Distributors: Caught in the Middle, Suffering for Others An online joke says the most miserable role in an artillery battalion is the cook: wearing a green hat (cuckold), carrying a black pot (taking the blame), and watching others fire the cannons. Distributor bosses are professional "scapegoats." Why? Because they are caught in the middle. The brand belongs to the manufacturer; if the manufacturer frowns and says "you're out," the distributor loses the agency. Consumers are at the terminal; if the terminal turns its back and refuses your goods, sales vanish. With strong brands, manufacturers can bully and pressure distributors, but distributors rarely dare to pass that pressure onto terminals. They end up smiling at both sides. The most unjust part is that many of the manufacturers' complaints about distributors are actually the distributors taking the blame for others!
What Are Manufacturers' "Most Unsatisfactory" Issues with Distributors? Think about it: what are the "most thorny" problems in managing distributors? They boil down to four categories.
1. Distributors "Insufficient Capital Investment": Distributors fail to pay in full or on time...
2. Distributors "Poor Outlet Development": Distributors lack "manpower and vehicles": they are unwilling to go out and sell... This leads to untimely outlet development and low shelf presence...
3. Distributors "Inadequate Terminal Service": Distributor employees only focus on selling, not on terminal service. They skip visits (visiting big stores but not small ones, familiar old stores but not new ones), push old products over new ones... They fail to maintain attractive displays, manage abnormal pricing, or execute promotions (e.g., posting buy-one-get-one posters, bundling gifts)... They don't handle customer complaints promptly (e.g., not exchanging old-date stock, ignoring price undercutting by neighboring terminals, or late deliveries)... This leads to many "dead points" at terminals (outlets that are inactive or stop ordering)...
4. Distributors "Poor Market Awareness": Distributors are unwilling to invest in the market, refuse to sell on credit or roll over payments, and even pocket promotional items meant for terminals... They don't cooperate with manufacturers on new product launches, new channels, or new territory expansion plans...
Distributor Bosses Are Taking the Blame In fact, these complaints are not the distributor owners' fault; they are scapegoats.
Distributor Capital Problems Analysis: Distributors face huge capital pressure: manufacturers demand cash before delivery, while terminals demand goods before payment. Inventories and receivables grow, and they must advance funds for promotions, with complicated reimbursement... It's not that distributor bosses lack money; poor management and excessive capital occupation cause the pressure, especially for large distributors. A significant portion of distributor capital is tied up in terminal outlets. So, if their capital isn't liquid, it's largely because their outlets' capital isn't liquid. Why isn't outlet capital liquid? The industry has mature practices for receivables management and assessment. Do distributors have processes for "terminal customer credit limits and terms"? Do they track overdue or over-limit accounts daily, summarize weekly, and assess monthly? If distributors implement detailed "receivables management and assessment systems" for employees, outlet capital will free up, easing the distributor's capital pressure and resolving the "untimely payments" conflict. Thus, insufficient distributor capital is largely a problem of employee receivables management and assessment.
Distributors "Lack Manpower, Vehicles, and Willingness to Sell"... Untimely Outlet Development and Low Shelf Presence. Analysis: Who is better at developing outlets: manufacturer salespeople or distributor salespeople? Manufacturer salespeople are "regular troops"—perhaps more educated, better trained, with uniforms, better pay, and travel perks... But a terminal might resist eight visits from manufacturer staff, yet when a distributor's person says, "Sister, this is my product, do me a favor," the terminal might order: "Oh, it's yours? Why didn't you say so earlier?" Why? Because of strong relationships. Manufacturer staff change often and usually cover large areas (only a few like Master Kong do regular terminal visits). How many times do your people visit terminals? Distributor staff have been delivering for ten years, extending credit for ten years, and even playing cards or visiting relatives with terminal owners during holidays... This relationship advantage is impossible for manufacturers to replicate. If you assess distributor employees on "outlet development," "new product placements," "number of new product orders per month," and "active ordering customers per month," you can mobilize them to speed up new product placement and outlet development. No distributor boss wants "untimely outlet development or low shelf presence." This is also an employee assessment and management issue.
Distributors "Inadequate Terminal Service" Analysis: Similarly, no distributor boss wants "inadequate terminal service leading to dead or lost stores." Terminal service is performed by distributor employees, not the boss. If you assess distributor staff on "complete visits without skipping," visit rates and ordering customers will increase... If you assess "standard terminal displays," displays improve and sell-through speeds up... If you assess "penalties for untimely complaint handling," complaints decrease and active customers increase... So, "inadequate terminal service" is also a matter of employee assessment and management efficiency.
Distributors Not Cooperating with Manufacturers' New Market, Territory, or Channel Development Strategies: Analysis: Business follows its own rules; don't mix in emotions. Distributors are just doing business with manufacturers. Why should they listen to you? Unless selling your products makes money, their willingness to cooperate will naturally increase. How to make distributors money? Through new product sales (changing product mix), new channel development (changing channel mix), expanding weak territories (changing territory mix), and managing abnormal pricing, curbing cross-channel dumping, and stopping price undercutting (changing price mix)... How can distributors sell new products, and what if they don't move? I covered this in my 2018 WeChat video course in 12 episodes (episodes 5-16), half of which focused on personnel assessment and management for new product sales. New channel development, new territory expansion... all these require distributor personnel assessment to achieve. FMCG is a "lowly" industry: homogeneous products, numerous outlets, low unit prices, high volumes, thin margins... It relies on a human wave strategy and labor-intensive coverage. Today, most FMCG distributors have their own sales teams. The boss doesn't manage selling; the boss manages buying. The distributor team is the main force for selling, terminal visits, collecting payments, and terminal service. Manufacturers face many challenges in distributor management. Calm down and think: all problems require assessing distributor salespeople! When a manufacturer is dissatisfied with a distributor, consider: is it the distributor's problem or their employees' problem?
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