---
title: "Small Distributors Can Grow Big, Big Distributors Must Become Strong, Strong Distributors Must Go Beyond! Here's How..."
description: "The food industry, closely tied to daily life, has a large overall market. After years of rapid growth, it now features increasingly complex competition and rising costs with shrinking profits. Distributors at different levels are concerned about how small ones can grow, big ones can strengthen, and strong ones can transcend their limits."
author: "陈彦华"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-01-13"
categories: "Dealer Operations, Management & Methods"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/OnAO8vDgwI3vGC2HVAQmCQ"
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citation: "陈彦华. “Small Distributors Can Grow Big, Big Distributors Must Become Strong, Strong Distributors Must Go Beyond! Here's How....” New Distribution, 2020-01-13. https://xinjignxiao.com/en/articles/small-distributors-can-grow-big-big-distributors-must-become-strong-stro-26d35ba6/"
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---

# Small Distributors Can Grow Big, Big Distributors Must Become Strong, Strong Distributors Must Go Beyond! Here's How...

> The food industry, closely tied to daily life, has a large overall market. After years of rapid growth, it now features increasingly complex competition and rising costs with shrinking profits. Distributors at different levels are concerned about how small ones can grow, big ones can strengthen, and strong ones can transcend their limits.

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The food industry, because it is closely related to people's daily lives, has a very large overall market. After years of rapid growth, it now exhibits the following characteristics:
**First, competitive methods are increasingly complex, with product wars, channel wars, and promotional wars becoming more intense and heated; Second, investment is increasing while returns are diminishing.** Due to fierce competition, various cost inputs are rising linearly, but profits are getting lower and lower, increasingly falling to the level of being a mere transporter.

Distributors who have struggled in the food industry feel these two points deeply. Many food distributors fondly recall the good old days when they didn't have to work too hard and still enjoyed substantial profits.

But reality is harsh; the wheels of history do not roll backward. In an industry environment of increasingly fierce competition and shrinking margins, **how small distributors can grow, how big distributors can become strong, and how strong distributors can transcend has become a pressing concern for distributors at different levels.**

**-01-**
**How Small Distributors Can Grow**

Being "small" is only a temporary and relative concept; in fact, many large distributors started small. So how can small distributors become large? Here are key points to note:

**1. Choose products that suit you**

Big brands are scarce resources, already largely divided among large distributors. Moreover, big brands have high requirements for distributors, especially financial strength, often occupying distributor funds. At the same time, channels also tie up funds, so for distributors with average financial strength, careful consideration is needed.

This is similar to choosing a wife; **matching status is important**. In reality, besides mature brands, many new food brands and manufacturers enter the market each year, and they have a strong need to build distribution networks. In such circumstances, **choosing manufacturers and products with vision, ambition, and potential will put your growth on the fast track.**

**2. Expand your sales network**

**The sales volume of 100 outlets naturally cannot compare with that of 300 outlets.** So-called large distributors simply control more outlets, thus moving more goods.

For example, the top seller of a certain grilled sausage appeared in the unremarkable Xuzhou market, which averages over 200 tons of monthly shipments and over 3 million yuan in sales. The reason for such high sales is the grilled sausage machines scattered throughout Xuzhou's streets and alleys. According to one distributor, he controls over 2,000 such machines—this is the principle of accumulating grains to form a mound.

While expanding the number of outlets, **also pay attention to outlet quality**. That is, good outlets should be well managed; a good outlet's sales can be 6-10 times that of an average outlet. With support from some good outlets, your network can be more focused and solid.

If a single outlet generates 200,000-300,000 yuan in sales, that's equivalent to the volume of a medium-sized distributor. If you manage such outlets well, how can you not grow?

**3. Increase delivery vehicles and sales staff**

Chinese people have a tradition of buying houses and land after making money, but for distributors in business, it is crucial to use limited funds wisely to maximize their value.

Once you've selected good products and increased them, and your network is expanding, you naturally need to purchase delivery vehicles to allow your network to sink and expand. With more outlets, staffing must keep up; otherwise, if sales and service become disconnected, it directly affects sales and indirectly affects customer relationships. Therefore, **appropriately increasing delivery vehicles and personnel is a necessary condition for small distributors to grow.**

**-02-**
**How Big Distributors Can Become Strong**

So-called big distributors typically have advantageous brand resources, extensive networks, and numerous vehicles and staff. However, many big distributors are large but not strong, with significant sales but little profit, essentially earning only the wages of a transporter. So how can big distributors become strong? Note the following:

**1. Reasonably adjust your product mix**

Top-tier products do have high sales volumes, but manufacturers often invest heavily in advertising. **Manufacturers focus on pulling consumers to buy, not pushing distributors to do market development.** The strategy of top-tier brands is: with so many people wanting to buy, if you don't carry the product, many others will. This way, top-tier manufacturers achieve control over distributors by stimulating consumer purchases.

Therefore, profits from top-tier products are very thin. However, besides a few well-known brands, there are many lesser-known or average-known manufacturers and products. These manufacturers, due to limited resources, cannot invest heavily in advertising, but they often offer distributors larger profit margins and support. Thus, profits from these products are often more than three times those of well-known products.

Therefore, **by leveraging the sales network built by strong brands to distribute lesser-known products, you can fully release channel power and create more profit.**

**2. Strengthen channel and inventory management**

Large distributors have many outlets and are busy with routine deliveries, unable to implement scientific channel management. In fact, **tapping channel potential is an important method for distributors to become strong.**

So-called channel potential tapping involves classifying channels and allocating support resources based on sales figures, resulting in a 1+1>2 channel effect, further unleashing channel potential and power.

Large distributors often handle many categories; if inventory management lags, it can lead to large amounts of short-dated or even expired products. Many top-tier manufacturers' contracts stipulate no returns for non-quality issues.

Therefore, **distributors should abandon traditional manual operations, introduce sales and inventory management software and platforms, promptly grasp purchase-sale-inventory data, strictly follow the first-in-first-out principle, prevent short-dated products, and eliminate expired products. This avoids unnecessary losses, and avoiding losses is creating profit.**

**3. Strengthen sales staff training and management**

Success depends on people; their quality and level determine outcomes. Many large distributors are busy with daily affairs, neither focusing on their own improvement nor on enhancing their sales staff's skills. Thus, many distributors wonder: I'm busy all day, but why hasn't performance improved?

Actually, the problem lies with people! **Training is the essential path to improve sales personnel's quality and skills. Through training, cultivate a shared value system, and let frontline employees master methods and skills. As long as your employees' standards improve, it's hard for performance not to rise!**

There was a distributor whose office had comprehensive management systems for sales personnel. What caught my attention most was the morning meeting system, which required all employees to loudly shout the company's goals and philosophy at each meeting.

This trading company, established only five years ago, has achieved sales of over 60 million yuan, with more than a dozen delivery vehicles and over 60 employees. Therefore, **strengthening management of sales personnel, keeping them passionate, and continuously improving their work level will make the path to becoming strong smoother and faster for large distributors!**

**-03-**
**How Strong Distributors Can Transcend**

So-called strong distributors control numerous brand resources, have extensive networks, strong channel control, and operate as companies. However, strong distributors also encounter growth bottlenecks: limited regional market potential, hitting the ceiling, and almost no room to tap. So how can strong distributors transcend? The following points are worth learning:

**1. Move upward into industry**

A certain industrial boss was originally a food distributor. After reaching a certain scale, he identified a promising project and decisively started a factory. Strong distributors, with rich market operation resources, can implement flexible market tactics and have relatively complete sales networks locally, so entering industry often comes naturally.

Of course, not all strong distributors are suited for industry. First, you need ambition; second, investment is large; third, the time cycle is relatively long. But once you succeed, you achieve the leap from distributor to entrepreneur.

**2. Move sideways into OEM/private label**

Many distributors find industry troublesome, with high investment and risk, but their sales networks are very complete, so they do OEM—**creating their own brands and products will significantly increase profit margins. This is the popular asset-light operation.**

A certain sugar and wine distributor does OEM with many white liquor manufacturers in the industry, thus expanding its sales network and regions, and naturally increasing profits. Once strong distributors enter private label, they gain exclusive resources and complete the transformation from distributor to brand operator.

**3. Move downward into retail**

So-called retail means owning your own retail terminals, no longer just being a distributor, but transforming into a retailer.

Although strong distributors are powerful, channel fund occupation is still inevitable. If they develop their own retail terminals, they can not only increase profit margins but also solidify control over local retail resources, reduce bad debts, and even occupy other brands' distributor resources. **Strong distributors have good brand and manufacturer resources and complete delivery capabilities; once they enter retail, they will have unique market competitiveness.**

**The only constant in this world is change. The weak can ride the trend to become strong, and the strong will inevitably fall behind and weaken. In today's increasingly competitive food industry, what you choose determines what you become.**

**Once the tip is adopted, a reward of 400-2000 yuan will be paid.**

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## Citation metadata

- Publisher: New Distribution
- Author: 陈彦华
- Published: 2020-01-13
- Canonical: https://xinjignxiao.com/en/articles/small-distributors-can-grow-big-big-distributors-must-become-strong-stro-26d35ba6/
- Original source: https://mp.weixin.qq.com/s/OnAO8vDgwI3vGC2HVAQmCQ

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