---
title: "Representing Yunnan Baiyao, Cold Sore, Lay's, Nongfu Spring, etc., with annual sales exceeding 100 million in a fourth-tier city, how did he do it?"
description: "\"Making money is getting harder and harder!\" Many distributors have such feelings. In the era of material scarcity, products were in short supply, and many distributors quickly expanded their businesses by following brands. Later, with the emergence of retail formats represented by KA stores and convenience stores, another group of people enjoyed the channel dividend. Now, affected by the overall environment, store traffic is declining, sales are falling, and supermarkets are closing... The living space of distributors is severely squeezed, and long-tail categories represented by daily chemicals are hit even harder. In Chengde, Hebei, there is such a distributor who has been in business for 24 years, witnessing the industry from the product dividend period to the channel dividend period and now to multi-party involution, and has his own unique insights and thoughts at each stage. He is Mr. Wen Liwei, general manager of Chengde Deliyuan Trading Co., Ltd."
author: "张雨薇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-07-14"
language: "en"
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# Representing Yunnan Baiyao, Cold Sore, Lay's, Nongfu Spring, etc., with annual sales exceeding 100 million in a fourth-tier city, how did he do it?

> "Making money is getting harder and harder!" Many distributors have such feelings. In the era of material scarcity, products were in short supply, and many distributors quickly expanded their businesses by following brands. Later, with the emergence of retail formats represented by KA stores and convenience stores, another group of people enjoyed the channel dividend. Now, affected by the overall environment, store traffic is declining, sales are falling, and supermarkets are closing... The living space of distributors is severely squeezed, and long-tail categories represented by daily chemicals are hit even harder. In Chengde, Hebei, there is such a distributor who has been in business for 24 years, witnessing the industry from the product dividend period to the channel dividend period and now to multi-party involution, and has his own unique insights and thoughts at each stage. He is Mr. Wen Liwei, general manager of Chengde Deliyuan Trading Co., Ltd.

"Making money is getting harder and harder!" Many distributors have such feelings. In the era of material scarcity, products were in short supply, and many distributors quickly expanded their businesses by following brands. Later, with the emergence of retail formats represented by KA stores and convenience stores, another group of people enjoyed the channel dividend. Now, affected by the overall environment, store traffic is declining, sales are falling, and supermarkets are closing... The living space of distributors is severely squeezed, and long-tail categories represented by daily chemicals are hit even harder. In Chengde, Hebei, there is such a distributor who has been in business for 24 years, witnessing the industry from the product dividend period to the channel dividend period and now to multi-party involution, and has his own unique insights and thoughts at each stage. He is Mr. Wen Liwei, general manager of Chengde Deliyuan Trading Co., Ltd.

**From daily chemicals to general merchandise, starting a one-stop category supply, covering more than 1,700 stores in a fourth-tier city, with a business scale exceeding 100 million.**

**Recently, New Distribution had an in-depth exchange with Mr. Wen Liwei. This article shares his practices and thoughts in the daily chemical field with you, hoping to bring you some inspiration.**

**Focusing on daily chemical categories for 24 years, doing fine and specialized work**

In 1987, Wen Liwei entered the supply and marketing cooperative system. In 1993, he followed his father to do daily chemical specialty business in the supply and marketing cooperative. In 2000, his father retired, and Wen Liwei chose to resign and start a business with his father, doing cosmetics agency and opening the first daily chemical specialty store, Jinyueliang. In the first year of entrepreneurship, they did less than 10 million. At the end of 2004, the retail market was fully opened to the outside world. Wen Liwei keenly smelled business opportunities and began to enter supermarkets in 2005, catching up with the golden period of KA development, enjoying the dividend of hypermarkets, and the business entered the fast lane, following the rapid development of the channel. Since then, the business scale has been growing at a double-digit rate every year for 10 consecutive years. By 2016, domestic supermarket giants began to stop expanding, and the growth brought by a single channel began to be limited. Since 2018, affected by e-commerce, the business of the entire hypermarket has been much worse than before. The CS exclusive products that Wen Liwei first did, such as Osman, were impacted to a certain extent, and the business stagnated. This also sounded an alarm for Wen Liwei. He realized that only doing skincare business in KA stores and CS stores has weak anti-risk ability and weak ability to respond to market changes. Coupled with the impact of online e-commerce, a single category can no longer balance cost expenditure. **Multi-category operation is the inevitable direction for daily chemical distributors.**

In order to save the business and stop the decline, Wen Liwei made a prompt decision and adjusted his business strategy: **Do fine products and complete categories.**

**1. Product subtraction: seek quality over quantity.** Sort out existing products, and based on the sales contribution of different SKUs, manufacturer support policies, market demand, etc., prioritize cutting products that don't make money or have no after-sales service from manufacturers. **In the first year, the number of SKUs was reduced from more than 4,000 to about 2,300, almost half eliminated. Since then, a 10% product elimination rate has been maintained every quarter.**

**2. Category addition: provide one-stop daily chemical category supply for stores.** Based on the experience and channel resources accumulated in skincare, expand from personal care to cleaning, kitchen and bathroom, paper and hygiene, oral care, etc., continuously supplement categories in the daily chemical field, deeply cultivate the daily chemical field, and improve coverage and deep cultivation of small and medium-sized stores through multi-category combinations. After adjustments, the business stopped declining and gradually recovered its growth trend. Up to now, it covers more than 300 KA and CS channels, more than 1,300 small stores, and 20 self-operated daily chemical chain stores, with a business scale exceeding 100 million, ranking among the top in Chengde's trading industry.

**10% product elimination rate every quarter**

**Always maintain competitiveness at the terminal**

Compared with other categories, daily chemical products have a characteristic of higher product complexity. Taking skincare products as an example, manufacturers will develop products with different functions and specifications for different skin types, age groups, genders, etc. At the same time, new technologies, new ingredients, and new processes are constantly emerging, and product iteration speed is extremely fast. In order to consolidate market positioning and always maintain competitiveness at the terminal, Deliyuan Trading **maintains a 10% product elimination rate every quarter**, which also means large-scale product selection. In the early stage, phone calls and visits from manufacturer representatives were endless, which gave Wen Liwei a headache. In order to free up more time to focus on the market and business model research, he **set every Wednesday as a fixed manufacturer reception day, which is also the company's internal product selection meeting**. In this way, reception and product selection can be solved together, and he and his employees can also free themselves from tedious daily affairs. Due to the special nature of daily chemical products, a long cycle is needed for judgment, especially for skincare products. Every Wednesday, manufacturer representatives bring samples to the company. After the presentation, two rounds of screening are conducted. First, at the product selection meeting, members including Wen Liwei will conduct the first round of screening on the packaging, smell, and feel of the product. Products that pass the initial screening will be taken home by employees for a period of trial use. Based on employee feedback, combined with fashion trends, consumer demand, manufacturer policies, profit margins, and other dimensions, it is decided whether to introduce the product.

**Complete product range and fast iteration are only one aspect; the core is whether the product can sell at the terminal.** Unlike other trading companies, Deliyuan Trading not only has a team of 100+ shopping guides serving large stores in the urban area, but also procurement participates in terminal channel planning and promotion planning, and needs to assist shopping guides in sales execution. Based on market sales feedback, regularly summarize and classify products. Specifically, referring to the contribution of market sales, referring to the brand's contribution to the market, combined with product attributes, usage functions, and business attributes, label products: what are profit products, what are traffic products, what are retention products, what are supplementary products, and what are elimination products. And according to different classifications, do product planning and resource allocation to help stores maximize profits.

**A good purchaser must not only know how to select products, but also understand the market. Only by understanding the market can they seize the market.** Only by going deep into the front line can they insight into market trends and specific needs of terminals in the first time, and understand the sales situation of products. Only by helping stores sell products can they truly be responsible for products and customers. What distributors can provide for stores is nothing more than two points: **products and traffic.**

**Large and complete product supply, front-end management with sales as the core, coupled with the customer relationship accumulated over 24 years of accompanying store growth, are the advantages of Deliyuan Trading, and the "capital" that truly makes it thrive is its control over channels.** Because it is strong enough in the daily chemical field, Deliyuan Trading basically enters stores in the form of full-contract or joint operation. Among them, full-contract is divided into full and half. Half-contract usually provides a single brand or single category contract according to store needs; for full-contract stores, Wen Liwei adheres to a mutually beneficial and win-win mentality, operates them as his own stores, and based on his years of experience in operating 20 daily chemical chain stores, helps stores do corresponding marketing planning activities and product planning.

**Future Outlook: Build a One-Stop Supply Chain Platform**

Having deeply cultivated the daily chemical category for 24 years, Deliyuan Trading has thoroughly understood the daily chemical category and begun to seek new growth points. For future development, Wen Liwei is very clear: **Horizontally broaden categories, vertically deepen channels, and build a one-stop supply chain platform.** Wen Liwei told New Distribution that in the past, when doing daily chemicals, they mainly focused on large stores and paid insufficient attention to small and medium-sized stores. But in the current market environment, the business of large stores is continuously shrinking. If the business wants to continue to grow in the future, they must focus on small stores. "Chinese society is a society of personal relationships. Small stores do business based on personal relationships. Even though many new business formats have emerged and have impacted the business of small stores to a certain extent, the demand still exists." Since 2023, Deliyuan Trading has been trying to lay out B2B business, gathering daily chemical categories, and jointly supplying goods to small and medium-sized stores with other distributors, improving coverage and deep cultivation of small and medium-sized stores. At present, the B2B mini-program has been launched and run, covering more than 1,400 small and medium-sized stores. But doing small stores also faces a problem: single-store output is low, daily chemical products are not high-frequency enough to cover transportation costs, which also means that categories must be expanded, and higher-frequency categories must support the platform operation. For example, through some best-selling beverages, convenient snacks, to balance early costs. Up to now, Deliyuan Trading has gradually connected with Lay's, Nongfu Spring, Quanyangquan and other leisure food and water beverage brands, and in 2023 acquired a trading company to access the grain and oil sector for canteen and catering channels. Step by step, they are broadening the boundaries of the business. In the future, they plan to empower small b-end through B2B business, help stores do traffic attraction, increase profits, and ultimately feed back their own business growth, forming a good ecosystem.

**Written at the end**

In the past more than 20 years, the FMCG industry has undergone earth-shaking changes, and the distributor group has also undergone several changes, from the initial "sitting merchant" to "traveling merchant", and now with the intensification of channel fragmentation, the original value delivered by distributors has been diluted, causing many distributors to be very anxious. And the core of anxiety, aside from external factors, is more about the uncertainty of their own business future. In the past, as long as distributors had funds, stores, and stable sources of goods, and did a good job of distributing products to stores, they could make money. But now, just doing these well is far from enough, and if you are not careful, you will lose money. **After anxiety, either lie flat and exit, or start to change.** In the era of oversupply of products, what is the core value of distributors? Where is the new ecological niche? In the past, distributors followed manufacturers, helped manufacturers do distribution coverage, and made money based on the profit system designed by manufacturers. Now, we see more and more distributors beginning to actively learn retail thinking, doing product portfolios, promotion planning, terminal pull around downstream small and medium-sized stores, and even beginning to explore new business models. The competition among distributors has also changed from rolling products, rolling prices, and grabbing resources to also competing on service and efficiency.

**From August 20 to 22, 2024, the "2024 6th China FMCG Conference" with the theme "Crossing the Shrinking Era" will be held grandly in Shanghai.**

**At the same time, the "3rd China FMCG Distributor Conference" will be held, where the "Report on B2B Platform Strategy Guidance for FMCG Industry Distributors" and the "2024 Survey Report on the Operating Conditions of FMCG Distributors" will be released.**

**Interested friends are welcome to scan the QR code to inquire about the details of this conference!**


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