---
title: "Price Wars: How Can Distributors Break the Deadlock?"
description: "During a recent business trip to Hubei, several distributors mentioned they now hesitate to invest in offline channels because, after costly product introduction efforts, online platforms often reap the rewards once a product gains traction. With both online and offline markets saturated, squeezed growth is breaking existing balances, pushing offline distributors to the brink. However, there are still paths forward, which we explore from a retail development perspective."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-04-04"
categories: "Dealer Operations, Industry Trends, Management & Methods"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/price-wars-how-can-distributors-break-the-deadlock-6db07b9a.md"
original_source: "https://mp.weixin.qq.com/s/YNjPZBZvkHGhXfKW-ViT_g"
translation: "https://xinjignxiao.com/zh/articles/%E4%BB%B7%E6%A0%BC%E6%88%98-%E7%BB%8F%E9%94%80%E5%95%86%E6%80%8E%E4%B9%88%E7%A0%B4%E5%B1%80-6db07b9a.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/price-wars-how-can-distributors-break-the-deadlock-6db07b9a/"
citation: "高级研究员 海游. “Price Wars: How Can Distributors Break the Deadlock?.” New Distribution, 2026-04-04. https://xinjignxiao.com/en/articles/price-wars-how-can-distributors-break-the-deadlock-6db07b9a/"
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---

# Price Wars: How Can Distributors Break the Deadlock?

> During a recent business trip to Hubei, several distributors mentioned they now hesitate to invest in offline channels because, after costly product introduction efforts, online platforms often reap the rewards once a product gains traction. With both online and offline markets saturated, squeezed growth is breaking existing balances, pushing offline distributors to the brink. However, there are still paths forward, which we explore from a retail development perspective.

During a recent business trip to Hubei, several distributors mentioned they now hesitate to invest in offline channels because, after costly product introduction efforts, online platforms often reap the rewards once a product gains traction. Terminal outlets compare prices across multiple channels and ultimately choose to source online, so they only dare to work with large stores or chain systems.

In the current market environment, both online and offline are highly saturated. Squeezed growth will break existing balances, especially impacting offline distributors to an unbearable degree. But that doesn't mean there's no way out. Let's explore this from the perspective of retail development.

I believe the retail system will only have three forms in the future: **extreme service, extreme price, and extreme convenience**.

**Extreme Service**

Take Pang Dong Lai as an example. Their products aren't cheap—some are even a bit pricey—but their service is outstanding.

Consider buying durian. Consumers focus on two factors: taste and flesh yield. Durian prices vary widely, from a few yuan per jin to over twenty yuan per jin. The weight you pay for is "gross weight."

For the same 6-jin durian, a good flesh yield can reach about 50%, while a poor one is only 20%. The difference in edible flesh is significant. In other words, spending the same money, a "grateful" durian gives you 3 jin of flesh, while a "revenge" durian gives only 1.2 jin—more than double the difference. The same applies to taste.

At Pang Dong Lai, prices are higher, but the service is excellent. If the taste is bad, you can exchange it; if the flesh yield is low, you can exchange it. Consumers feel reassured and believe the premium is worth it. Thus, the sense of security brought by extreme service is a core competitive advantage.

Distributors are the same. How can we provide extreme service? How can we make channel outlets feel assured?

**Case 1: Efficient Visits and Relationship Maintenance**

1. **Regular Visits**: Establish scientific visit routes and cycles. Determine visit frequency based on outlet sales volume and importance, ensuring each outlet receives regular attention.
2. **Personalized Service**: Understand the needs and preferences of outlet operators. Provide personalized support such as inventory management advice, promotion design, and store optimization suggestions to strengthen relationships.
3. **Rapid Response**: Set up a 24-hour customer service hotline or online platform to promptly respond to inquiries and complaints, resolve issues like stock shortages and product quality, and improve service satisfaction.

**Case 2: Extreme Display and Presentation**

1. **Standardized Display**: Develop uniform display standards, including shelf position, facing, price tags, and promotional materials, to ensure products are prominent and easy to access, highlighting brand features.
2. **Dynamic Optimization**: Adjust display plans based on season, promotions, and consumer preferences. For example, add themed displays during holidays and prioritize new products at launch.
3. **Experiential Display**: Set up tasting or sampling areas in some outlets to enhance product presentation and boost purchase intent.

**Extreme Price**

How can retailers achieve extreme prices? Optimizing the supply chain and compressing operating costs are essential. The most common methods are shortening the procurement chain (direct sourcing from manufacturers) and reducing unnecessary expenses at the store level.

A warehouse discount store in Shanxi has taken this to the extreme. First, leveraging its chain's scale, it negotiates direct sourcing and cost contributions with manufacturers.

Second, it doesn't install air conditioning to save on that expense, allocating more funds to product procurement and price competition. It uses minimalist decor, such as bare floors and simple shelving, and even utilizes existing building structures to drastically cut renovation costs and shorten store construction time.

Overall, its prices are indeed the lowest in the area, attracting a large number of consumers.

How can distributors achieve extreme prices? How can they strengthen price competitiveness?

One viewpoint: Low-price competition never builds a distributor, but total cost leadership is an exception!

**Case 1: Optimizing Unloading Costs**

A distributor in Wuhan pays 0.3 yuan per case for unloading water. With annual sales of about 200,000 cases, unloading costs were 60,000 yuan per year. Due to warehouse terrain limitations, forklifts couldn't be used. After brainstorming, the team built a self-made unloading slide for 10,000 yuan, reducing unloading costs to 0.15 yuan per case, saving 30,000 yuan annually. This was the first step toward total cost leadership.

**Case 2: Direct Delivery to Quality Outlet Warehouses**

The traditional supply chain model is:

> 1. Products shipped from the factory;
> 2. Distributor warehouse;
> 3. Secondary loading and delivery;
> 4. Terminal outlets.

A simple calculation: Step 2 incurs total costs of 0.6 yuan per case, including: a) unloading cost 0.2 yuan/case, b) warehouse rent equivalent 0.3 yuan/case, c) warehouse staff wages and utilities/soft losses equivalent 0.1 yuan/case.

Step 3 incurs total costs of 1.4 yuan per case, including: sales staff base salary plus commission equivalent 1 yuan/case; vehicle fuel and wear equivalent 0.4 yuan/case.

The optimized supply model is:

> 1. Products shipped from the factory;
> 2. Terminal outlets.

Distributors guide products to skip their own warehouses and go directly to value outlets.

By eliminating intermediate steps, products go directly from factory to store, requiring only the cost of personnel order-taking. Thus, costs drop from 2 yuan/case to about 0.5 yuan/case, a reduction of about 1.5 yuan/case, undoubtedly creating huge competitiveness.

**Extreme Convenience**

People have three conveniences: life convenience, work convenience, and leisure convenience.

Around these three conveniences, many convenience stores have emerged. This retail system breaks free from price constraints, and high premiums can meet distributors' profit needs.

For example, a convenience store at the community entrance sells a bucket of noodles for 6 yuan, while a store 500 meters away sells it for 5 yuan. Many consumers won't walk 1,000 meters round-trip to save 1 yuan—that's the convenience premium.

The same applies to office building convenience stores, internet cafes, bathhouses, and other leisure venues.

What should distributors do? Large stores have high fees, many demands, and low overall margins. These three convenience systems are sources of sales and profit. Whoever establishes a presence first will reap the benefits.

**1. How to Approach Life Convenience?**

Key points for stocking community convenience stores:

- **Pilot first, then expand**: Focus on 10-20 quality stores initially to create model outlets. Secure prime shelf positions (e.g., near the cash register, middle shelf), set up posters and tasting events, and use strong sales data to persuade other outlets.
- **Optimize displays**: Concentrate product displays for visual impact, ensure sufficient stock with no empty facings, and use price tags and promotional stickers to highlight selling points.
- **Combine experience and sales**: Arrange short tasting sessions for beverages, launch simple promotions like "second bottle half price" or "buy two get one free" to drive first purchases, and agree on restocking cycles with store owners.
- **Handle objections**: Address issues like short-dated products, pricing, and margins promptly, providing clear answers to boost outlet confidence.

**2. How to Approach Work Convenience?**

For example, preparation for stocking office buildings:

- **Market research**: Understand the number of employees, age structure, and consumption habits (e.g., breakfast, afternoon tea, overtime needs) in target buildings to determine suitable product categories (e.g., ready-to-drink beverages, healthy snacks, instant meals).
- **Channel connection**: Communicate with building property management, convenience store operators, or vending machine managers to clarify stocking conditions, display locations, and cooperation models (e.g., revenue sharing, joint promotion support).
- **Product preparation**: Based on research, prepare small-size, portable products with packaging suitable for office settings (e.g., easy to carry and drink).

**3. How to Approach Leisure Convenience?**

For example, common leisure channels for FMCG include:

- **Cinema channels**: Snack and beverage stands inside cinemas. Consumers tend to buy snacks and drinks while watching movies, making this an important leisure consumption scenario.
- **Entertainment venues**: KTVs, bars, nightclubs, and arcades often have snack and beverage stands, suitable for alcoholic drinks and leisure snacks.
- **Scenic spots/amusement parks**: Stands in parks, theme parks, zoos, and museums offer snacks, drinks, and souvenirs, serving as key sales channels in leisure settings.
- **Sports venues**: Stands in public sports facilities (e.g., gyms, tracks, courts) where consumers buy snacks and drinks during sports and leisure, suitable for energy bars and sports drinks.
- **Hot springs/bathhouses**: Stands in hot springs, bathhouses, and foot massage venues provide drinks and snacks to meet consumer needs during relaxation.

**Final Thoughts**

Let's answer one question: How should distributors respond to online price harassment?

Of course, we should first file complaints and protect our rights. **More importantly, we must highlight our own advantages by leveraging the three extremes—such as providing professional services, localized support, and after-sales guarantees—to reduce price sensitivity through value differentiation and attract customers to choose legitimate channels.**


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## Citation metadata

- Publisher: New Distribution
- Author: 高级研究员 海游
- Published: 2026-04-04
- Canonical: https://xinjignxiao.com/en/articles/price-wars-how-can-distributors-break-the-deadlock-6db07b9a/
- Original source: https://mp.weixin.qq.com/s/YNjPZBZvkHGhXfKW-ViT_g

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