Are you heading for a dead end or seeking an innovative way out? Obviously, the latter! However, before finding a way out, you must first consider why you ended up at a dead end? In the FMCG industry, food and beverage distributors typically act as delivery agents, lacking the essence of distribution; whereas in the cosmetics industry, distributors are called agents but often perform the role of distributors. This is the difference between having no team and having a team to drive sales! Despite the differences, both complain of exhaustion. They almost turned to micro-commerce... When the role caught in the middle becomes increasingly undervalued, they express confusion about their way out. "No middlemen to take a cut, passing savings to consumers"... Such fairy tales are heard every day. However, even if products go directly from manufacturers to consumers, without distributors and retailers, prices are not necessarily cheaper. Some savvy consumers even joke: "No middlemen, but definitely more profiteering!" Look at cosmetics and health products sold directly through WeChat public accounts or online platforms or via micro-commerce; most are priced far higher than traditional channels. Getting rid of distributors is actually unlikely, at least not fully achievable in the next few years. Because efficiency would suffer greatly, both in terms of capital and execution. Distributors have value, but that doesn't mean clinging to old concepts and waiting for spring to return. On the contrary, the concept of distribution among distributors should become increasingly strong, even surpassing manufacturers, because it's their own territory. For manufacturers, the country is vast, with diverse market environments and customs. Even with big data analysis, they still face the challenge of catering to diverse tastes. To overcome local incompatibility, they must rely on local distributors. Additionally, distributors are key partners in capital turnover, especially for small and medium enterprises without capital support. Let's take the cosmetics store (CS) channel as an example to analyze the dead end and way out for distributors. I. Dead End: Just Delivery! 1. No Team but Have Network In May this year, at the Shanghai Beauty Expo, I met an agent from a northern city. He picked up a mask with an imported barcode and all-English packaging, claiming it was foreign, and asked me if he should take on this brand. I asked him, "Do you have a team?" "I used to, but later I disbanded them because of high costs." So, you don't have one. "But here's my thought: I sell laundry detergent and household items, supplying about 200 county and township stores in my area. So I thought I could take on this mask and supply them too." Let me ask you: Does a mask require service? Besides, this is an unheard-of brand, even if it looks foreign, and its price is far higher than other mask brands in township stores. Without promotions, guidance, or trial experiences, what's the value? "Well..." So, whether it's worth taking on this brand, I won't say; you think it over slowly! Does laundry detergent need service? It can go either way, but it's better to have it. However, I believe there are still many such "speculative" agents. Agents who see themselves as delivery agents, without core value, just earning that pitiful and primitive middleman margin. Ask yourself: If not you, who would the manufacturer dump inventory on? Who else would they bully? It's about leverage... 2. Have Team but No Management Next are agents with outdated thinking. They have teams, but they're all focused on sales, neglecting the meaning of management! What is management? It will be explained in the "Way Out" section. They lament the tough times, hard business, immense pressure from brand owners, and some savvy store owners taking alternative routes, bypassing agents to directly contact stores, or even registering their own brands, finding an OEM factory in Guangzhou, and happily selling in their own stores... Amid such confusion, agents and their teams focus all energy on shipping goods. They use soft and hard tactics to persuade their downstream stores, and the game rules start a vicious cycle, tired and complaining at the same time! II. Way Out: Strengthen Distribution! Many distributors worry that now slightly well-known brand manufacturers are partnering with top 100 stores, giving them the discounts originally given to distributors, signing direct supply agreements. As a result, the scope for our role and sales narrows significantly, but the tasks assigned by manufacturers increase year by year. How can we continue cooperating? But have you carefully observed whether, after a year, those brands directly supplied to top 100 or top 10 stores have performed better than when they went through you? Or, nationwide, what share of total sales does the brand you represent directly supply to top 100 stores? Going deeper, when brand manufacturers directly supply to top 100 stores, they need to provide services, not just supply goods. It's far from the "exclusive venue" channel popular a decade ago—operating at rock-bottom prices. They give you goods at 20% or 18% of the price, and it's up to you to sell them, even with terminal prices fluctuating according to the manufacturer's pricing. If you factor in the costs of services provided by the brand, such as personnel salaries and travel allowances, these hidden costs are actually not much less than going through an agent, who then sends staff to stores for activities. It's just that if a brand doesn't trust that a certain region can effectively operate the brand locally, they can bypass and directly approach large-scale, high-coverage stores to secure better positions and more targeted promotions. So, this is a management issue, and it's precisely what many agents currently lack. Distribution, as the name implies, means management and sales. Finally, I realize why distributors in the daily chemical industry are not called distributors but agents—perhaps because they lack the management role? Currently, most agents in the CS channel have sales but no management. Even if they have teams, they don't maximize the brand's potential, and they bring crises to their own companies. So-called management refers to the administrative level. You give meaning to a brand's positioning for consumers, and through your team's efforts, you translate it onto the store's beauty advisors (BAs), letting them use their charm to communicate it to consumers. Management is a process, a pleasant one, while sales is just the result, the natural outcome. Sales itself has no value! You need to be aware of this... For example, companies with annual sales under 100 million always prioritize the sales department, hiring a self-proclaimed capable, eloquent, and resourceful sales expert, giving them the title of director, thinking that will smoothly sell products. In reality, it's just a warehouse transfer, moving goods from the brand's warehouse to the agent's warehouse, far from reaching stores or consumers. But for the marketing department that helps develop and design products, they think it's just a matter of hiring a few employees for a few thousand yuan each, and the boss himself is an excellent product manager... Think about it: How many sales directors understand the product's sales performance among consumers, rather than just comparing last year's sales among peers? How many sales directors discuss at agent dinners how to craft specific selling points for their products, or how to deeply coordinate product displays and promotions with store staff? For them, the biggest mission is to chase payments. Product is the marketing department's job! But the marketing department is too small, far from senior management, and can't even reach the agent's dinner table... Actually, this is normal, because for small and medium enterprises in the survival stage, without sales to bring in money, how can they survive? But this phenomenon will gradually fade because the space is narrowing. For manufacturers who have risen from humble beginnings to become domestic first-tier brands, it's completely different. They gradually understand that sales is just sales, not marketing; there's a difference... So, they start having brand general managers and brand directors, and the marketing department becomes stronger. Sales directors become marketing directors. With the concept of marketing, professionals go to the market, visit stores to listen to market voices, observe competitor trends, and then adjust product packaging strategies, marketing plans, etc., and implement them through training departments, from pre-launch training to in-activity promotions, post-activity analysis, summary, and adjustment... All this, condensed, is equivalent to the concept of management in the agent's own region! So, a true distributor is like a brand's branch office in that area, complete with all functions and performing well. Although you may represent multiple brands, always remember you need to excel in at least one. The value agents should pursue, simply put, is: 1. Achieve the largest scale in the province; 2. Achieve the top position for a certain brand nationwide; 3. Achieve the top position in a certain category across all brands; If you achieve any of these, it proves your team is strong and reliable, building your own fortress that others can't easily enter, and brand owners can't easily replace you. If you can't achieve that, strive toward this small goal, even top three. In that case, not only will agents with sales but no management face a dead end, but even brand owners will too! We should think generously: The way out for distributors is actually the way out for brand owners... This viewpoint is not absolute, for reference only. Welcome peers to leave comments and exchange ideas! About the author: Gu Ge, brand thinker, contributor to the "Gu Ge Du Shu" WeChat public account! A 4A creative, formerly responsible for brand planning at Danz, Tiandi No.1, etc. Specializes in "reverse thinking" creation! For "content interaction, copywriting planning," follow the "Gu Ge Du Shu" public account. -END-