The Sugar and Wine Fair is almost upon us again. Today, let's talk about what kind of products distributors should choose. What are the three levels, or tiers, of product selection for distributors?
First Level: Starting from the Product Itself
My neighbor, A Peng, runs a small street-side grocery store. His criteria for selecting products are very clear: good quality and significant efficacy. A Peng's approach is essentially starting from the product itself, which is a common and practical criterion for many distributors. However, this is only the first, or most basic, level of product selection.
When a distributor selects products based on the product itself, they consider the following factors:
Product quality reliability: Quality is the essence of a product's "life." Products without quality assurance will struggle to win consumer favor and may even "backfire" on the distributor, causing numerous hidden problems. Distributors typically judge product quality reliability using three criteria: whether the product has obtained relevant quality certifications (or certificates); the condition of components and raw materials; and the actual "testing" by consumers and the distributor themselves.
Actual efficacy: Efficacy is mainly reflected in two aspects: immediate effect and lasting effect. "Immediate effect" means that after purchase, consumers can enjoy or feel the product's actual benefits in the short term, which is very evident in the pharmaceutical and health products sector. "Lasting effect" refers to the benefits consumers feel after using the product for a period, such as the actual changes seen by women who buy cosmetics, skincare, or weight-loss products.
Appearance and packaging design: For some products, such as fashion gifts or sexy lingerie, consumers care greatly about appearance and packaging, and distributors are well aware of this.
Product concept appeal: Some products are simple and ordinary, but manufacturers can create a mysterious aura through professional selling point extraction and concept hype, making them more attractive to consumers and ensuring higher profits for distributors. Such products are favored by distributors. The extremely popular Nao Bai Jin (Brain Gold) from 2002-2003 is a typical example.
Products with reliable quality, significant efficacy, novel design, and effective concept hype can certainly bring more returns to distributors, but having a good product alone is not enough. Distributors also need to consider other factors, such as the manufacturer's brand, overall strength, and credibility, which we will discuss next.
Second Level: Considering the Manufacturer's Perspective
While starting from the product itself can help distributors select products with good quality and efficacy and achieve certain sales, it cannot guarantee appropriate returns because the product is only one factor in marketing. To gain actual profits, distributors must also consider issues from the manufacturer's perspective.
When selecting products, distributors must consider the following manufacturer factors:
Overall strength: Including financial strength, production scale, and R&D capabilities. Manufacturers with strong overall strength are more likely to ensure product quality and efficacy, reducing the distributor's operational risk.
Brand awareness and reputation: This refers not only to the manufacturer's overall national influence but, more importantly, the brand's awareness and reputation among local consumers. Distributors choosing products with a strong local reputation can accelerate sales cycles, improve capital turnover, and reduce operational risks.
Policy incentives and profit margins: Distributors should try to choose products with higher returns and lower expected risks, which are closely related to the policies offered by manufacturers. If the manufacturer grants exclusive regional agency or provides differentiated products, distributors can enjoy substantial profits; otherwise, profit margins may be narrow.
Credibility: Distributors work hard mainly to earn profits; sales are just a prerequisite, and the key is to realize returns, which depends on the manufacturer's integrity. When selecting products, distributors must investigate the manufacturer's past credibility; otherwise, they may end up working for nothing.
Market support: Distributors should also consider the manufacturer's planned investment in promoting the product, including market development fees, channel construction and maintenance, advertising, promotional support, and other expenses. Products from manufacturers with strong market support are undoubtedly the "favorites" for distributors.
Service guarantees: If manufacturers can provide timely supply, market information, and after-sales service, distributors can eliminate many worries and focus on distribution.
However, considering the manufacturer's perspective is only the second level of product selection. As an important independent entity in the business field, distributors have their own development plans, which are determined by themselves.
Third Level: Starting from the Distributor's Own Perspective
Distributors must also select products from their own perspective, deeply and comprehensively choosing products that suit them. This is the best criterion for product selection.
From the distributor's own perspective, the selected products must meet the following characteristics:
Products within the distributor's business scope: Distributors should not easily choose products they are unfamiliar with. For example, FMCG distributors should not easily try durable consumer goods; large appliance distributors should generally not choose small appliances.
Familiarity with the product: In recent years, with intensifying market competition, some distributors adopt "diversification" strategies to avoid risks. Low-end distributors who originally sold street stall goods are now operating high-end products, while some high-end distributors who won consumers with their refined image are selling low-end products at low prices, damaging their own image. Their intentions are good, but the outcomes are often disastrous.
Alignment with the distributor's "traditional" positioning: Every product has its target consumer group, and distributors also have a clear "positioning" for themselves. To select suitable products, the chosen products must align with the distributor's positioning.
Consistency with the distributor's business philosophy: We know that every product has a life cycle, and distributors can be divided into short-sighted and far-sighted types. A product that requires long-term promotion and sustained operation is more suitable for far-sighted distributors, not short-sighted ones. Conversely, a product with short-term high profits is more suitable for short-sighted distributors. Different business philosophies and future plans lead to vastly different product selection criteria.
In summary, the best product is not necessarily the most suitable for a distributor. This is a simple truth. When selecting products, distributors must consider not only the product itself but also the manufacturer's various aspects and the distributor's own business philosophy and style. Only then can distributors choose truly "suitable" products.
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