---
title: "In the Next Five Years, Distributors Will Have Only One Lifeline: 'Extreme Efficiency'"
description: "In the past two years, New Distribution has heard the most common refrain in market visits: business has become difficult. Both brand owners and distributors feel the same, even if they maintain or slightly grow. Facing this sustained downturn, many distributors are lost, wondering if their product selection is wrong, if they should wait for the next trend, or if the market will recover after this period. The problem is often not a lack of effort, but that the old map in hand fails in the new world. Past experience gradually becomes a burden; the more skilled, the easier it is to misapply effort."
author: "Asher"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-02-11"
categories: "Dealer Operations, Industry Trends"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/xDClhraZdWYVyFDCeg5pcg"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/in-the-next-five-years-distributors-will-have-only-one-lifeline-extreme-30220e62/"
citation: "Asher. “In the Next Five Years, Distributors Will Have Only One Lifeline: 'Extreme Efficiency'.” New Distribution, 2026-02-11. https://xinjignxiao.com/en/articles/in-the-next-five-years-distributors-will-have-only-one-lifeline-extreme-30220e62/"
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---

# In the Next Five Years, Distributors Will Have Only One Lifeline: 'Extreme Efficiency'

> In the past two years, New Distribution has heard the most common refrain in market visits: business has become difficult. Both brand owners and distributors feel the same, even if they maintain or slightly grow. Facing this sustained downturn, many distributors are lost, wondering if their product selection is wrong, if they should wait for the next trend, or if the market will recover after this period. The problem is often not a lack of effort, but that the old map in hand fails in the new world. Past experience gradually becomes a burden; the more skilled, the easier it is to misapply effort.

In the past two years, New Distribution has heard the most common refrain in market visits: business has become difficult.
Whether brand owners or distributors, everyone's feeling is strikingly consistent, even if they can maintain or even slightly grow.
Facing this sustained downturn, many distributors are lost, wondering: Is my product selection wrong? Should I wait for the next trend? Will the market recover after this period?
The problem is often not a lack of effort, but that the old map in hand fails in the new world. Past experience gradually becomes a burden; the more skilled, the easier it is to misapply effort.
Recently, I visited Mr. Zou Wenbiao, President and Co-founder of Zhoupu Data (known in the industry as President Zou). As an industry observer serving over 40,000 distributors nationwide and accumulating massive transaction data, President Zou has a clearer and more thorough judgment of the current market.
New Distribution Editor-in-Chief Zhou Qun (left) and Zhoupu Data Co-founder Zou Wenbiao (right)
In nearly two hours of in-depth exchange, President Zou's judgment was like laying the industry's cards on the table—not necessarily pleasant, but closer to the truth.
In his view, the difficulty everyone feels today is essentially because the protected state of the past has ended.
In the past, brand owners had dividends and the market had growth. Even if distributors were less capable, as long as they followed brand owners, even doing the simplest搬运 work, brand owners would support them. But now, that support has been pulled away.
In such a market norm, how should distributors survive?
**Dispel Illusions: This Is Not a Cycle, but a Long Decline**
In the past few years, facing declining business, many distributors have used cycles to comfort themselves. If they endure this difficult period, wait for policy stimulus, and wait for consumption to recover, life will return to how it was.
"Don't fantasize that this is a cyclical adjustment; this is a long-term, slow downward curve," President Zou said in the interview, delivering a heavy blow to such optimism.
Why does he say this?
Because the underlying logic supporting FMCG market growth—demographic structure—has undergone irreversible changes.
Ten years ago, China's annual birth number was around 20 million; the latest data shows births have fallen below 8 million, only a little over 7 million.
In this macro context, there will be no very large rebound. This slow downward curve may not be three or five years, but a longer period. For this generation of distributors accustomed to enjoying era dividends, this is a long ebb tide.
The reason many distributors feel business is harder today is partly due to external market factors, but more importantly, they have stayed in their comfort zone for too long.
In the past few decades, many distributors thrived not because of their own strong capabilities, but because brand owners supported them. Brands had dividends; manufacturers gave resources, protection, and methods. Distributors only needed to follow instructions and do the simplest搬运 work to get a share.
But now, brand owners themselves are struggling. When there is no upstream support, distributors without self-sustaining ability and poor survival quality naturally fall.
This fall is not a temporary pain but elimination.
President Zou shared a set of research data: the elimination rate of small and micro distributors is astonishingly fast, with some regions closing at a rate of 10%-20% per year.
**When the tide is certain not to return, building a higher sandcastle on the beach is futile. So, the next question is more fatal than 'how to endure': Why should your business exist at all?**
**What Money Are Distributors Actually Making?**
Since the macro environment has changed and the old way of life no longer works, where should distributors go?
Before answering this question, President Zou raised a more fundamental thought: You must first understand your own company.
Many distributors have worked all their lives without clearly thinking about which money they are earning.
In a business model, a company's revenue sources are无非 three types: risk returns, monopoly returns, and operational returns.
If you clearly see these three types of returns, many debates will naturally end: whether to do B2B, whether to transform into a supply chain enterprise, whether to cross categories and channels...
Behind these surface issues, the essence is asking: Which return method can I still rely on to make money?
**The first is risk returns.** Simply put, it's about gambling and being bold. If you see the market will rise, or the manufacturer has policies, or a product will explode, you dare to stock up and hoard.
At this time, you are earning risk money. You don't need much refined operation; as long as you dare to buy and sell, you can arbitrage using information gaps and time differences.
In the era of high-speed growth, such opportunities did exist, and many distributors' first pot of gold came from this. In a market with oversupply and increasingly transparent information, risk returns dry up first.
**The second is monopoly returns.** In the past, 'relationships' and 'authorization' were the best moats for distributors. Today's problem is that when the market enters stock competition, upstream brands face greater growth pressure, and protection and premiums are diluted. Brands also need to survive; they care more about efficiency, results, and control.
So the era of relying on manufacturer relationships and living on high fees is gone forever.
When risk returns and monopoly returns are both decreasing, distributors have only one reliance left: the third type, operational returns.
What are operational returns? Simply put, it's the extreme efficiency of earning hard-earned money. **It's not saved, but 'designed' profit.**
Moving goods from warehouse A to store B is a standard action. Anyone can do it; why can you make money? Because you move faster, have lower loss, and have more flexible capital turnover.
President Zou emphasized in the interview: Don't get hung up on whether you call yourself a 'distributor' or a 'supply chain enterprise'; these definitions are meaningless.
The essence of business returns to the most direct accounting logic: Is your sales cost lower than others? Is your fulfillment cost lower than others? Is your capital cost lower than others?
If others need 3 yuan in cost for this business, and you can reduce the cost to 2.5 yuan through extreme operation, then that 0.5 yuan is your profit and your moat.
At that point, even if a brand wants to replace you, it can't find anyone with lower cost; even if a retailer wants to bypass you, its own cost might be higher than yours.
**Next-Generation Distributors: Scale with Efficiency**
In the new market environment, what do surviving distributors look like? President Zou gave two basic characteristics: first, scale; second, efficiency.
**First is scale, which is the entry ticket. Without scale, there is no efficiency.**
Why?
Improving efficiency requires spending money—on systems, warehouse changes, team expansion, etc. These infrastructure investments are huge fixed costs.
Let's do the math: For example, investing 1 million in infrastructure. For a small distributor with annual revenue of only 10 million, this accounts for 10% of revenue, while net profit might be only 3%. They simply can't afford it and dare not invest.
But for a large distributor with annual revenue of 1 billion, even if net profit is less than 2%, 1 million is just a drop in the bucket. They can decisively approve system upgrades and equipment changes.
Large distributors, because of scale, can afford efficiency tools; after efficiency improves, costs are lower, and they can grab more market share. Small distributors, because they can't afford it, are locked into handicraft-level efficiency and eventually eliminated by the market.
Second is efficiency, which is the moat.
Is scale alone enough? Absolutely not! President Zou emphasized: Don't mistake scale for simply increasing turnover.
In the past, many distributors built scale without technical content—randomly taking brands, randomly stocking goods, even losing money to boost sales—and could still achieve large turnover. But in today's market, bloated scale is fatal; you lose money faster than you make it.
The true next-generation distributor must achieve scale with efficiency.
What is scale with efficiency? It's when your business grows from 100 million to 1 billion, your organization doesn't collapse, and your marginal costs actually decrease.
Many distributors could manage 20-30 people before, but once they expand to 200-300 people, management costs skyrocket and efficiency declines. This is because they are still managing a modern supply chain enterprise with the methods of a 'makeshift team'.
In the end, scale is the ticket to stay, but the moat is never scale itself, but the replicable efficiency system behind that scale.
**Build Capability in the Organization, Build Management in Systems**
Having seen the trend and knowing to focus on efficiency, many distributor bosses still find transformation difficult. "I understand the principles, but I really can't push it forward." This is the real portrayal of many distributor bosses.
"Many distributor bosses actually lack no awareness; their awareness is even very high. The real bottleneck is that team capability and organizational collaboration can't keep up. No matter how clear the boss is, it's useless." President Zou used a vivid metaphor: "The soul is in heaven, but the body is still on earth."
In the past, many distributors started with a 'makeshift team'—a couple with a few relatives—and built the business on era dividends. But today, this organization relying on personal rule and emotional ties has become the biggest obstacle to efficiency.
When there are only a few people, a shout gets everyone moving; when you have hundreds, shouting can't manage them. Facing this problem, President Zou proposed a direction in the 'Zhoupu Data · Polaris Club' organization: **'Build capability in the organization, build management in systems.'**
This is not a slogan, but two sets of actions for distributor operation and management.
**First, build capability in the organization.** In the past, making money often depended on the boss's key actions and the personal abilities of a few old employees. Once that person left, the capability was lost.
When a company grows from dozens to hundreds of people, the core change is moving from personal rule to scientific organizational design. You must clarify job boundaries, straighten responsibility chains, and write down 'who is responsible, who cooperates, who backs up' for key processes. Otherwise, the larger the organization, the higher the communication costs, and the more typical symptom appears: everyone is busy, but no one is accountable for results.
Building capability in the organization means extracting these personal experiences and turning them into replicable standards.
**Second, build management in systems.** Distributor management must be like a factory assembly line, fixing all actions in the system.
For example, on a car assembly line, wherever the track goes, the worker tightens that screw. A distributor's business is the same: from order acquisition, warehouse picking, to logistics delivery, all collaboration can be on a technical platform. Let data drive business, not the boss's gut feeling, nor the salesperson's mood.
**Face Competition, Understand Your Own Company**
At the end of the interview, I asked President Zou: If you could give only one piece of advice to today's distributors, what would it be?
His answer was just one sentence: "Understand your own company."
In an era full of uncertainty, anxiety is normal. To alleviate anxiety, many distributor bosses habitually seek external solutions—attending lectures to find shortcuts, asking experts for new trends or models, hoping to hear a few 'golden phrases' to double performance.
This mindset is actually terrifying. Entrusting your fate to others' 'dry goods' is itself a form of laziness.
President Zou suggested that every distributor boss calm down, honestly face themselves, and ask three questions:
First, what money am I actually making? Is it luck, relationships, or truly the ability to make money through efficiency?
Second, where is my efficiency bottleneck? Is it low labor efficiency? Slow capital turnover? Or excessive loss? If you can't even find the cause, no medicine can save you.
Third, do I dare to touch my own 'cheese'? All change is essentially a redistribution of interests. If change doesn't affect vested interests, it's ineffective. Do you dare to make difficult decisions for efficiency?
Answering these three questions requires not courage but honesty. Honestly admit that growth no longer comes from luck and relationships, but only from systematic efficiency advantages.
**Seeing your company clearly is the beginning of the war, not the end.** The real challenge is: How do you break down the answer of 'efficiency' into shorter picking paths in your warehouse, clearer responsibility divisions in your team, and faster turnover times in your capital pool?
**One person can think clearly, but only a group can make the organization go further.** This is precisely the intent of our joint initiative with Zhoupu Data to launch the 'Face Competition · 2026 Polaris Club Spring Forum'.
Due to space limitations, the exchange with President Zou goes far beyond this. For more content, let's look forward to March 17, at the '2026 Polaris Club Spring Forum', for in-depth collision and discussion.


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## Citation metadata

- Publisher: New Distribution
- Author: Asher
- Published: 2026-02-11
- Canonical: https://xinjignxiao.com/en/articles/in-the-next-five-years-distributors-will-have-only-one-lifeline-extreme-30220e62/
- Original source: https://mp.weixin.qq.com/s/xDClhraZdWYVyFDCeg5pcg

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