Source: Teacher Liu's Forum (ID: liuchunxiong1964)
I. Laws of Growth
Law 1 The main obstacle to a dealer's development is the "founder's trap"
In the early stages of entrepreneurship, the founder's courage and determination are the most primitive forces supporting the enterprise's survival in its most fragile state. At this time, the enterprise's growth hinges on the boss's single thought; "I" (the boss) is greater than "we" (the enterprise and all its people), and "we" is determined by "I". The boss's style, charisma, and consciousness decide everything. At this point, the enterprise's development relies on the boss seizing opportunities on the front line, and in a sense, it depends on the boss "playing speculation" and "playing tricks."
When the enterprise reaches a certain scale, it falls into the "founder's trap," where the spiritual strength that once supported the enterprise's development may become an obstacle to its continued growth. As the enterprise expands, the relationship between "I" and "we" undergoes subtle changes.
Previously, the boss was the absolute pillar of the enterprise; without the boss, nothing could function. Now, the boss's role has greatly diminished, and many things are done without the boss's knowledge.
Previously, decisions might be made solely by the boss, and even if the boss wanted to consult others, there was no one suitable. Now, a proper decision-making team may be needed, and the boss must promote democratic processes.
Previously, the boss's core team consisted of a few loyal "henchmen" who co-founded the business. It was common for these henchmen to be scolded mercilessly by the boss and still feel proud, because in the "gangster-style management" system, being scolded was a form of "favor" from the boss. Now, professionals and professional managers have become the backbone of the enterprise. They can accept criticism but not scolding. A boss of a large enterprise once said, "I can scold those who started the business with me, but I never scold those who wear glasses." His meaning was that intellectuals who wear glasses have thin skin and cannot be scolded.
Previously, the boss managed everything directly, with all policies, systems, plans, profits, and losses in the boss's head. Now, management levels have increased from one to two or three; management requires systems, actions require plans, and profits and losses require accounting.
Previously, the boss's words were the enterprise's rules. Now, the boss must lead by example in following the systems he establishes; otherwise, the systems become ineffective.
The development of an enterprise is also a process of the boss's importance continuously decreasing. If the boss still indulges in the good feeling of "ruling over all" from the small enterprise era, the boss will become an obstacle to the enterprise's continued growth. Some enterprises have asked us to conduct employee training. After understanding the actual situation, we often bluntly tell the boss, "Training should start with the boss." For some enterprises that have changed countless subordinates and still struggle to achieve results, our final suggestion is usually to "change the boss."
To avoid the founder's trap, the boss must demonstrate a determination when the enterprise reaches a certain scale: the individual is willing to submit to the enterprise. Only when "we" is greater than "I" can the enterprise truly grow and thrive.
In the early stages, the boss is almost the sole driving force for the enterprise's growth. After entrepreneurial success, the boss is likely to become an obstacle to the enterprise's continued growth.
In the early stages of entrepreneurship, the main resource for growth is not capital but the boss's determination. At this time, the boss is the enterprise, and the enterprise is the boss.
Law 2 No grass grows under a big tree. "Hero bosses" often fail to create "hero enterprises"
Zhang Yue, the boss of Changsha Broad, once said, "When I first started, I found I could do the work of ten or a hundred people. But ultimately, I found I couldn't do the work of a thousand or ten thousand." A hero enterprise must find something that can do the work of ten thousand.
Comparing the "small boss" of a small business with the "big boss" of a large dealer, we find many differences in ability and treatment of talent.
A "small boss" is often shrewd, capable, all-around, and indispensable; a "big boss" seems "dispensable" because he doesn't do specific tasks.
A "small boss" often does not forgive subordinates' mistakes; a "big boss" often turns a blind eye to subordinates' minor errors. As the ancient saying goes, "If the water is too clear, there will be no fish; if one is too strict, there will be no followers." Writer Wu Jiaxiang said, "As a superior, you cannot fail to see subordinates' shortcomings, nor can you constantly stare at them. If you don't see them, you may misemploy people; if you always stare, you'll have no one to employ."
A "small boss" often likes to show off abilities, using them to prevent others from underestimating him and to bolster his courage; a "big boss" often hides his abilities, giving subordinates the chance to shine, and his abilities are proven by the enterprise itself.
When a "small boss" encounters an incompetent subordinate, he often says, "It's better if I do it myself," so the subordinate's abilities may never improve. A "big boss" either trains the subordinate to be competent or replaces them with a competent person.
When a "small boss" finds work not done well, he often criticizes or even scolds the subordinate; a "big boss" only criticizes if it's a responsibility issue, but if it's an ability issue, he guides and helps the subordinate.
No grass grows under a big tree. The "small boss's" excessive competence is often the reason subordinates are incompetent. Those bosses who can "do the work of ten or a hundred" will eventually find they cannot "do the work of a thousand." Therefore, cultivating subordinates and building a team is more important than leveraging the boss's personal talents. "Hero bosses" can only achieve small enterprises; only "hero teams" can achieve large enterprises.
Law 3 Without hands-on involvement, a dealer cannot do well. But being involved in everything, a dealer cannot grow big
A dealer relies on intuition to do the market; without personally doing the market, there is no intuition. However, if one is in the market every day, intuition fatigue sets in, and one loses the feel for the market—this is the so-called "aesthetic fatigue."
Dealers often make two extreme mistakes: either being involved in everything, spending all day in the market, equating themselves with a salesperson, or staying away from the market for long periods, only going to the front line when problems arise.
If a dealer wants to grow big, the market must be mainly handled by subordinates; the boss alone cannot do a large market. But relying on subordinates doesn't mean letting them cross the river by feeling the stones; subordinates need the boss's guidance. To command subordinates, the boss must spend 2-3 days each month personally experiencing the market, not just a cursory glance.
Law 4 For small dealers, standardized management increases costs. For large dealers, non-standardized management increases risks
People with formal training often cannot do small businesses because they always apply the model of large enterprises to small ones: small scale but many departments, few matters but many rules. Those without professional training often have fewer rules and processes, handling things flexibly and operating well. But once the scale grows, dealers find that their old tricks no longer work, and they realize the importance of rules and processes.
Small dealers focus on opportunities because with small scale and little capital, only seizing opportunities can lead to success. Large dealers must first avoid risks, then consider seizing opportunities. Opportunities are found in chaos, while risks are avoided through processes and systems.
Law 5 A dealer can do as much business as the number of people he can manage
From the start of entrepreneurship, a dealer basically goes through the following stages:
Stage 1: Mom-and-pop shop. At this time, sales cannot be large; too many customers would overwhelm them.
Stage 2: Couple plus helpers. Helpers are mainly relatives, only doing odd jobs, with little effect on market development.
Stage 3: Boss plus salespeople. Sales may expand, but they dare not hire very capable salespeople.
Stage 4: Boss + sales manager + sales team + service staff + accountant. The market can expand indefinitely, with company-style management and professional division of labor.
The development of a dealer is also a process of increasing personnel, or rather, because personnel increase, business gradually expands. Many dealers fail to grow because they dare not hire people. The reasons for not daring to hire include: First, sales are too small to support them. Second, they are unreliable and not trustworthy. They only dare to use relatives, fearing that excellent salespeople might become competitors. Third, their abilities are too poor to be useful. Fourth, they don't know how to manage or use people.
The actual situation is often: First, it's not that "sales are too small to support them," but that "not daring to use people makes sales small." In the initial hiring period, sales may not support the new hires, but as long as you don't dare to hire, sales will never increase. Second, many dealers' ideal "capable person" is their own "shadow," leading to the phenomenon: "If abilities are too poor, they're useless; if abilities are too strong, they're not dared to be used."
Law 6 Small dealers rely on insight, medium-sized dealers on professionalism, and large dealers on management
Small dealers rely on intuition, instinct, and insight, which come from front-line experience. We often see small dealers with many ideas and tricks.
Medium-sized dealers need professional judgment; without it, they cannot keep pace with industry changes.
Large dealers have accumulated sufficient resources, relying on others rather than themselves, lacking long-term front-line experience, so their intuition and insight diminish. But with sufficient management ability, they can mobilize many employees and fully utilize their intuition and insight.
Law 7 Entrepreneurial dealers must either become professional managers themselves or hire professional managers; otherwise, it's hard to transition from a startup to a normal operating enterprise
Liu Bei was an entrepreneurial boss, and Zhuge Liang was a professional manager. Liu Bei never transformed from an entrepreneurial boss to a professional manager, but because he hired Zhuge Liang as a professional manager, he achieved the tripartite division of the world.
Some enterprises are always in the startup stage; managing a scaled enterprise with startup management methods will certainly not make it big.
Enterprises always in the startup stage are always seizing opportunities but fail to accumulate resources to maximize those opportunities.
Enterprises always in the startup stage are always adjusting and trial-and-erroring, without maximizing what has been proven correct.
Enterprises always in the startup stage are always in the excitement of continuous entrepreneurship, while normal operating enterprises may be dull or even boring.
If a boss addicted to entrepreneurship cannot successfully transform into a professional manager, then the boss should hand over the daily management position to a professional manager and immerse himself in entrepreneurship. Because entrepreneurial success requires the boss, while normal management requires a professional manager.
Law 8 Only when products have appreciation potential does the dealer have operational space
Brand-name products sell well but don't make money; non-brand products make money but don't sell well. Almost every dealer is trapped in this dilemma. The solution is to "distribute products with appreciation potential."
When the Hope Group brothers split, Chen Yuxin, the boss of Huaxi Hope, did not use the Hope brand but created a new feed brand, "Wanqian." Dealers faced the choice of continuing with "Hope" or switching to "Wanqian." Most chose "Hope," while a few with foresight chose "Wanqian." Since "Hope" and "Wanqian" came from the same origin, with similar quality, but Wanqian's price was lower, its appreciation potential was much greater. Some dealers sold the low-priced Wanqian feed at Hope feed prices, thus earning excess profits.
Choosing a product is like choosing a stock: neither high-priced nor low-priced, but potential stocks—those with low current prices but expected to rise in the future.
Only when products have appreciation potential does the dealer have operational space and thus profit space.
II. Laws of Transformation
Law 1 Business-type dealers have a limit to their scale; entrepreneur-type dealers have no limit. If a dealer doesn't transform after reaching a certain scale, he will hit the "ceiling"
Business-type dealers can achieve "from nothing to something," but only entrepreneur-type dealers can achieve "from small to large."
Business-type dealers can become millionaires or ten-millionaires, but only entrepreneur-type dealers can become billionaires.
Business-type dealers may manage a team of dozens, but only entrepreneur-type dealers can manage teams of thousands or tens of thousands.
Most dealers start as business-type, but those who ultimately survive are usually entrepreneur-type. If a dealer doesn't transform, he will inevitably encounter the "ceiling" of growth.
The difference between a businessperson and an entrepreneur is not shrewdness, scale, capital, or profit. It is the difference in marketing models, organizational systems, management systems, boss mentality, and management philosophy.
Law 2 Dealers who never grow big have a "standard face"
If the main business is all handled by the boss, such an enterprise is hard to grow.
If customers only recognize the boss and not the employees, such an enterprise is hard to grow.
If a few sales champions account for the vast majority of sales, such an enterprise is hard to grow, because an enterprise with many marketing heroes is doomed.
If the main employees are relatives, friends, or children, such an enterprise is hard to grow.
If the wife and sister-in-law personally manage finances, such an enterprise is hard to grow.
Dealers who can't grow often scold subordinates for being stupid, but don't think about why they are stupid.
Law 3 Business-type dealers focus on results; entrepreneur-type dealers focus on process
Businesspeople often say, "No matter how you do it, as long as the result is good." Whether it's a white cat or a black cat, as long as it catches mice, it's a good cat.
Entrepreneurs often say, "The quality of the result is important, but more important is whether the good result can be repeated. Only results that can be continuously repeated are good results. That is, a cat that catches mice is not necessarily a good cat; a cat that can summarize the rules of catching mice is a good cat."
Law 4 Business-type dealers want "capable people" but fear them. Entrepreneur-type dealers can use both "capable people" and ordinary people
Many dealers have experienced "raising a tiger from a cub, only to be hurt by it when grown," and have a contradictory mentality of craving and fearing "capable people." "Craving capable people" is because they feel their own abilities are insufficient; "fearing capable people" is because they worry they might start their own businesses or become uncontrollable.
Why do business-type dealers fear capable people? Because the "capable people" they envision are their own "shadows," i.e., people as capable as themselves. Such capable people are strong in individual combat, so they easily start their own businesses.
Why don't entrepreneur-type dealers fear capable people? Because they recruit professional capable people, each very competent in a specific field, and through their combination, these professional talents can be utilized. Since entrepreneur-type dealers don't use individual-combat talents, even if they leave, it won't have a devastating impact.
Law 5 Businesspeople often "reward according to merit," while entrepreneurs usually "do not use positions as a reward for meritorious officials"
How to reward meritorious officials? One way is material rewards, called "compensation." Another is positional rewards, promoting them to leadership, called "empowerment."
Using positions as rewards for meritorious officials may result in "losing a capable doer and gaining an incompetent manager." We see that business-type dealers often have meritorious officials holding "court." In entrepreneur-type dealer teams, positions are only given to those with ability, not to meritorious officials. Even if someone was once a rival, if they have sufficient management ability, they may be given an appropriate position.
Law 6 Business-type dealers love to stir things up, finding a path through constant "trial and error." Entrepreneur-type dealers often adhere to the belief: "Be cautious before choosing, and persist after choosing"
Business-type dealers love to stir things up, with many ideas, often resulting in "not dying, but not growing big." Because they love to stir, they always find a way to survive. Because they can't persist, they can't take one thing to the extreme.
Entrepreneur-type dealers are very cautious before choosing a path, but once they choose, they go all out and persist.
Law 7 Business-type dealers trust loyal and reliable people; entrepreneur-type dealers trust the power of systems
"If you use a person, don't doubt them; if you doubt them, don't use them." This is a typical characteristic of business-type dealers. Because they do this, they can develop rapidly even without sound systems and processes. To achieve this, the entrepreneurial team must come from a small circle of past life, because mutual familiarity allows for trust without doubt.
When the scale expands, the people from the past small circle can no longer meet the enterprise's needs, so recruitment must expand to a larger scope. When people come from all over, if you require "don't use those you doubt," you may have "no one to use."
To achieve "use those you doubt," you must establish systems and norms, using supervision, avoidance, and processes to "give bad people no opportunity to do bad things," thus making them de facto good people.
III. Laws of Manufacturer-Dealer Relations
Law 1 The source of cooperation is common interest; the foundation of cooperation is common philosophy
Dealers naturally represent manufacturers' products to make money, but the profits promised by manufacturers are merely "painted cakes" that cannot truly "satisfy hunger." Some manufacturers dare to promise anything a dealer asks, but in the end, the dealer gets nothing.
What truly makes promises come true is the philosophy of cooperation. Only when the manufacturer and dealer have similar business philosophies can they cooperate smoothly. With a common philosophy, although they may argue, there won't be principled differences.
Law 2 Without manufacturer support, dealers find it hard to succeed. If they don't succeed, manufacturers support even less
Excellent manufacturers can drive a group of excellent dealers to rise, but excellent dealers cannot save a collapsing manufacturer. In local markets, dealers may play a decisive role, but in the overall market, manufacturers are decisive.
Dealers often feel that when they haven't succeeded, manufacturers don't support them, and when they have succeeded, they don't need manufacturer support. So what is the key to manufacturer support? It should be the "momentum of doing the market." Only when manufacturers see hope for success will they support. "Momentum of doing the market" gives manufacturers hope, so they won't fear spending money without results.
Law 3 The dealers most interesting to manufacturers are not the big ones, but those with the most potential
"My territory (market scope) is large." "I have many customers." "My sales volume is high." "I distribute many product categories." These "boasts" may intimidate small manufacturers without ideas, but truly strong and thoughtful manufacturers will question: "Is the territory large but the market not refined?" "Are the customers numerous but of high quality?" "Is the sales volume high due to cross-region dumping or intensive market cultivation?" "Are the product categories numerous but the structure reasonable?"
When manufacturers look for dealers, they often look at the future, not the present. Because the present is the result of distributing other manufacturers' products, while the future may be the result of distributing their own products. That is, the existing volume belongs to others; the increment is their own. Only if the dealer still has potential can they build up the manufacturer's products; otherwise, even a big dealer is useless. Therefore, when manufacturers communicate with dealers, they should talk less about the present and more about the future. The future is the weight that attracts excellent manufacturers.
Law 4 Large enterprises look for small dealers; small enterprises look for large dealers
Large enterprises have strong market operation and control capabilities, so they hope to find "obedient" dealers. They don't require dealers to have particularly innovative ideas, but they must implement the manufacturer's policies without compromise. Truly thoughtful dealers always have a bit of "disobedience." Their main requirement for dealers is capability, because this is work the manufacturer cannot do itself; other tasks like new product promotion, market control, and advertising can be handled by the manufacturer. For example, P&G's main requirements for dealers are only three: provide downstream customers, manage downstream customers, and deliver to downstream customers.
Small manufacturers, on the other hand, hope to find large dealers because their market operation ability is poor. They want to hand over products and policies to dealers and then do nothing else, with all other work done by the dealer.
Law 5 Whenever a manufacturer visits a dealer, the dealer should instinctively think: If you can't become a comrade-in-arms with the manufacturer, you will inevitably become an opponent
If you represent the manufacturer's products, you and the manufacturer are comrades-in-arms. If other dealers represent the manufacturer's products, the manufacturer is your opponent.
Every dealer doesn't want a strong manufacturer to become your opponent, because the success of a strong manufacturer means your operational space is compressed. Therefore, whenever a manufacturer's salesperson visits a dealer, the dealer should thoroughly understand the manufacturer's strength and operational approach. If you think the manufacturer will definitely succeed, you must recruit that manufacturer under your banner. If for various reasons you cannot combine with the manufacturer, you must not let that manufacturer combine with the local excellent dealer; otherwise, you will have no peace.
Law 6 Dealing with excellent manufacturers is the hardest; dealing with poor enterprises is the easiest
Dealers often face these confusions: looking down on small enterprises, but unable to tolerate large enterprises. They hope manufacturers will agree to their conditions readily, but if they agree too readily, they feel afraid.
Ordinary manufacturers, because they lack bargaining power, easily compromise with dealers. Excellent manufacturers compare dealers against standards, so dealing with them is hard.
Ordinary manufacturers dare to promise anything, getting the money first; excellent enterprises may not give many promises.
Ordinary manufacturers dare to give any policy, not fearing market chaos; excellent enterprises have many rules and require processes for policies.
Ordinary manufacturers' gross margins look high, but can they last? Excellent enterprises focus on the long term, with low but stable margins.
Ordinary enterprises sell on credit if goods don't move. Excellent enterprises rarely do credit sales.
Excellent enterprises have their own moral bottom line, being responsible not only to themselves but also to dealers.
Excellent enterprises will not harm consumer interests for short-term gains (e.g., reducing quality or price), because cheating may earn a small sum but cannot make you big.
Law 7 Excellent manufacturers are the "mentors" of dealers. By distributing excellent enterprises' products, you can become an excellent dealer
Manufacturers are the most important resource for dealers. Changsha Broad always chooses the best suppliers when purchasing raw materials, because the best way to learn from excellent enterprises is to "become their customer."
Excellent manufacturers don't just sell products; they provide "market solutions" and profit models.
Excellent manufacturers not only use dealers' customer networks but also help expand them.
Excellent manufacturers not only rely on dealers' abilities but also focus on improving them.
Excellent manufacturers not only assist dealers in sales but also in management.
Excellent manufacturers not only provide sales method support but also export marketing thoughts and concepts.
Law 8 To truly gain long-term manufacturer support, you must establish a "good citizen" image
Using abnormal means may gain short-term manufacturer support, but only "good citizens" can gain long-term support.
The most important support a manufacturer gives a dealer is not policies but sending people who can obtain policies from high levels. Therefore, dealers must persuade manufacturers to send their best employees to the regional market. Excellent salespeople are more likely to get high-level support than ordinary ones.
Dealers who often "go over the head" may gain some support from high-level pressure, but given the principle that "officials" are less effective than "managers," the truly decisive supporters may not be at the high level.
In fact, gaining manufacturer support is relatively easy if you meet two conditions: First, don't withhold policies; use them truly for market development, not turning manufacturer policies into your own profit. Second, when the manufacturer gives "input," give a certain "output." Because manufacturers are not afraid of spending money, but of spending without results, falling into the dealer's "policy trap."
Law 9 As long as the dealer dares to invest 20% of the money to activate the market, the manufacturer dares to invest 80%
Policy investment is often not a matter of how much money, but of confidence. High-level managers always want to invest in markets with hope. If dealers invest real money to develop the market, manufacturers will think dealers have confidence and are willing to provide matching investment. Therefore, as long as the dealer dares to invest 20%, the manufacturer dares to match with 80%.
IV. Laws of Family
Law 1 Family enterprises are not scary; what's scary is family management
The history of a dealer's fortune is basically the history of the family's fortune. Family entrepreneurship has the following benefits: First, family members can work without regard for cost, even without salary, as long as they have food; outsiders cannot do this. Second, family members trust each other, so supervision and restraint are unnecessary, saving management costs. Third, in the early stages when funds are scarce, human resources replace capital to complete primitive accumulation.
If the family tendency during entrepreneurship is "unavoidable," then when the dealer reaches a certain scale, the family flavor may become a "growth obstacle."
A family enterprise refers to equity issues, while family management refers to internal management system issues. Equity issues may be hard to solve, but management issues are relatively easy.
If it's family management, family members usually have "exclusivity," distrusting outsiders. Outsiders often lament that they can never break into the family circle, "even baring their hearts won't gain trust."
Family members often operate outside the system, such as "appealing over the head" when dissatisfied with external hires, which may happen through pillow talk, at family dinners, or during family leisure time.
Law 2 Relatives may be the most reliable people, but if they lack ability, they are the most terrible people
Dealers like to use relatives mainly because they are reliable, but what annoys bosses is that these reliable relatives often do terrible things. If they lack ability, what use is reliability?
Growing a business starts with learning to use unreliable capable people. Because they are "unreliable," you need to establish management systems, supervision, and restraint. Those who only dare to use reliable relatives will find it hard to establish a truly effective internal management system. Without the support of an internal management system, they cannot truly grow big.
Law 3 Dealers may find it hard to establish a truly modern enterprise system, but it's entirely possible to build a "family enterprise with modern flavor"
It may be very difficult for dealers to completely transform from a family enterprise to a modern enterprise. The transformation process is not only painful but may also cause internal turmoil. Therefore, establishing a family enterprise with modern flavor may be a better transition. That is, family members can be attracted to participate in management, but their participation must be subject to "institutional restrictions": First, family members should be evaluated and appointed on the same merit-based system; second, family members must be required to play roles within the system, prohibiting operations outside the system, especially paying attention to the family discipline of "don't talk business in private settings."
Law 4 A dealer's transformation usually starts with dismissing the wife and sister-in-law
This is the personal experience of many big dealers. Although this is a metaphorical statement, many dealers have indeed done this. As long as the wife and sister-in-law are in the enterprise, the management system is easily undermined.
V. Laws of Fate
Law 1 The growth of a manufacturer is a process of continuously eliminating "meritorious dealers"
The elimination of "meritorious dealers" is a heavy topic, but when a manufacturer doesn't eliminate them and risks being eliminated by the market, the manufacturer may have to take drastic measures.
A meritorious official in one period may become a criminal in another. Aren't those "meritorious managers" and "meritorious salespeople" who made great contributions to the enterprise's development also continuously eliminated? This seems heartless but conforms to the laws of market development. I once closely followed a food enterprise that replaced its dealers three times in 10 years, almost eliminating a batch every 3-4 years. In fact, this is also the cycle for eliminating "meritorious dealers" in other industries.
Mengniu has a famous "three-stage rocket" theory: the first stage rocket is discarded after boosting the satellite into orbit, and the second stage continues. After entering space, the second stage is discarded, and the third stage pushes. Although Mengniu's argument is not as blunt as "eliminating meritorious officials," the essence is the same.
Before 1997, the FMCG industry was mainly dominated by provincial-level dealers. After 2000, "provincial agents" nearly disappeared. Now, it's mainly "county agents." If manufacturers don't sink their market focus, they will disappear. To avoid disappearing, manufacturers will certainly eliminate "provincial agents" and "city agents." But when "county agents" grow up, the "provincial agents" and "city agents" are hollowed out, and their previous sales of tens of millions or hundreds of millions suddenly vanish.
Law 2 Twenty years of hard work, overnight back to "before liberation"
The elimination and mortality rates of dealers are very high. How many dealers from 20 years ago still exist? The accumulated wealth often "comes from somewhere and goes somewhere else." Is this the fate of dealers?
Every commercial revolution first revolutionizes dealers. Every time a manufacturer sinks its market focus, it means a large number of dealers are eliminated or restricted in their distribution scope. Is this an unavoidable "calamity" for dealers?
The industrial concentration in every industry not only eliminates many manufacturers but also many dealers. Is this also an unavoidable "calamity" for dealers?
Some dealers say they are in a "five-year cycle." Indeed, from the reform and opening up to now, about five generations of dealers have passed. At a manufacturer's dealer conference, a dealer said, "Our top dealers hadn't entered this industry five years ago, and the top dealers from five years ago either can't be found now or don't have the qualifications to stand on the podium."
Law 3 The growth of a dealer is a process of continuously "crossing thresholds"
Every 3-4 years, a dealer must cross a threshold. Those who succeed will have smooth sailing for the next 3-4 years; those who fail will disappear.
China's marketing shows a marketing change cycle of about 3-4 years. The market environment undergoes qualitative changes every 3-4 years, forcing manufacturers to comprehensively adjust their marketing systems. During the adjustment, marketing directors, regional managers, and salespeople are successively adjusted. Based on the principle of "a new emperor, new ministers," dealers also experience a 3-4 year adjustment cycle.
Law 4 As individuals, dealers may be able to control their own fate. As a whole, the fate of dealers is determined by the times
Although dealer associations are being organized across the country, compared with strong manufacturers and strong terminals, dealers as a whole are still a "vulnerable group." Dealers lack their own spokespersons, their own research experts, and their own voice in the media. In the rise of strong manufacturers and strong terminals, dealers always survive in the cracks.
Before the emergence of national dealers, no matter how large the scale of local dealers, in the eyes of manufacturers, they were just a low-level problem to be solved.
Although the absolute scale of the dealer group is increasing, the decline in relative scale is an irreversible trend.
Law 5 The core value of channel dealers lies in their distribution capability. As long as dealers lack distribution capability, they will eventually leave the business stage
The "dealer uselessness" theory appeared in the United States in the 1920s, in Japan in the 1960s, and continues to appear in China. The "terminal sales" and "direct sales" trends in China are manifestations of this theory.
The reason manufacturers need dealers is that dealers have the following values: familiarity with local markets, downstream customers, providing financing (buying with cash), political-business relations, and product distribution. Among these, the most important and irreplaceable capability is low-cost distribution. In the information age, many things can be achieved through remote control, and anything that can be achieved through remote control can be replaced by manufacturers. But only distribution cannot transcend time and space; it must be executed by dealers. This is why manufacturers' terminal sales clamor for a while but ultimately must rely on dealers. Therefore, to survive the continuous elimination of "meritorious dealers" by manufacturers, the most important capability for dealers to strengthen is distribution capability.
Law 6 Direction determines the future; model determines success or failure
Marketing is not always a single path. Today's successful experience may be tomorrow's lesson of failure. Therefore, dealers need to adjust their direction periodically.
Only by turning direction into methods and methods into models can you find a shortcut to success. A marketing model is the popularization of marketing methods and their standardization and proceduralization. Its role is to enable ordinary people to achieve extraordinary results, not to let salespeople cross the river by feeling the stones.
Models always have prerequisites. When the marketing direction changes, previously effective models become ineffective. Therefore, once a new marketing direction is determined, the old model should be abolished and a new one sought.
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