---
title: "Liu Chunxiong: Dealers Are Dead, the Era Calls for Operators"
description: "In the evolution of China's FMCG industry, dealers were pioneers of market expansion and the 'capillaries' connecting brands to retail terminals. However, as market conditions have profoundly changed, this role is undergoing a deep transformation, with dealers transitioning from 'goods movers' to full-chain operators."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-06-17"
categories: "Dealer Operations"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/3ZdOAwZm0RVGEDRxRri5dg"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/liu-chunxiong-dealers-are-dead-the-era-calls-for-operators-0f3f211a/"
citation: "刘春雄. “Liu Chunxiong: Dealers Are Dead, the Era Calls for Operators.” New Distribution, 2025-06-17. https://xinjignxiao.com/en/articles/liu-chunxiong-dealers-are-dead-the-era-calls-for-operators-0f3f211a/"
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---

# Liu Chunxiong: Dealers Are Dead, the Era Calls for Operators

> In the evolution of China's FMCG industry, dealers were pioneers of market expansion and the 'capillaries' connecting brands to retail terminals. However, as market conditions have profoundly changed, this role is undergoing a deep transformation, with dealers transitioning from 'goods movers' to full-chain operators.

**Editor's Note:** In the development of China's FMCG industry, dealers were the pioneers of market expansion and the 'capillaries' connecting brands to retail terminals. But today, as market conditions have profoundly changed, this role is undergoing a deep transformation.
In the past, dealers were the 'porters' and 'inventory pools' in the commodity circulation chain, with channel coverage and distribution capabilities as their core competitiveness. In that era, 'whoever controlled the channel owned the market.'
But as the supply-demand structure has shifted, brands are no longer the market dominators. 'New demand, new supply' is forcing a deep transformation of the entire circulation system.
We are entering a new business world:
  * Traffic is shifting from the brand side to the terminal side, and consumer choices are becoming more autonomous;
  * Digital capabilities have become infrastructure, and operations are being reconstructed by data;
  * Operational value outweighs distribution value, and empowering terminal business has become the core competitiveness;
  * Dealers are transforming from 'sellers' to providers of full-chain operations and services.
Against this backdrop, the traditional title 'dealer' can no longer cover the responsibilities and value they are undertaking. We see more and more regional trading companies actively completing the role transition from 'dealer' to 'operator.' This is not just a change in function but also a cognitive upgrade and organizational reshaping.
Based on this, New Distribution, together with Liu Chunxiong, professor at Zhengzhou University, advocate of new marketing, and deputy director of the Scene Marketing Research Institute, is launching the series 'New Business World: From Dealers to Operators.'
In an era of increasing variables, we believe that cognition is more critical than resources. We hope this series can provide a valuable set of observation perspectives and action frameworks for all participants who are in the midst of this and thinking about the future, helping them find their position and direction in the new business world.
Is the title alarmist? It is certainly alarming, but not alarmist.
In recent years, I have made several predictions.
Now, in all supermarket renovation stores, manufacturer sales promoters have disappeared. Sales promoters 'interfering' with consumers' normal shopping has become a 'Chinese-style tumor' in stores, and of course, they should disappear.
Earlier, I predicted the demise of the distribution rate KPI and proposed the concept of 'distribution accuracy rate.' Now that the proportion of near-expiry products is so high, can it be said that it has nothing to do with the distribution rate assessment?
Predictions are not about what has already happened but about what is about to happen. As long as it hasn't happened, some will say it's alarmist.
My predictions basically occur before the critical point. Prediction is occurrence. It's not that I have foresight, but that I can observe the signs of trends.
Trends represent irreversibility; signs represent the first step of the beginning.
Dealers are dead, and operators are taking over. This is no longer a prediction but a trend that has already begun, though some are unwilling to admit it. In a few years, the current typical dealer form will definitely die out.
If you don't believe it, wait and see!
In 1998, when wholesalers were about to disappear, I experienced it. At the same time, the salespeople of that era also disappeared. What rose up were dealers and sales representatives.
Wholesalers and salespeople, dealers and sales representatives—these are a pair of ecosystems. So, in the future, not only dealers but also sales representatives will disappear.
Wholesalers and salespeople have already proven to be passers-by of the era. Dealers and sales representatives will also be passers-by of the era.
A channel species disappears, but channel merchants do not disappear. New channel species will definitely be born.
Just because the butcher dies, do we have to eat pigs with hair?
Some dealers will be reborn, and new merchants will also emerge. The so-called transformation is often not the transformation of old merchants but the rise of new merchants.
The Era Mission of Dealers
Before 1998, what did wholesalers do? Leveraging the radiation advantages of large wholesale markets, they distributed to second-, third-, and fourth-tier markets.
Wholesalers were sedentary merchants. Customers came to them, invoiced, and loaded goods. The biggest resource of wholesalers was brand agency rights, the biggest asset was warehouses, and the most numerous people were loaders.
After 1998, we promoted channel sinking and the transformation from 'sedentary merchants' to 'itinerant merchants.' To get dealers to load trucks and deliver to stores, we spent a lot of effort promoting it. It wasn't until delivery became a standard feature for dealers that everyone thought delivery was normal.
At a 'New Year's First Lesson' one year, I mentioned that dealers would no longer participate in delivery in the future. A dealer boss stood up abruptly and asked, 'Is a dealer who doesn't deliver still a dealer?'
Don't think that dealer delivery is natural. Previously, they didn't deliver; now they do; in the future, they may not deliver again.
It was deep distribution that gave dealers four channel functions: promotion, distribution, warehousing and delivery, and financing. This is typical of small but complete, which will not be competitive in the face of future large and specialized channel merchants.
The era mission of dealers was to assist large brand manufacturers in completing nationwide terminal coverage through deep distribution, thereby enabling most FMCG industries in China to complete concentration and oligopolization.
China is vast, early urbanization was low, there was a lack of large channel merchants and large retailers, and consumption levels were diverse. Deep distribution leveraged the small size of dealers (dealers were much smaller than past wholesalers), allowing manufacturers to control channels through 'deep intervention.' For example, market behaviors like distribution and inventory pressure are unimaginable in countries like Europe and the US.
Now, the era mission of dealers has been completed.
Let's look at some labels of dealers: small-scale, small but complete, 'interventionist,' etc. These are not normal, sustainable business behaviors. But they were valuable in a specific era, with the greatest value being that manufacturers could control channels.
It is precisely because of the small size of dealers that brand manufacturers could 'deeply intervene' in the entire channel chain and complete channel control. This goes against the principle of division of labor between manufacturers and distributors and is a deformed channel form.
Deep distribution has prevailed in China for over 20 years, with too much influence and too long a duration, so that the abnormal channel form is considered normal by everyone.
Just like the Pangdonglai renovation that began in 2024. More than 20 years ago, the Carrefour model defeated the Walmart model, leading Chinese supermarkets astray, and everyone thought the Carrefour model was normal. The current supermarket predicament stems from the deformed supermarket form. The Pangdonglai renovation is a return to the normal form of supermarkets. Only now do people realize that Carrefour's 'selling shelves' model is abnormal.
In fact, dealers in markets above the provincial capital level are already 'dead.' In cities above the provincial capital, for leading FMCG companies, so-called dealers have been reduced to delivery agents, with manufacturer orders placed by company sales representatives through visit-based ordering. With the development of B2b, urban distribution functions will also be handed over, leaving only the financing function of taking money to buy goods, without participating in channel operations at all.
Dealer Functions Are Being Stripped Away
Before 1998, wholesalers operated on a provincial scale and were relatively large. Now, dealers operate on a county basis and are very small. There are only a few exceptions.
The four traditional dealer functions—promotion, ordering, delivery, and financing—are concentrated in small dealers. In any era, 'small but complete' is not a good word economically. However, integrating the four functions in small dealers makes management coordination more convenient, such as carrying goods during sales visits, which still exists in some county-level cities.
The B2B craze that began in 2014 initially aimed to 'kill dealers.' But dealers didn't die; instead, B2B died. This gave some dealers a false impression that current difficulties are temporary and B2b is not scary.
The wholesale takeover by B2B didn't succeed, but regional B2b platforms specializing in ordering and delivery have been thriving in recent years, spreading like wildfire and greatly promoting the disintegration of dealer functions.
Ordering, delivery, and financing—functions with economies of scale—are being stripped from traditional dealers.
So, with three of the four functions stripped away, what can dealers still do? And for how long?
Although B2b is a trend, its share is only about 10%. Although dealers have a bleak future, they are not in immediate danger for at least a few years.
The tipping point for dealer collapse is when B2b reaches a 30% share. Perhaps in a very short time, dealers will face overall collapse. So, I say that the collapse of dealers and the rapid development of B2b are at the same point in time.
The death of dealers is not a single day but a slow process, like boiling a frog in warm water. When dealers are unable to save themselves, they will collapse rapidly at some point.
A Proper Name
Dealers replaced wholesalers, and sales representatives replaced salespeople. So why not call dealers 'new-type wholesalers' and sales representatives 'new-type salespeople'?
Behind the change in name is a change in function.
If the name is not correct, words will not be smooth.
Giving a new name and taking on a new function is a common occurrence in the transformation process.
It can even be said that it is precisely because of the emergence of an appropriate name that the development of a matter is accelerated.
Dealers are dying, and four types of new channel merchants are emerging. Some already have recognized names, and some names are yet to be determined.
**First, B2b Platform Operators**
From B2B to B2b, it took more than 10 years, and everyone has accepted the term B2b. B2b is more accurate than B2B. B2b platforms are divided into order B2b and delivery B2b. Now there are also integrated order and delivery B2b platforms. In the future, delivery B2b will become larger-scale professional third-party service providers.
Currently, it is the hardest period for B2b platform operators. I believe B2b is a trend, but monetizing the trend will take time. This is the darkness before dawn.
**Second, Suppliers**
In China, this is a new species after supermarket renovation. In developed countries, this is a traditional species.
Supermarket renovation will produce three types of supply chains.
First, direct supply from well-known brand manufacturers (F2b). Because after supermarket renovation, the SKU count of a single brand is greatly reduced, but well-known brands are still hard currency in supermarkets and indispensable. This is an excellent opportunity to create national big single products.
Second, supermarket private label (b2M). High cost-performance products for supermarkets will emerge from this.
Third, centralized supply by large suppliers (F2B2b). Behind large supermarkets in Europe and the US, there are 5-10 suppliers. After China's supermarket renovation, large suppliers will also be born. This did not exist in the past.
The name 'supplier' is common in Europe and the US. Although it will gradually emerge in China after renovation, it is likely to use this name.
**Third, Brand Operators**
What functions do operators undertake? Mainly user operations and product promotion.
Whose products do they promote? Of course, the brand manufacturer's products. So, operators specifically refer to brand operators. Of course, there are also category operators. These are operators that centrally operate the same category, especially long-tail categories, and have relatively strong voice in the channel.
From a product promotion perspective, this is not a new function. However, past promotion methods were problematic, such as supermarket sales promoters, which can also be considered promotion. A few years ago, I also used the concept of 'promotion merchants,' but it didn't resonate with everyone, so I gave it up.
Brand operators are the focus of this article. Manufacturers and dealers have faced relatively big problems in recent years: first, industry shrinkage; the FMCG industry has been shrinking for over 10 years and is still shrinking; second, the well-known international and domestic business environment issues; third, the well-known various new retail formats eroding offline share; fourth, supermarket renovation will greatly affect the sales of brand manufacturers and dealers.
The first three aspects are old problems. In 2025, supermarket renovation is accelerating, and manufacturers and dealers must have incremental response strategies. I believe the response should include two aspects: first, find the source of increment; second, find incremental actions.
The source of increment is simple but difficult: promote 'three new and one high,' namely new brands, new products, new markets, and high-end products. The incremental action is user operations, specifically bC integrated user operations.
Using bC integrated operations to complete the promotion of 'three new and one high' is a channel model with more Chinese characteristics after deep distribution.
Whether it is user operations deep in consumption scenarios or user operations through terminals, it must rely on the bC integrated model. Emphasizing bC integration because the b-end is the bridge to reach C-end users. Operating users requires leveraging b-end relationships, and operators happen to have b-end relationships.
The relational characteristics of Chinese channels have always been a Chinese characteristic and have often been criticized. It is precisely because of this characteristic that Chinese channels have a unique value: user cognition function.
User operations are not user sales but user cognition operations, or rather, user operations that integrate cognition, transaction, and relationship.
It is the user cognition function of Chinese channels that allows Chinese channels, after deep distribution, to have a more important role: user operations.
User operations will give birth to operators. So, operators will be the most important role in the channel after dealers.
With user operations, there is user cognition; with user cognition, there is user purchase; with user purchase, there are retailer orders; with retailer orders, there is product delivery; with product delivery, there is a need for financing.
From the logical relationship of channel functions: Operator → B2b order platform → B2b delivery platform → financing platform.
In terms of importance, user operations are the primary function of the channel.
So, who has an advantage in user operations? Of course, dealers. Deep distribution established the relationship between dealers and terminals. And b-end relationships are precisely the prerequisite for bC integrated user operations.
**Fourth, Tray Merchants**
The financing function of dealers was once highly valued by brand manufacturers. But now, there are specialized channel chain financing merchants. The liquor industry has been severely overstocked in recent years. The formation and resolution of inventory pressure are both through financing merchants. When overstocking, to solve capital problems, they relied on financing merchants. Now, to alleviate the price inversion pressure caused by overstocking, they still go through financing merchants. For dealers in cities above the provincial capital, manufacturers first took back the visit-based ordering function, then handed delivery to B2b platforms, and some are left with only the financing function.
As mentioned above, the functions of dealers have been undertaken by four types of new channel merchants. B2b platform merchants and suppliers are widely accepted terms. Tray merchants (or financing merchants) are a hidden function with low exposure. The remaining core channel function, operators, if widely recognized, will greatly benefit the transformation of dealers.
Academic naming is different from commercial naming. Academic naming requires precision, with accurate connotation and denotation of concepts. Commercial naming requires agility, imagery, and colloquialism.
Personally, I feel that 'B2b platform operator' may not be colloquial; now calling it 'B2b platform' or 'platform merchant' is more colloquial.
'Brand operator' and 'category operator' are also not colloquial. I think 'brand operator' is likely to be simplified to 'operator.' As for 'category operator,' it is only applicable in professional analysis systems.
Of course, the formation of commercial concepts is an interactive process. First, it must conform to commercial trends; second, someone must propose it and get media promotion; finally, the public accepts it.
Dealers Are Dead
First, let's label and portray dealers.
Dealers are channel merchants who achieve increment by completing the core functions of deep distribution and earn profits through product price differences.
Here, there are three core concepts: deep distribution, increment, and price difference. Can current dealers still achieve this?
First, let's look at deep distribution.
A complete channel chain includes the manufacturer (F-end), intermediary (B-end), retailer (b-end), and user (C-end).
The business logic of wholesalers is F2B. Manufacturer control over the channel ends at the B-end. There is no distribution.
Dealers are deep distribution F2B2b. Manufacturer control over the channel ends at the b-end.
Since e-commerce, the channel has changed significantly.
E-commerce is direct sales through platforms F2P2C (manufacturer F - platform P - user C). No distribution is needed.
Supermarket direct procurement is F2b. No distribution.
Suppliers are F2B2b. This is another distribution channel that bypasses dealers.
B2b platform merchants are F2P2b. This competes with dealers for distribution.
From a distribution perspective, direct access without distribution, or multi-channel distribution, is taking an increasing share. The distribution share left for dealers is decreasing.
Second, look at increment.
In the early days, deep distribution was increment. Later, buying out terminal resources (such as shelves and displays) was increment.
When the above two methods fail to generate increment, inventory pressure becomes 'a last resort.'
Deep distribution no longer has incremental methods.
Third, look at dealer profits.
At the end of 2024 and the beginning of 2025, I looked at some frontline markets and found a surprising phenomenon: some well-known big brands could not find dealers. Although I predicted this problem years ago, I didn't expect it to be so severe. In the past, dealership rights for well-known big brands were highly sought after.
The core reason is that due to severe inventory pressure, price inversion, and difficulty in increment, it has become very difficult for dealers to earn profits through product price differences.
This phenomenon existed in the past, but by leveraging well-known brands to drive non-well-known brands, there was still comprehensive profit to be made. Now, this combined profit model is hard to sustain.
'Dealers are dead' means that the dealer channel model can no longer perform the channel functions it once did, has seriously lagged behind, and must exit the historical stage.
The Era Calls for Brand Operators
History has its laws and always moves forward.
Wholesalers pushed the manufacturer's channel touchpoints to the B-end, and dealers pushed them to the b-end. So, where should the next round of channel touchpoints be?
Reaching the b-end is distribution; reaching the C-end is sell-through.
The problem dealers currently face is precisely that distribution power is too strong and sell-through power is insufficient, causing terminal inventory buildup.
This is like upstream opening the floodgates while downstream is blocked, creating a channel barrier lake that is in danger of collapsing at any time.
Deep distribution without increment can only raise competitive barriers in mutual competition, harming all.
The solution is to reach the C-end, user operations, i.e., C-end operations.
So, who will operate users?
Manufacturers, dealers, or retailers?
Manufacturers are too far from users. Retailers themselves are certainly operating users (like Pangdonglai's private label), but not from the manufacturer's perspective. Are dealers, whose core action is deep distribution, willing to operate users?
If dealers stick to deep distribution actions, they are facing death.
If dealers start operating users, then they are not dealers but brand operators.
Earlier, I portrayed dealers as: channel merchants who achieve increment by completing the core functions of deep distribution and earn profits through product price differences.
So, a typical brand operator should be portrayed as: manufacturer-operator integration (manufacturer and operator as one), operating both b and C ends as one, achieving sales growth by promoting 'three new and one high,' and receiving user operation subsidies from the manufacturer.
Currently, it is a transitional period from dealers to operators. Some dealers have already started user operations and achieved growth. Of course, the promotion process has manufacturer cost support. At the same time, dealers can also earn sales price differences.
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## Citation metadata

- Publisher: New Distribution
- Author: 刘春雄
- Published: 2025-06-17
- Canonical: https://xinjignxiao.com/en/articles/liu-chunxiong-dealers-are-dead-the-era-calls-for-operators-0f3f211a/
- Original source: https://mp.weixin.qq.com/s/3ZdOAwZm0RVGEDRxRri5dg

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