Yesterday, I talked with distributor Jia, who deals in condiments, and realized we both have a noose. I deal in snack foods, while Jia deals in condiments. For condiments, the noose is 5 million yuan. What does that mean? Below 5 million, the business is your own, and you can do as you please. Above 5 million, it belongs to the manufacturer, who tells you to stock up, promote, and give gifts, and you have to comply. If you slip up, you're out, and they can easily replace you with another agent. 5 million is the noose for condiment distributors. Anyone in distribution understands this. In recent years, business has been tough, and the market is hard to develop. Distributors work hard to build up their business, but once the market forms a brand, anyone can be given the agency. Once that threshold is crossed, the distributor immediately loses control. Once the brand market is established, who can do you in?

  1. The manufacturer's sales reps. To meet their targets, they don't care about your survival. They force unsellable products on you, and if you don't stock up, it won't work.
  2. Other distributors. A little gift, a kickback, and your distribution rights mysteriously disappear. So, if a distributor doesn't grow, they don't make money and work hard. If they grow, they have to play the fool and be pushed around. It's really tough. If you get a good manufacturer, it's better than burning incense for blessings. Every distributor has a line. Below that line, they can make a profit, keep cash flowing, expand, and develop healthily. Once they exceed that line, it becomes a "noose." Every distributor's line is different, but that line is controlled by the same group of people!!! The first group controlling this line is: the manufacturer. Continuously raising requirements, sales targets, and stocking demands... Every change challenges the distributor's survival ability. Every change is a disaster for the distributor. Each time stocking is increased, all sales, promotions, and plans must change, and all requirements must be raised. More investment, busier work, higher costs, but profits shrink. In the end, only the manufacturer's profits increase. Each price increase means all terminals and customers need to be re-maintained. Various benefits, promises, and interests must be adjusted again. If you don't do well, you lose half your customers, and all the goods are returned, leaving you stuck with them. The worst part is, sometimes, to meet targets, the manufacturer's sales reps force unsellable products on you. Even more infuriating, once the brand and market are built, they cancel your distribution rights with a word. With such a rope in the manufacturer's hands and so many uncertainties, distributors have no sense of security. The second group controlling this line is: supermarkets. They used to be the best place for distributors to move volume and a battleground for market share. But now, various fees keep rising: barcode fees, display fees, entry fees, etc. Plus, there are task requirements and sales targets. Requirements keep rising, but business gets worse, and all the crisis shifts to the distributor. If sales and tasks aren't met, they deduct money and raise fees again. If you can't handle it, you're out, because there are plenty of distributors lining up behind you, waiting to be trapped. The third group controlling this line is: terminal customers. The market is only so big. To gain more share, you must constantly develop new terminal customers and maintain existing ones without any mistakes. Under such conditions, terminal demands also rise. After all, there are many distributors, and they have many choices. If you don't do business with them, someone else will. So, they delay payment until products are sold, and then delay further. "If I didn't owe you money, I wouldn't cooperate with you"... All these problems converge. Under these ropes, the distributor's living space keeps shrinking and being restricted. The suffocating feeling grows stronger. But every resistance faces opposition from all sides. The manufacturer threatens to replace the distributor, supermarkets refuse your goods, terminals return products and don't pay. In the end, the distributor is trapped tighter and tighter on the "noose," unable to struggle or escape. Welcome to leave comments at the bottom of the article to share your views! Note: This article is sourced from the internet.