The ultimate goal of channel reform is to reduce costs and improve efficiency, which can be achieved by reducing distribution links, centralized purchasing and distribution, centralized product shipment, and faster inventory and capital turnover. Based on the current situation and problems, it is imperative to effectively integrate distribution channel resources and innovate distribution channels in response to market changes. First, diversify distribution channel models. The diversification of distribution channels refers to, first, the diversification of enterprise channel models, which not only spreads risks but also increases product market share; second, the diversification of the product structure distributed, that is, distributing multiple related products within the same channel to improve channel utilization efficiency, thus requiring the integration of distribution channels. Second, flatten the distribution channel structure and shift focus downward. Flattening mainly involves minimizing distribution channel links to facilitate more direct, faster, and more accurate communication between manufacturers and consumers, and helps manufacturers control distribution channels, reduce conflicts and instability, lower costs, improve channel operational efficiency, and gain competitive advantage and channel profit space. Shifting focus downward includes moving from dealers to retail terminals and from large cities to regional and county-level markets, enabling manufacturers to communicate and monitor the market more effectively and gain market initiative. Finally, informatize distribution channels, that is, integrating the invisible internet into the tangible channel network. A distribution channel network built on the internet can better meet the demands of personalization, interactivity, and high speed in the new economic era. (2) Strengthen effective management of dealers

  1. Selection and evaluation When selecting dealers, it is necessary to extensively collect information on their reputation, market experience, product knowledge, willingness to cooperate, market coverage, and service level, and establish criteria for review and comparison. The criteria for comparison are: the dealer's marketing philosophy and willingness to cooperate, market coverage, reputation; historical experience; product portfolio, financial condition, promotional capabilities, and management ability of their sales staff.
  2. Communication Communication is a very important condition for ensuring smooth channels. Therefore, how to promote mutual understanding, trust, and even close cooperation among channel members is an important aspect of distribution channel management. Communication can be divided into two forms: information communication and interpersonal communication. (1) Information communication. Timely and useful information is the foundation of business success. Therefore, enterprises must establish relevant information communication mechanisms to promptly convey consumer information, product information, price information, technical information, environmental information, competitor information, and other information of interest to channel members. To this end, enterprises must establish an effective distribution channel information system to achieve information sharing within the channel. (2) Interpersonal communication. In actual business operations, manufacturers often feel dissatisfied with dealers because they view problems from their own perspective. If we change our perspective and stand in the dealer's shoes, problems may not occur. For manufacturers, we must understand that dealers are independent operators, not employees of the enterprise. They have their own business goals and policies, care about the sales of all products, and do not focus only on one product. They are first purchasing agents for consumers, and then sales agents for the enterprise. Unless there are substantial material rewards, dealers generally do not keep sales records for manufacturers. Understanding these characteristics of dealers allows channel members to understand and cooperate with each other, keeping the channel smooth.
  3. Motivation Regularly motivating dealers can increase their enthusiasm. Motivation for dealers can be divided into direct and indirect motivation. Direct motivation includes strict rebate policies, price discounts, and promotional activities; indirect motivation includes training dealers and providing marketing support to dealers.
  4. Constraints (1) Manage inventory and sales well, that is, conduct a detailed statistical compilation of dealers' sales figures, growth rates, and sales targets to assess their business capabilities and serve as a basis for reward and punishment policies. (2) Manage down to the second-tier and below. We can track sales records to the second-tier, third-tier, retail terminals, and even consumers. The deeper the tracking, the more helpful it is for managing dealers and facilitating experience summarization. (3) Strengthen effective control of channels
  5. Establish an integrated marketing channel An integrated vertical marketing channel is a unified entity formed by manufacturers and dealers (including wholesalers and retailers) that acts in unison, leveraging scale advantages to enhance bargaining power, reduce duplication and waste in certain links, and eliminate losses caused by channel members pursuing their own interests. Given that many conflicts arise from the relatively loose cooperative relationship between dealers and manufacturers, and each channel member is an independent economic entity pursuing profit maximization, leading to internal friction, strengthening cooperation between the two and forming a close relationship with shared interests helps eliminate channel internal friction. In consumer goods sales in developed countries, this marketing system has become the mainstream distribution form, accounting for 70%-80% of the total market. Currently, this form of cooperation is not yet common in China.
  6. Strengthen brand building capabilities of manufacturers When the balance of power between the manufacturing and sales sectors shifts, and manufacturers' brand building capabilities decline, making them increasingly controlled by dealers, manufacturers must strengthen brand building to enhance the premium value their products can provide to customers if they want to regain control over dealers as in the era of shortage economy. Undoubtedly, market competition has now surpassed the low-level competition of homogeneity and low prices, focusing instead on brand competition. In most commodity markets today, enterprises that dominate the relationship with dealers are those with strong brands, and their brand power gives them monopoly advantages.
  7. Build long-term cooperative relationships Building long-term cooperative relationships is a way to motivate distributors and also a method to eliminate channel conflicts. Smart manufacturers realize that they rely on dealer support in many aspects such as market development, market coverage, customer acquisition, product inventory, and customer service, and are therefore willing to establish long-term cooperative relationships with dealers. The highest form of this relationship is distribution planning. Distribution planning refers to establishing a planned, professional management vertical marketing system that integrates the needs of manufacturers and dealers. The manufacturer sets up a special department under the marketing department, namely the distribution relationship planning office, whose main work is to identify dealer needs, designate transaction plans and other programs to help dealers operate in the most appropriate way. This department cooperates with dealers to decide transaction goals, inventory levels, product display plans, sales training requirements, advertising and promotion plans. Its purpose is to change dealers' perception that they make money because they stand on the same side as buyers to the perception that they make money because they stand on the same side as the manufacturer.
  8. Establish a strategic alliance for production and sales A strategic alliance for production and sales refers to a risk-benefit community formed between the production side and the sales side (i.e., manufacturers and dealers) through agreements, considering the long-term perspective of the enterprise. According to agreed distribution strategies and game rules, they jointly develop markets, share market responsibilities and risks, jointly manage and regulate sales behavior, and share sales profits. Strategic alliances for production and sales can be divided into membership systems, alliance-type sales agency and manufacturing contracting systems, and joint venture, cooperation, mutual shareholding, and joint operation commune forms based on their closeness. Strategic alliances for production and sales belong to the category of relationship marketing, and their biggest feature is that participating enterprises have common strategic goals. When the channel faces external threats, channel members cooperate closely to achieve their common goals, such as market share, high-quality service, and customer satisfaction. Close cooperation can overcome threats, which also makes channel members understand that only through close cooperation can they pursue the ultimate common goal value.
  9. Strengthen effective channel control Channel control in product marketing is an important part of building a distribution channel system. It can solve difficulties such as poor channel flow and excessive sales expenses in the early stages of product launch, as well as deficiencies in market network construction for products requiring intensive distribution. In addition, it can also play a pre-control role for conflicts in the distribution channel. Therefore, distribution channel control plays an important role in product sales. What aspects should channel control cover?
  10. Channel length control. Minimize intermediate links as much as possible, and adopt direct sales if necessary, to reduce the time and cost of products in circulation and improve channel efficiency.
  11. Cost control. Conduct cost-benefit analysis of channels, minimize channel expenses as much as possible, and improve the economic benefits of channels.
  12. Personnel control. Regardless of the channel used, certain requirements must be placed on the quality of sales personnel. Recruitment, training, assessment, motivation, and supervision of sales personnel are all main contents of channel control.
  13. Regional control. Many enterprises take a laissez-faire attitude towards regional control when selecting distribution channels. Some do not make clear provisions in distribution agreements, and some have clear provisions but insufficient enforcement, leading to cross-regional sales by dealers and channel conflicts. If these problems are not handled promptly, they can lead to a lax dealer team, reduced cooperation with the enterprise, and an extremely unstable sales network. Regional control requires selected dealers to strictly abide by distribution terms and promptly handle cross-regional distribution phenomena.
  14. Price control. To compete for the market, dealers often adopt low-price competition. This vicious competition characterized by low prices can severely damage dealers' strength and eventually drive them out of their original business. Therefore, supplier monitoring of prices is one of the main contents of channel control.
  15. Logistics control. With the increase in product sales, smooth logistics turnover is a main content of channel control. Enterprises must first consider product transportation issues and be good at utilizing transportation companies' logistics networks to save costs. Secondly, consider the setting up of transit warehouses; cooperating with dealers to establish transit warehouses is a good method. Finally, consider product distribution centers; a sound information management system is key to distribution centers. Reply with the following keywords to classify and query relevant professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Dealer Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Slowdown, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Orders, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Investment Promotion, New Media, Dealer Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Inventory Pressure, Holidays, Dealer Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Work Report.