neglect rural areas.
Rural markets have scattered outlets, high delivery costs, and low product prices, making direct supply difficult. Especially for third- and fourth-tier markets, the three-level structure of county, township, and village poses an insurmountable barrier for distributors skilled in urban direct supply.
2. Distribution-Type Distributors
Distribution-type distributors achieve all sales through second-tier or even third-tier distributors.
**Advantages:** Can quickly organize second-tier distributors to distribute goods and amplify sales.
**Disadvantages:** Focus on volume over quality, old products over new, and old markets over new. Most such customers are aging, with rough management and unstable price systems; markets rise quickly but also fall quickly.
3. Direct-Distribution Type Distributors
Part of sales is achieved through direct supply by salespeople, and the rest through second- and third-tier distributors. The layout of direct and distribution is the key to managing such distributors.
Areas controlled by direct supply: core urban outlets, leading stores, and image stores.
Areas controlled by distribution: township and village outlets, urban circulation, small and medium restaurants, special channels, etc.
Direct-distribution customers should follow the principle of direct supply for market building and distribution for volume, with a balance between direct and distribution. The allocation of outlet resources should be in the hands of the manufacturer. Once there is a problem at the distribution level, the direct supply force can temporarily replace the distributor in that area.
**Distributor Classification Four**
1. Exclusive-Type Distributors
Exclusive-type distributors specialize in this product and do not handle any other brands. In terms of capital, personnel, and energy, these distributors can go all out, avoiding "collisions" during peak and off-peak seasons. The promotion and achievement of such distributors are suitable for building channel barriers in base markets, representing the highest level of distributor management.
2. Exclusive-Brand-Type Distributors
Customers operate multiple brands and categories, such as liquor, beverages, and beer, but only handle this product in the beer category. The promotion and achievement of such distributors are suitable for building channel barriers in base markets.
3. Main-Selling-Type Distributors
Customers operate multiple brands, but this product is the main one. Such distributors are suitable for channel transformation in offensive markets.
4. Mixed-Selling-Type Distributors
Customers operate multiple brands and sell this product as one of them. Newly opened distributors or new markets mostly have this type of distributor.
**Distributor Classification Five**
1. Regional-Type Distributors
Distributors that operate this product within a certain region.
Setting regional boundaries for distributors is a necessary condition for channel management; otherwise, it not only causes price cutting and cross-region selling but also leads to extensive cultivation with little harvest and wasted resources.
Many manufacturers use a checkerboard pattern to configure distributors and sub-distributors in small areas. **The advantages are focused development, clear responsibilities, fast development speed, and easy outlet service and maintenance. The disadvantages are that these distributors must be all-around, capable of handling different types of outlets.** Often, the strain on distributors becomes apparent: those good at small outlets cannot support large ones; those good at hotel channels are not good at supermarkets and stores, resulting in strong catering but weak circulation, like walking with a limp.
2. Functional-Type Distributors
Distributors with agency rights for a sub-brand or category, or for special channels. For example, professional KA hypermarket distributors, nightclub distributors, and professional night market food stall distributors.
**Functional-type distributors solve the problem of regional distributors being picky, providing professional services for specific channels or consumer segments.** However, facing complex terminal outlets, not only do you need many functional distributors, but more importantly, their delivery routes are complex and overlapping, with either duplication or gaps in coverage, **making management extremely difficult**.
There is no best distributor, only the most suitable. In different markets and at different times, the purpose of choosing distributors varies. From the classification of distributors, we see that each type has its pros and cons. **How to activate different types of distributors in different markets and at different times, and how to organize or streamline channels, is the most basic skill that tests a manager's market operation ability.**
This article is excerpted from Mr. Fang Gang's book "FMCG Veterans All Do This: Regional Manager Operation Tips."
To purchase this book, click **"Read Original"**.
If you find this article good and want to communicate with the author, please long-press the QR code below to add Mr. Fang Gang's WeChat, and reply with: **Study**.
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