Click to read the original text for details For distributors, terminals are a crucial link; they are where products become consumer goods. In the process of market operations, is it necessary to redo this link? Yes! Some distributors might ask: How much longer can the distributor business last? How could it possibly be worth redoing? When distributors say this, I understand what they mean: I'm in the oral care category, paper products, or snacks; young people are buying online, and offline business is shrinking. This trend is irreversible, and offline sales are declining. How can there be talk of redoing terminals? I believe this is how the vast majority of distributors understand their business. But looking back, offline business capacity is decreasing while online is increasing. Does that mean there are truly no opportunities offline? Last September, I visited a Jinluo distributor in a certain area. He told me that in the past year, their business was only over 10 million, but this year they could achieve over 90 million. That's nearly a tenfold increase in offline business, which can almost be described as terrifying. How did he do it? In fact, the approach is not new at all: redo the terminals all over again. Previously, there were only a dozen or so in-store promoters; now there are 200 full-time promoters. How exactly? One store at a time, they conquered them! For example, in a certain store, Shuanghui's ham sausage category was 70,000-150,000, while Jinluo was only 10,000-20,000. First, let frontline salespeople focus on this store for a period, improve the shelf display, and arrange the merchandise. When sales reach over 20,000, and costs can be supported, then set up a full-time promoter. On weekends, they do tasting and hawking, with salespeople practicing, continuing to grab share in every sub-segment. According to the distributor boss, it feels like being in battle every day at the terminal stores. This is a real case of redoing terminals. 01 No More Increment, Only Grabbing Existing Share Some ask: What is the future for distributors? There is only one way out: grab existing share and become a big distributor. First, let's talk about grabbing existing share. Indeed, as most distributors believe, the capacity of most categories is declining, especially in daily chemical, paper, and washing products. On one hand, young consumers' habits are shifting online; on the other hand, even with consumption upgrades and diverse, personalized needs, these scenarios still occur online. On offline physical shelves, it's hard to impress consumers with just static products and familiar names. Online, through short videos, host interactions, social recommendations, and content seeding, a consumer who had no plan to buy toothpaste might become interested because of a scene shown by a short video blogger, hitting their pain point, and then making a purchase. Last year's e-commerce boom saw a large portion of increment online. Now online traffic has peaked, and major brands are rushing to grab offline. Offline existing share is already tight, and now it's even more about grabbing. What to grab? Grab the sales of other distributors in the same category. I often used this example: For dairy giants Yili and Mengniu, does the sales volume of these two brands in a regional offline market depend on the brand or the product? Frankly, it doesn't matter much. Both Yili and Mengniu are household names; consumers can choose either. So what is the key to winning in a regional market? It's the operational capability of the distributors of these two brands. Whichever has better operational capability, that brand's business will be better. Distributors should not just stare at the brands they represent and complain: "11.11 is having a special promotion online again, such low prices, how can we do business?" Perhaps while you're complaining, your neighboring distributor has poached one of your stores, directly affecting a core store that loses 2 million/year in sales. If you really calculate by business amount, the average business of a certain brand online in your city is negligible. If business is not good, it's not that online is stealing your business, but that neighboring distributors are stealing your business. From another dimension, when your peer distributors are complaining, if you seriously focus on digging out single-store output, you can also gain your own business increment. 02 What's Behind Becoming a Big Distributor? A couple of days ago, I noticed an interesting phenomenon. When you ask distributors what industry they are in, 99% will say: I'm in beverages, I'm in paper products, I'm in laundry and daily chemicals... Almost no distributor thinks from the heart: I'm in the commercial circulation industry, the agency industry... Frankly speaking, whether it's snacks, paper, or condiments, these are just carriers of business. The essence of a distributor's business is transmission: purchasing, moving, and selling goods. What goods matter, as it's the foundation, but it's not the only thing in a distributor's business. The only thing that matters is the downstream store customers, and the efficiency of purchasing, moving, and selling. In the past, brands came first, then distribution. Many distributors grew their business by riding on brand dividends and category growth, overly relying on upstream. Being used to manufacturers giving business, the end result is: lack of initiative. Strictly speaking, when a distributor reaches a certain scale, with financial strength, operational capability, and stable customers, they should think about how to do well in their local area. How to do well in your own turf? Set your sights on the commercial circulation business of a city, not just a category or a manufacturer. Let me give a simple example: Suppose the paper products category has a 50 million share in a regional market, and you achieve 30 million, holding 60% share. Due to intense competition among brands in the category, even if you put in 200% effort, you probably can't grab 40 million in sales; other brands are not pushovers. At this point, what should a distributor do? Maintain stability, focus on defense. Copy and transfer the operational capability of managing this brand to other brands and categories, broaden your horizons, and look at the commercial circulation business. Through a combination of multiple product lines and categories, continuously reduce the operating cost of a single brand and improve the comprehensive output per person and per store. When the offline share of paper products drops to 30 million one day, and your competitors, because they operate a single brand, can't withstand the cost pressure, then you can integrate, harvest, or even monopolize. Summary: In the past, why has "New Distribution" always emphasized that distributors should become big? Because behind value transmission, there is only scale effect; there has never been a small and beautiful business. Brand owners are value creators; they can say they target a specific type of target group, meet niche needs, and be small and beautiful, but distributors can only become big. Of course, when I say big, there is a logical order. It's not about expanding categories and adding product lines from the start. If you can't achieve the first or second place in a category, it means there's a problem with your management and operation capabilities. If management is problematic, even if you add more categories, you'll only scratch the surface. First, focus on one brand and make it big, achieving the top three in a regional market. The method is: redo the terminals all over again, conquering one terminal at a time. Then focus on one category and make it big, using channel reuse and resource reorganization to attack a category. At this point, train a good team, then carry out organizational fractalization, and expand categories through a category partner organizational structure. This is the correct business development path for a regional distributor. Forget the impact of online e-commerce, reduce dependence on upstream brands, reorganize your team, and redo terminal stores. When you truly practice this, you'll find that offline business is much bigger than you imagine! -END-