---
title: "Small dealers rely on insight, medium dealers on professionalism, large dealers on management!"
description: "A dealer with annual sales of 200 million is not necessarily better at management than one with 50 million. The FMCG distribution industry is highly diverse, and management levels are influenced by product categories, channels, and brands. As market dividends fade, dealers must focus on refined management, with organizational management being the most critical task, especially in managing people, as they are the core resource."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-08-05"
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# Small dealers rely on insight, medium dealers on professionalism, large dealers on management!

> A dealer with annual sales of 200 million is not necessarily better at management than one with 50 million. The FMCG distribution industry is highly diverse, and management levels are influenced by product categories, channels, and brands. As market dividends fade, dealers must focus on refined management, with organizational management being the most critical task, especially in managing people, as they are the core resource.

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Will a dealer with annual sales of 200 million necessarily be better at management than one with 50 million? Not necessarily. The FMCG distribution industry is highly diverse. Different product categories, channels, and brands all affect a dealer's management level.
For example, compare a beverage dealer with annual sales of 50 million and a liquor dealer with annual sales of 200 million. If we measure management level by "the enthusiasm of frontline employees," it's hard to say which is better.
Last month, Li Hua (pseudonym), the general manager of a trading company in East China with annual sales of several billion, talked about business management. He told me that for the past six months, they had been undergoing organizational reform and learning from a peer dealer with annual sales of 300 million about the "business partner" model. After hearing this, I was not only surprised but also admired their courage and determination to change.
In the past, when we discussed dealer management, the usual perspective was from the manufacturer's viewpoint: how the manufacturer's city manager manages the dealer, maximizing capital occupation, maximizing inventory pressure, and standardizing terminal visits.
Many manufacturers also instruct local business managers to extend management not only to dealers but also to dealers' salespeople, helping dealers set KPI assessments. With different goal orientations, the results can be unsatisfactory.
Why do dealers need management?
In fact, many dealers do not understand organizational management. Why? The role of dealers emerged around 1990 with the reform of commercial circulation. Who became dealers? Typically three types: first, those from the planned economy's supply and marketing cooperatives; second, shop owners who evolved; third, those who "jumped into the sea" (started businesses) and engaged in buying and selling.
At that time, the dealer business was still a "small business." Dealers were often not professionally trained, handling things as they came.
Despite lacking professional training, they continued to grow mainly because they seized market dividends. A former Arawana (Golden Dragon Fish) dealer told me that in the early years, being a dealer for that brand was simple: as long as you had money and could get goods from the manufacturer, you could grow the business. Some Arawana dealers in Zhejiang exceeded billions in sales during that period.
The scarcity of material goods and rising economic levels gave dealers a dividend era. Additionally, grabbing a good brand, choosing a good category, and having courage were enough to boost sales.
When sales are skyrocketing, who talks about management?
Of course, those dividends are gone now. Without dividends, it's time to return to the essence of business and create value, whether by providing more convenient services to downstream small shops or by providing product implementation services to upstream brand owners.
With dividends gone, you need to do fine work. To sustain growth, dealers must compete for terminals and markets with strategy. Previously, it was like virgin land, easy to cultivate. Now, there's almost no empty land; you must work your existing plot finely and thoroughly, or even fight for more. Battles require strategic deployment, and the key behind that is organizational management.
The current market stage demands that dealers emphasize refined management.
Besides the market stage, there are also the operational dilemmas of dealers themselves. Teacher Liu Chunxiong once summarized the four stages of a dealer's entrepreneurial journey:
First stage: Mom-and-pop shop. Sales can't be large, and too many customers overwhelm them.
Second stage: Couple plus helpers. Helpers are mainly relatives who can only do odd jobs and have little effect on market development.
Third stage: Boss plus salespeople. Sales may expand, but they dare not hire very capable salespeople.
Fourth stage: Boss plus business supervisors plus sales team plus service staff plus accountant. The market can expand infinitely with company-style management and specialized division of labor.
The dealer development process is one of increasing personnel. Many dealers stagnate at the third stage and cannot leap to the fourth. Even if they reach the fourth, management is often chaotic.
Small dealers rely on insight, medium dealers on professionalism, and large dealers on management. But how to manage? Dealers are usually at a loss.
People are the most important resource.
Returning to the essence of business, the distribution model is a game. Games require negotiation, and negotiation requires people. We can see that the core of a dealer is "people," especially frontline sales staff.
Of course, you could say every company's core is people, but the nature of the distribution business determines that "people" are the most critical. Platform companies build infrastructure with people; users interact freely, and as users grow, a market loop forms without much human intervention—just design mechanisms and manage user operations.
Upstream brand owners develop good products, build strong brands, and set up suitable channels. Their growth core is continuously outputting good products to attract more consumers. Downstream retail stores depend on location-based foot traffic. A good location and consumer experience bring long-term business.
But in the distribution industry, almost every transaction must be obtained by frontline salespeople. Even so-called "customer relationships" are built over time by salespeople; once they leave, the relationships are gone.
Therefore, a dealer's "people" are far more important than in any other enterprise.
Do dealers know people are important? Certainly. In daily work, they pay close attention to sales staff. But attention doesn't guarantee good results.
The awkward situation in managing salespeople is: they don't know how to use or reward them; they dare not manage or punish them.
That's why the general manager of a multi-billion trading company sought organizational management advice from a dealer with 300 million in sales.
To summarize: the market development stage requires dealers to have management capabilities, but their non-professional backgrounds often lead to a lack of proper management methods. At the same time, the nature of the business determines that people are the most important resource. These three factors combine to make organizational management the most important task for dealers at this stage—no exceptions.
If people are managed well, work can be done finely; if people are managed well, business can sustain growth.
How should dealers manage business organization?
Before discussing salesperson management, let's talk about functional department management. Undeniably, 90% of dealer organizational structures are sales-oriented, with finance, administration, and logistics as functional departments.
But that's not enough. Finance, administration, and logistics should all be sales support departments, providing ample ammunition and complete services to the front-line sales department. Many dealers overlook this.
First, there's the mindset: do these functional departments, in their daily work, stand from the "sales first" perspective and sincerely serve sales? Not necessarily serving tea and water, but at least handling expense checks, salary payments, warehousing, and distribution promptly for sales staff, rather than creating obstacles or acting like favorites because they're close to the boss.
Take finance and administration as examples. Recently, in East China, I met a Mengniu dealer with annual sales over 100 million. Their finance manager shared how they manage "large inventory age," design KPI assessments, and control expense allocation.
A qualified financial person must understand the business. Finance not only needs to keep accounts and pay salaries but also design financial processes for sales: "fewer forms, fewer trips, faster processing."
As for administration, dealers might think it's completely unrelated to business, just basic internal work. I used to think so too, but in June, I attended a speech by Ms. Xu Min from Anshan Hongye Hengda, which changed my mind.
At Hongye Hengda, every administrative position can clearly describe their duties. Moreover, although they may not understand specific business, each knows clearly how their work can make money for the company and how to save money. Where the profit is, where the savings are. When administrative departments know this, they understand how to provide service and support to sales staff.
The core of organizational structure design is how to maximize the provision of "guns and ammunition" to the sales department, ensuring the front-line team is "fed, warm, and motivated" during battles.
That's the management logic for functional departments.
"Salespeople are getting harder to manage, and their enthusiasm is declining..." This is a common complaint among dealers. Business organization management is crucial to a dealer's success.
New Distribution believes that organizational assessment and incentives for sales staff can be divided into three levels:
First, equity and dividend incentives for senior management, for founding partners and when introducing professional managers, how to distribute the trading company's profits.
Second, business partnership incentives for middle management. Once a trading company grows and operates multiple brands and categories, each brand and category requires different market tactics. Dealers may not have time to formulate market policies and terminal management methods for each brand. At this point, the importance of middle-level backbone is self-evident.
The key to business partnership incentives is to fully leverage the enthusiasm of middle-level backbone. They should stand from a category perspective to help the trading company gain a foothold in terminals.
Third, performance incentives for frontline basic staff. Frontline staff are the largest group and directly generate profits. Dealers can't follow them around all day to see how they communicate with store owners, sell goods, or build relationships. Since real-time monitoring is impossible and communication with store owners can't be strictly standardized, it's crucial to give frontline staff products, tools, scripts, and policies, and then ensure they align with the company's stance to maximize sales.
Based on these three levels, New Distribution has specially designed a themed forum at the "2019 China FMCG Conference" held from August 20-23. We invited experts and outstanding dealer representatives to share their practical experiences on executive equity dividend incentives, middle-level business partnership incentives, and frontline performance incentives, providing dealers with a set of actionable methods.
Most dealers started as business-savvy individuals. In today's environment, with dividends gone and markets fought over, dealers must clearly design organizational management to survive and grow. In organizational management, incentive mechanisms for business are the most critical.
When a dealer works alone, efficiency is highest. But when working with a group, to maximize operational efficiency, you must consider how to design incentives, assessments, rewards, and punishments to fully mobilize the enthusiasm of the group to compete for markets and terminals!


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