---
title: "Is the Era of Distributors Over? Perhaps Not Too Late!"
description: "When we talk with distributor friends in the market, many report that business is increasingly difficult, with mounting pressures from sales, capital, warehousing, personnel, terminals, channel costs, and even the internet, leaving many feeling breathless. A common question is whether the era of distributors is coming to an end. In reality, although the entire Chinese economy is undergoing transformation and upgrading, it has not yet reached the point where the distributor era ends; the channel model operated by intermediaries may still have room for further development and will not easily come to an end."
author: "袁弘一"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-05-26"
language: "en"
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# Is the Era of Distributors Over? Perhaps Not Too Late!

> When we talk with distributor friends in the market, many report that business is increasingly difficult, with mounting pressures from sales, capital, warehousing, personnel, terminals, channel costs, and even the internet, leaving many feeling breathless. A common question is whether the era of distributors is coming to an end. In reality, although the entire Chinese economy is undergoing transformation and upgrading, it has not yet reached the point where the distributor era ends; the channel model operated by intermediaries may still have room for further development and will not easily come to an end.

When we talk with distributor friends in the market, many report that business is increasingly difficult, with mounting pressures from sales, capital, warehousing, personnel, terminals, channel costs, and even the internet, leaving many feeling breathless.
**A common question among distributors is: 'Is the era of distributors coming to an end?'**
In reality, although the entire Chinese economy is undergoing transformation and upgrading, it has not yet reached the point where the distributor era ends; the channel model operated by intermediaries may still have room for further development and will not easily come to an end.
However, for traditional distributors, if they fail to shift their mindset, it is highly likely that their own companies will reach the end. Therefore, distributor friends must have a sense of urgency and prepare for transformation and upgrading.
**Distributors Need to Adjust Their Positioning**
Distributors have always been a special type of business entity, achieving profitability by selling products from different companies to sub-distributors or retail terminals.
This has formed a fixed mindset in traditional distributors: they see themselves as the best maintainers of channel relationships, thereby controlling some channel resources to achieve distribution and profit. Obviously, if distributors still hold such a concept, they may be in danger.
**Therefore, distributors need to adjust their positioning, shifting from the traditional intermediary role to that of channel value creators.**
Traditionally, we generally believe that distributors achieve profitability by selling or leasing channel resources.
After marketing entered the era of Marketing 3.0, the transmission and realization of channel value have become higher requirements that companies place on distributors, and the value created by distributors through channel operations is precisely the source of their profits.
Although the channel resources controlled by distributors remain important, how to use these resources to operate products and brands to create value is a question distributors must seriously consider.
Based on this positioning adjustment, the introduction of resources from upstream and downstream industry chains, as well as the level of integrated operation of channel resources, have become standards for measuring distributor capabilities and profitability.
Whether distributors can gain favor from companies or products with good market prospects will largely depend on the series of adjustments starting from positioning and the effects brought by those adjustments.
**Distributors Need to Build Their Own Commercial Brands with Brand Power**
Currently, very few distributors have their own brands. Many distributors, even though they have transitioned from individual businesses to limited companies, still lack their own brands due to deep-rooted traditional business concepts. Even if some distributors claim to have their own brands, upon closer inquiry, they are actually OEM product brands created through commissioned processing, and the distributor as a limited liability company has no brand.
Clearly, this situation needs to change. Many distributors have already realized this issue, or some in certain industries are beginning to realize it, and the construction and development of distributor-owned brands have been put on the agenda.
Since retail terminals like Carrefour, Walmart, RT-Mart, and Wumart were able to create commercial brands with strong brand power years ago, why can't distributors create their own commercial brands?
**At that time, everyone focused on the development and utilization of channel resources, neglecting the construction of distributor brands.**
Now, the professional capabilities required of distributors as professional marketing execution organizations are increasingly strong. Many distributors have formed their own unique distribution models and business philosophies. Creating a brand to carry the professional skills of distributors seems imperative.
**Distributors Need to Create Marketing Management Models**
Distributors are not commercial entities that buy low and sell high to earn price differences, but rather creators of channel value, thereby maximizing their own value. **Therefore, distributors need to create their own marketing management models to provide good marketing support for the connection of upstream and downstream enterprises in the channel.**
Successful distributors with brands all have their own unique marketing management models. This marketing management model is the distributor's "secret recipe," their core competency, and the magic weapon for generating profits.
As the saying goes, "Nothing can be accomplished without norms or standards." For distributors, determining a marketing management model means establishing their channel construction, product portfolio, marketing system structure, organizational operation processes, etc. This is a process of trade-offs and a reference standard for distributors when choosing among many products. Without such a marketing management model, distributors can easily be swayed by numerous temptations and not know what to choose.
If they want to do everything that seems profitable, they may end up deviating from their main business and development direction, "picking up sesame seeds and losing the watermelon," making it difficult to build advantages on the path of specialization, failing to attract the attention of excellent companies, and thus losing the opportunity to become large and strong.
**Distributors Need to Shift from Control to Service**
Traditionally, the reason a company needs distributors is to achieve rapid distribution through network channels such as distributors.
A strong distributor can quickly distribute products to any channel within their territory, achieving the goal of meeting consumers and realizing sales potential. To become strong, a distributor must possess this core competitiveness, which is the ability to control channel members at the terminal.
Because for the distributor group, compared with enterprises, they are hard-pressed to gain advantages in terms of capital strength, personnel, or other aspects, but in terms of timing, location, and harmony, distributors undoubtedly have more advantages.
This is also where distributors can easily build their core capabilities. To do so, distributors need to ensure that their channel members can make profits and, through services to channel members, free them from worries, gaining their trust and support.
Only then can distributors have the capital to cooperate with excellent companies for the long term and strengthen themselves.
Modern enterprises require distributors to shift from a resource-control concept to a service concept, because controlling resources does not create value, while service can create added value.
The resource-control stage was the root cause of price wars and promotion wars in the past. The service concept can effectively avoid price wars and promotion wars and can also prevent other channel interests from seizing channel resources.
**The core competitiveness of modern distributors has quietly changed. The most important change is the transformation of the distributor's function as an intermediary in commodity circulation. The service function in the channel chain has replaced the traditional distribution function, and can help upstream and downstream enterprises create service value to best serve final consumers.**
Compared with traditional distributors, modern distributors are clearly distinguished by positioning, brand, and service. Upstream enterprises have basically completed the transformation from extensive operation to precise operation.
At this time, enterprises are also setting stricter standards when looking for distributors. Having a clear positioning, being a strong professional marketing execution organization with a brand, and providing strong channel service capabilities have become three very important criteria for selecting distributors.
Source: Jiuzheng Building Materials Network
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