---
title: "How Weak Distributors Can Solve the Market Dumping Problem"
description: "When discussing dumping, we must first analyze its nature. Current market dumping behaviors can be simply categorized into three types: intentional vicious dumping, intentional benign dumping, and unintentional natural dumping. For weak distributors facing dumping from larger distributors, hard confrontation is not feasible, and manufacturers often ignore the issue. Therefore, weak distributors need to adopt strategies such as collecting evidence, using social relations, and preventive measures to resolve the problem peacefully and effectively."
author: "朱志明"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-07-22"
language: "en"
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---

# How Weak Distributors Can Solve the Market Dumping Problem

> When discussing dumping, we must first analyze its nature. Current market dumping behaviors can be simply categorized into three types: intentional vicious dumping, intentional benign dumping, and unintentional natural dumping. For weak distributors facing dumping from larger distributors, hard confrontation is not feasible, and manufacturers often ignore the issue. Therefore, weak distributors need to adopt strategies such as collecting evidence, using social relations, and preventive measures to resolve the problem peacefully and effectively.

When discussing dumping, we must first analyze its nature. Current market dumping behaviors can be simply categorized into the following three types.

1. Intentional Vicious Dumping
This type of dumping is often the behavior of regional salespeople or distributors who deliberately dump products into markets outside their designated areas to expand their own sales and profits. They often sell at prices lower than the manufacturer's specified price to non-jurisdictional areas. Vicious dumping causes great harm to both the enterprise and distributors in other regions. It disrupts the market price system, significantly reduces channel profits, dampens the enthusiasm of distributors in the dumped areas, and throws the originally stable market system, painstakingly built by the enterprise or distributors, into chaos. This intentional vicious dumping must be resolutely eliminated by both enterprises and distributors.

2. Intentional Benign Dumping
This type of dumping often occurs when an enterprise is developing a new market or activating a half-developed market. It deliberately selects distributors in markets with strong circulation to let their products flow into blank or half-developed markets, thereby activating those markets.
This behavior is allowed under certain circumstances, but a limit must be maintained. That is, once the product shows signs of improvement in that market, immediate integration and adjustment must be carried out; otherwise, as market potential bursts, it may lead to a fierce battle.

3. Unintentional Natural Dumping
This type of dumping refers to situations where distributors, without awareness or detection, allow their products to flow into markets outside their jurisdiction. The likely consequence is that, unknowingly, the market rules of the dumped area are disrupted, affecting the enthusiasm and confidence of customers in that area. In severe cases, it can escalate into vicious dumping between distributors. Once discovered, both parties should quickly negotiate and resolve the issue peacefully, avoiding impulsive actions to prevent unintentional natural dumping from evolving into intentional vicious dumping, which would affect normal sales in both markets.

For weak distributors facing dumping from large distributors into their markets, whether it is intentional vicious dumping or unintentional natural dumping, they often have to swallow their grievances, feeling helpless. Because if they fight head-on, they lack the strength and may even lose their market, suffering even greater losses. If they seek help from the manufacturer, the manufacturer often does not take the issue seriously due to the distributor's small size, limited sales, and poor market performance. They may either let it go or make superficial gestures, promising to solve the problem but actually doing nothing—"all thunder, no rain."

In this situation, what good strategies can weak distributors use to solve the problem?

Here, let's look at a case.

Manager Li from City X was a small distributor of a liquor brand from Wuxi, Jiangsu. In 2005, while steadily operating his market, he suddenly discovered that products of Brand Y from a neighboring market had flowed into his "territory" without his knowledge. Manager Li was a negligible distributor for Brand Y, and he knew this well. In this era where the words of the insignificant carry little weight, he needed to find his own way to solve the market dumping problem.

Through investigation, Manager Li learned that the dumped products came from the neighboring Market A. Market A had been operating for many years with relatively mature channels, and its agent, Boss Wang, was a very loyal and exceptionally open-minded person. Why did dumping occur this time? Was it malicious, unintentional, or natural circulation? Through his salesperson, Manager Li learned that Market A was under great sales pressure. With market growth potential nearly exhausted, they might be trying to expand outward to relieve sales pressure. So, how should he handle this? Should he directly complain to the manufacturer? Or solve it himself? If he complained to the manufacturer, would his problem be solved? He knew his position with the manufacturer well. After much deliberation, Manager Li decided to take the initiative and resolve the dispute through his own methods.

So, one evening, Manager Li called Boss Wang. Besides the usual pleasantries, Manager Li praised Boss Wang highly and sincerely expressed his desire to learn from him, hoping to visit him the next day. He did not mention the dumping issue at all. Flattered by Manager Li's compliments, Boss Wang agreed to meet and exchange ideas. The next day, accompanied by the local business manager, Manager Li drove to City A. Upon arrival, he chose a coffee shop near Boss Wang's location, then called to invite him. Boss Wang was very straightforward and arrived promptly. After meeting, they first talked about the rapid development of City A in recent years, then moved on to Boss Wang's history of operating Brand Y home appliances. Boss Wang spoke eloquently, recounting his experiences as if counting family treasures. Manager Li benefited greatly, nodding and taking notes, which gave Boss Wang a sense of achievement.

When it was time for a meal, Manager Li warmly invited Boss Wang to have a meal. They each had a sizzling steak and a "depth charge" (cocktail). As the alcohol took effect, Manager Li opened his heart and talked about the difficulties of operating the X market. Seeing this, Boss Wang patted his chest and asked if there was anything he could help with. Manager Li then poured out his troubles, saying that perhaps because Market A was well-operated, some products had flowed into City X, causing chaos in the price order there. He hoped Boss Wang could help coordinate the matter. Boss Wang immediately stated that he would investigate upon returning and that this situation would not happen again. He also asked the manufacturer's business manager to witness that if dumping occurred again, he would willingly accept punishment. Finally, in a friendly atmosphere, they shook hands and parted. Afterward, Brand Y products from Market A no longer appeared in Market X. By using a strategy of retreating to advance, Manager Li learned from the other's experience, respected the other party, and successfully resolved the dumping problem. This shows that using "peaceful" means and adopting a roundabout tactic is also an effective measure to solve market dumping.

In Sun Tzu's Art of War, "The Attack by Stratagem" chapter says: "To subdue the enemy without fighting is the supreme excellence. Thus, the highest form of warfare is to attack with strategy, the next is to attack with diplomacy, the next is to attack with force, and the lowest is to attack a city." This means that before two armies engage, one should first rely on strategic planning, including the comprehensive use of political, economic, cultural, and diplomatic means, to resolve the dispute before conflicts escalate. This is the best policy; attacking with force or besieging cities are the last resorts.

In this case, we see that Manager Li used strategies of "attack with strategy" and "attack with diplomacy" to solve the dumping problem. He seized on the human weakness of liking to be respected and flattered, adopted a retreat-to-advance approach, took the initiative to negotiate, respected the other party, and sought to learn from them. This "attack with strategy" psychological tactic, combined with the "attack with diplomacy" social strategy of discussing issues over drinks, won the other's heart, made them friends, and successfully resolved the actual dumping problem, avoiding the mutual destruction that would result from attacking with force or besieging cities.

For weak distributors, the biggest fear is market dumping. They have worked hard to build their market, but before they can reap the rewards, someone else interferes and messes up the market, making it impossible for them to survive. So, how can weak distributors break the deadlock? How can the weak defeat the strong?

1. Collect Evidence, Leverage Strength
A weak distributor who is dumped on should first collect evidence against the dumping party, report it to the manufacturer, and use the manufacturer's power to reclaim their territory and protect their interests.
- Collect evidence: Gather specific customer information for receiving goods and shipping customers, such as taking photos, collecting shipping orders, price lists, etc.
- Collect the model, production date, packaging, and quantity of the dumped products.
- Catch the other party's salespeople and goods red-handed.
After collecting the above evidence, compare it with the contract terms, seek a solution from the manufacturer, and use it as a basis for negotiation. If the manufacturer does not have a good solution to prevent dumping, you can request promotional support or start retaliating against the dumping area.

2. Be Polite First, Then Fight Back
- Treat with courtesy, retreat to advance: After collecting evidence, visit the dumping distributor, communicate peacefully, learn from them, appeal to emotions and reason, and make friends, just like Manager Li did with Boss Wang.
- Show determination and warn: You can gently tell the dumping party that dumping is destructive to both sides, and that you can easily dump low-priced products into their area, using the same method to impact their important markets with destructive dumping.
- If all else fails, fight back: If the distributor continues their behavior after friendly talks, and the manufacturer turns a blind eye, then it's time to say "enough is enough." Target their core market and fight back fiercely. In a narrow path, the brave wins. (However, at this point, continuing to distribute products from such an irresponsible manufacturer is meaningless.)

3. Strengthen Customer Relations, Punish Malignant Tumors
- Communicate with downstream outlets that receive goods across regions, make them understand your situation, exchange ideas, understand their thoughts, and prescribe the right remedy so they feel embarrassed to continue such behavior.
- Strengthen customer relations with downstream outlets, improve service efficiency, strictly implement the manufacturer's price and promotion policies, do not arbitrarily raise sales prices, and establish a united market front against external threats.
- For those downstream outlets that "refuse a toast only to be forced to drink a forfeit," clearly tell them what measures you will take, threatening them to stop cross-regional purchasing.

4. Use Relationships to Protect Yourself
- If downstream customers pick up goods across regions themselves, distributors can use their local social resources, such as finding friends in the local industry and commerce or quality inspection departments, to cause trouble for cross-regional purchasing customers under the pretext of product inspection. Ask them to provide relevant business procedures, including legal representative authorization documents. If they cannot provide them, you can detain the goods. You can also find reasons such as incomplete procedures or damaged packaging to penalize them, preventing them from selling the dumped goods.
- If goods are shipped via logistics companies, you can also use social connections to intercept the goods. If the dumping distributor delivers goods proactively, once discovered, use social connections to stop the vehicle and detain the people.
Although these actions are last resorts, they are effective measures against vicious dumping customers when there is no other choice.

5. Prepare in Advance, Prevention First
For weak distributors, the dumping problem must be addressed with preventive thinking. Whether signing contracts with manufacturers or downstream outlets, to ensure the manufacturer protects your market interests and to ensure downstream outlets do not purchase across regions or dump, you should require that the prevention and management of dumping be included as an important clause in the contract. This way, when dumping occurs, rights and responsibilities are clear, and there is a basis for action. You can even require compensation from the manufacturer or penalties for downstream outlets, forcing them to strictly control dumping behavior.

In summary, as a weak distributor facing cross-regional dumping, you must combine your own situation and market conditions. Whether you resolve it privately, with the manufacturer's help, or by leveraging social relationships, you must grasp the scale, be both reasonable and flexible, and thus navigate the dumping and anti-dumping contest with ease, achieving the most satisfactory resolution.

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