Click 'Read Original' for details. Private Enterprise Internal Management Research/Pan Wenfu For a long time, cases of distributors being played by manufacturers have emerged one after another. Not only small distributors but also large, even super-large, regional dominant distributors have been played to death. Distributors being played to death or half-crippled by manufacturers mainly takes the following forms:

  1. Cancellation of distribution rights;

  2. Compression of distribution areas or segmentation of distribution channels;

  3. Unilateral cancellation or significant reduction of annual rebates;

  4. Reimbursement of advance expenses not timely, accumulating into huge arrears;

  5. Manufacturer product quality incidents implicating distributors.

So, who will harm distributors?

  1. The manufacturer's main body has problems, such as product quality issues, which harm themselves and also harm distributors;

  2. The manufacturer itself is too weak, lacking the strength to sustain innovation and follow-up. At the slightest sign of trouble, they can't hold on, unable to protect themselves, let alone take care of distributors;

  3. The manufacturer's boss, in order to go public, attract investment, bet with capital, boost sales, or improve industry status, uses the money extracted from distributors for other purposes or severely overdraws market resources;

  4. Distributors may not have suffered losses from the manufacturer, but they have certainly suffered losses from the manufacturer's sales personnel, who harm distributors for their own private interests.

One should not have the heart to harm others, but one must be wary of manufacturers. For safety's sake, some basic preventive measures are necessary.

1. Categories of major brand manufacturers Distributors still have the ability to identify counterfeit brands. However, many major brand manufacturers now launch many sub-brands, some of which are outsourced. The actual strength and market operation capability of these sub-brands are unpredictable. So when contacting new manufacturers, don't let your guard down just because it's a big brand. Make sure to clarify whether it's the main brand or a sub-brand extended from the main brand.

2. Background checks on key personnel Key personnel of the manufacturer mainly refer to those with whom you have dealings, such as the legal representative, sales director, regional manager, provincial manager, and even resident representatives. For safety, check all of them. How? Many free query software for business registration information are available. Enter the name, and you can see whether the person has registered a company, whether there have been legal lawsuits, etc. If you find that the manufacturer's regional manager has just registered a trading company in your area, you need to be careful. Or if the manufacturer's senior management is involved in economic lawsuits that are not yet concluded, then you should be cautious about advance expenses.

3. It is very necessary to visit the factory on site for new manufacturers. Don't just look at brochures or PS images on the website.

4. The proportion of a single manufacturer's products in your total product sales should be controlled at most below 30%. If more than 50% of your business is tied to one manufacturer, it is extremely dangerous.

5. Be sure to obtain the manufacturer's headquarters contact list. Ask the manufacturer's salesperson for it. If they hesitate and refuse, they probably have a guilty conscience.

6. Learn to proactively maintain communication with multiple levels of the manufacturer. The simplest form is to make monthly or quarterly market plans and summary reports in written form, and send a copy to the local business manager, provincial manager, regional manager, marketing director, and the manufacturer's boss. But be careful: only report market plans and actual implementation, and offer reasonable suggestions. Never complain or ask for investment in these reports.

7. Work with the manufacturer to create a five-year overall market development plan. The cost is extremely low, and the benefits are excellent. If the manufacturer is not interested or does not respond, be careful.

8. Establish separate distributor groups for each manufacturer. Whether it's a WeChat group or a QQ group, join existing ones or proactively create new ones. Then try to pull in as many distributors of the same manufacturer as possible. Ensure that for each manufacturer, you establish a corresponding distributor group. Of course, whether the manufacturer's sales personnel are willing to join is up to them. The purpose of building groups is to stay informed in a timely manner and also to show the manufacturer your group influence ability from the side.

9. Proactively show the manufacturer your local social relationships and accumulation of related resources. If necessary, prove it through one or two events, so that the manufacturer's people can see it. If they have ulterior motives in future cooperation, at least locally, there are ways to deal with you.

Author: Pan Wenfu Born into a private business owner family, he managed a family distribution company for many years, during which he also served as a business manager and trainer in several production enterprises. His research focuses on the internal management of small and medium-sized private enterprises, with main topics including personnel management, cost control, management backend construction, and the integration of retired military personnel into private enterprises. He has continuously broken down over 400 topics related to internal management of private enterprises and maintains the collection of materials and updates of solutions. -END-