---
title: "The Distributor Business Can Thrive for Another Decade"
description: "Despite shrinking margins and rising costs in the FMCG industry, one distributor in Bijie, Guizhou, has achieved nearly 30% annual growth for three consecutive years. Fang Fan, general manager of Guizhou Fang Wang Yuan Trading, shares his 11-year journey from scratch to over 100 million yuan in scale, emphasizing market penetration, team management, and future strategies."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-02-23"
language: "en"
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---

# The Distributor Business Can Thrive for Another Decade

> Despite shrinking margins and rising costs in the FMCG industry, one distributor in Bijie, Guizhou, has achieved nearly 30% annual growth for three consecutive years. Fang Fan, general manager of Guizhou Fang Wang Yuan Trading, shares his 11-year journey from scratch to over 100 million yuan in scale, emphasizing market penetration, team management, and future strategies.

"The profit in the FMCG industry is getting thinner. Over a decade ago, as an FMCG distributor, you could earn 1 yuan per bottle of beverage sold; now it's still 1 yuan, but costs have multiplied and it's harder to sell." This is the genuine sentiment of a distributor during a market visit in Anhui.
Low profits and tough business conditions have become common feedback from FMCG distributors in recent years. However, when visiting Fang Fan, general manager of Guizhou Fang Wang Yuan Trading, the author saw a different answer.
"Having been a distributor in Bijie for 11 years, I find this profession increasingly exciting and worth pondering and acting upon. As long as you dare to think, anything is possible! But the prerequisite is that you must lead your team and get moving!" shared Fang Fan, general manager of Guizhou Fang Wang Yuan Trading.
From an industry perspective, the market has indeed changed significantly, but at the local level, these changes are gradual. Distributors willing to invest time in learning and practicing still have growth opportunities. **In Bijie, a fourth-tier city, Guizhou Fang Wang Yuan Trading has maintained nearly 30% annual growth over the past three years.**
This article shares the author's exchange with Fang Fan, general manager of Guizhou Fang Wang Yuan Trading. A young man who started his business right after graduating in 1992, he used 11 years to gradually surpass local peers and achieve a scale exceeding 100 million yuan.
******Market Assault:**
**From Zero Foundation to Covering 2000+ BC Stores**
Guizhou Fang Wang Yuan Trading was established in 2013, marking both Fang Fan's first year of entrepreneurship and his first year after college graduation.
"I studied civil engineering in college, so I graduated and immediately became unemployed, then started a business. Initially, it wasn't as grand as entrepreneurship; I just wanted a job to support myself and survive." That was Fang Fan's initial thought when he became a distributor.
At the start, Fang Fan faced three major problems: **no money, no brands, and no store network—completely starting from scratch.**
His father was a teacher, and his mother worked in a government unit. Fresh out of college, Fang Fan had little savings to support his venture. So, he borrowed 200,000 yuan from various sources as startup capital and began exploring on his own.
Initially, Fang Fan wanted to enter the grain and oil category, but after discussing with peers, he realized that with such limited capital, grain and oil were not feasible. He finally chose the condiment category because it required relatively lower capital investment and had less brand concentration, allowing small brands to compete.
With money and products sorted, the biggest remaining issue was the lack of a store network. For distributors, the core asset is the channel. A distributor's sales network in the local area ensures sales volume and influence, and provides more bargaining power when partnering with brands.
From 2013 to 2016, Fang Wang Yuan Trading was still a typical small wholesale operation, renting a store in the wholesale market and using telemarketing to find customers, but the scale never grew, with sales only in the millions.
Starting in 2016, Fang Wang Yuan Trading sorted out all the stores in its coverage area and began an assault.
"The assault hit a snag right away: stores in the urban area were already occupied by other distributors, making it hard to get our products in," recalled Fang Fan.
**In the early stage, without sufficient resources, avoid competitors' strong areas. Find the weakest links and use simple methods to capture the market, then expand rapidly once you have a foothold.**
So at this stage, Fang Wang Yuan Trading focused on townships, starting with fresh food stores in rural areas.
"There's no special method or skill in the assault; it's just about '200% diligence.' Township fresh food stores typically open at 6 a.m., but other suppliers usually deliver after 8 or 9 a.m. We delivered every day at 5 a.m. to ensure products were on shelves before the stores opened," shared Fang Fan.
Through persistence, Fang Wang Yuan Trading accumulated its first batch of customers, gradually building a customer base from rural to urban areas.
However, the rapid early expansion left many hidden problems. On one hand, many stores were on consignment, leading to high receivable rates; on the other hand, the consignment system had many loopholes, with salespeople often embezzling funds.
To address these issues, starting in 2019, Fang Fan began to gradually improve the store classification management system. Fang Wang Yuan Trading divided stores into three levels, each with corresponding credit management and accounts receivable management.
> A-class stores: high sales and good credit, granted 10-20 days credit period and a certain credit limit;
>
> B-class stores: average sales and good credit, granted 7 days credit period and a certain credit limit;
>
> C-class stores: poor credit, no credit allowed, cash on delivery;
A business management mechanism was also established, requiring salespeople to collect payments on time according to the credit period. For receivables not collected within the credit period:
> Receivables under 5,000 yuan, exceeding the credit period, fined 10 yuan/day;
>
> Receivables 5,000-10,000 yuan, exceeding the credit period, fined 20 yuan/day;
>
> Receivables 10,000-30,000 yuan, exceeding the credit period, fined 50 yuan/day;
>
> Receivables over 30,000 yuan, exceeding the credit period, fined 100 yuan/day.
This is the basic store management system. Additionally, to increase store stickiness, Fang Wang Yuan also innovated to boost store activity.
**First, proactively help stores attract customers.** Allocate business that could be direct to wet markets and BC small stores.
Those in the condiment industry know that dining establishments are a major channel for condiment sales. But Fang Wang Yuan's approach is to give the supply rights of some small restaurants to nearby wet markets or BC stores, ensuring the served stores have a stable customer source.
Once stores have a stable business source, their loyalty and stickiness naturally increase. Condiment shelves in stores are limited; giving stores stable sales will naturally lead them to offer you better display positions. More display positions increase the likelihood of consumer purchases, creating a very healthy ecosystem.
**Second, replace fixed display fees with "tiered fee investment."** The display fee for stores is not fixed but dynamically adjusted based on sales volume; the more you sell, the more you earn.
For example, selling 5 cases earns a display fee of 100 yuan/month; selling 10 cases earns 200 yuan/month.
This is similar to the logic of in-store promoters in large stores: consumer purchase decisions are easily influenced by promoters, especially for products like condiments where brand awareness is low. In small terminal stores, the store owner is the best promoter. Incentivizing store owners makes sales a natural outcome.
******Team Management:**
**Small Teams Rely on Emotion; Large Teams Must Rely on Systems**
Since 2016, Fang Wang Yuan Trading has seen new changes almost every year, with continuous growth in scale and team expansion, and rapid company growth.
But the increase in personnel brought new problems: high turnover, and in the first two years of transformation, there was almost no complete team. **Small teams can rely on emotion, but large teams must rely on systems.**
So from 2016 to 2019, Fang Fan spent three years thinking about and improving the team management system. One was reforming compensation and performance; the other was building a talent management system.
Before 2016, Fang Wang Yuan's foundation in Bijie was weak, and Fang Fan's idea was simple: keep the company alive first.
"At this stage, there was no concept of compensation or performance; it was simple and crude: heavy rewards and heavy penalties. The only indicator was the sales target. No assessment of profit or process; as long as you sold the goods, I paid," shared Fang Fan.
But this approach had obvious drawbacks: on one hand, after-sales issues like overstocking and returns were numerous; on the other hand, salespeople engaged in many irregular operations, such as allowing store credit, leading to chaotic accounts.
After 2016, as the market base stabilized, Fang Fan began adjusting compensation and performance.
Salesperson salaries are divided into three parts: **sales amount salary + profit salary + KPI assessment salary.**
**The core of KPI assessment is to balance the salary gap between peak and off-peak seasons. Peak season assesses sales, off-peak season assesses process, to balance salesperson income.**
Through compensation and performance, salespeople become "insiders" of the company. As long as the company's business improves, salespeople enjoy the dividends of growth, naturally becoming more proactive.
Team stability is about money at the compensation level, but another important aspect is systematic talent management.
**Fang Wang Yuan Trading does not recruit salespeople externally; they are cultivated internally.**
Why not recruit externally?
**On one hand,** external recruits don't understand the compensation and performance system, requiring significant time to guide; if guidance fails, they may leave quickly. **On the other hand,** many external recruits are seasoned veterans with a lackadaisical attitude, no ambition, and may even defraud company expenses.
Therefore, Fang Wang Yuan only recruits drivers and sorters/delivery personnel externally. These are physical jobs that don't require much thinking, just execution.
After working for a while, these basic execution staff become familiar with the company and the sales compensation system, and many are willing to transfer to sales roles.
Internal transfers have advantages. First, they are familiar with all company rules and business processes, requiring little time to adapt.
Second, they know all customers well, especially delivery and driver staff who interact with customers daily; becoming a salesperson is just a role change, and they can get up to speed quickly.
**This Business, I Think I Can Do Even Better**
"Having been a distributor for 11 years since graduation, I think if you immerse yourself in this business, are willing to learn and try, there are still many opportunities," Fang Fan told New Distribution.
Each company has different opportunities at different growth stages.
Taking Fang Wang Yuan's development path as an example, the opportunity in the early stage was to capture stores, turning BC-class stores into core competitiveness, achieving a breakthrough from 0 to 1.
The opportunity in the growth stage is to focus on team building, improving human efficiency through standardized team management systems, thereby achieving leapfrog growth in business scale.
"In the next stage, I will focus on two directions. One is to deepen the supply chain, increasing the share of shelves in small stores; the other is to extend downstream, doing retail ourselves," said Fang Fan about the company's next strategic plan.
To put it plainly, **deepening the supply chain means seizing existing market share, expanding categories and brands around the product needs of small and medium stores, making stores more sticky and increasing their purchases.**
Doing retail is a trend in current consumer shopping changes; consumers prefer stores with good product selection, environment, and displays. Community stores are gradually moving toward standardization, with standard management models and shopping environments. In lower-tier cities, such standard convenience stores are rare; early positioning might be an opportunity.
Fang Fan remains confident about the future development of Fang Wang Yuan Trading. "In the next decade, I can do even better."
**From March 14-16, 2024, during the Spring Sugar Fair, the Second China FMCG Distributor Conference, organized by New Distribution and Zhoupu Data, will be held in Chengdu.**
On March 15, a closed-door private sharing session for distributors will be held: "Low-price impact, manufacturer direct control, declining customer traffic, what are the options for distributors?" One-on-one dialogues with outstanding major distributors to share experiences, explore business opportunities, and discuss era dividends.
At the same time, we will invite 16 benchmark distributor bosses and related industry executives to share their latest thoughts on the distributor business. We hope to provide direction and set a beacon for distributors facing drastic changes today, so at least their business direction is not blurred or confused!
The Second China FMCG Distributor Conference is not only an ideological feast of knowledge, cases, and methods but also a conference leading the future development of the distributor business!
************This conference will revolve around the theme **「Supply Chain Revolution」**. Over 3 days, there will be one main forum, one China FMCG Hard Discount Conference, one China FMCG Distributor Conference, over ten sub-forums and closed-door exchange sessions, and the first major debut of the [Ultimate Supply Chain] Brand Factory Direct Procurement Fair. Together with thousands of FMCG brand owners, distributors, retail transformers, and industry service providers from across the country, we will gather in Chengdu for continuous brainstorming to discuss the challenges and opportunities, changes, and solutions in the era of supply chain revolution.
In this era of supply chain revolution, a new business era will be born. We hope every participant will still have a place in this wave, and we believe this will be a worthwhile conference! For business cooperation, please contact:
**🔺Scan code for ticket consultation🔺******


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