---
title: "The Manufacturer-Dealer Cooperation Model Based on Forcing Inventory Has Reached Its End!"
description: "Dealers are increasingly frustrated with manufacturers' practices of forcing inventory and shifting risks, leading to broken trust and unhealthy relationships. To improve, manufacturers must shift from a 'pushing' model to an 'empowering' one, focusing on protecting dealer profits, co-creating value, and establishing equal communication platforms."
author: "金名"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-01-06"
categories: "Dealer Operations"
language: "en"
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citation: "金名. “The Manufacturer-Dealer Cooperation Model Based on Forcing Inventory Has Reached Its End!.” New Distribution, 2026-01-06. https://xinjignxiao.com/en/articles/the-manufacturer-dealer-cooperation-model-based-on-forcing-inventory-has-154e0ce1/"
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---

# The Manufacturer-Dealer Cooperation Model Based on Forcing Inventory Has Reached Its End!

> Dealers are increasingly frustrated with manufacturers' practices of forcing inventory and shifting risks, leading to broken trust and unhealthy relationships. To improve, manufacturers must shift from a 'pushing' model to an 'empowering' one, focusing on protecting dealer profits, co-creating value, and establishing equal communication platforms.

"A warehouse of over a thousand square meters is packed full, and the manufacturer has set online prices at ex-factory levels, so many retail terminals are sourcing directly from the internet. With so much stock, how am I supposed to distribute it?" Looking at his warehouse full of goods, dealer Lao Li felt anxious, while the manufacturer's sales rep was still urging him to take another truckload by the end of the month.

"After being a dealer for 10 years, I really don't want to do this anymore. Company XX still owes me tens of thousands in fees. I'd rather give that up than continue. There are too many tricks, and I'll only sink deeper." A well-known beverage dealer lamented.

This year, I visited dozens of dealers, and most of them complained about manufacturers.

Over the years, the relationship between manufacturers and dealers has become increasingly unhealthy. Dealers are complaining more and more about manufacturers. Many veteran dealers have given up their former agency brands, and quite a few have completely exited the FMCG industry.

The dealers who remain are more clear-headed, not putting all their eggs in one basket, trying new businesses, just to avoid being tied down by manufacturers.

Many dealers are also in a dilemma. Because they have invested heavily in resources (warehouses, vehicles, teams, etc.), the cost of switching industries is high. Even with thin margins, they have to grit their teeth and continue.

Some dealers switch from one brand to another, but the situation doesn't improve.

**Dealers are either exiting, shifting focus, or exhausting themselves in battles with manufacturers, even venting their dissatisfaction everywhere. This unhealthy manufacturer-dealer relationship is intensifying.**

**Why has the manufacturer-dealer relationship come to this?**

The contradictions between manufacturers and dealers in the FMCG industry have long existed, but in the era of oversupply, these contradictions have been further intensified.

In the early days of a brand, dealers could well meet the manufacturer's growth needs for sales volume and profit through market operations, achieving a win-win situation.

When sales volume and profit become difficult to grow through operations, manufacturers continuously pressure dealers, squeezing them to achieve their own profit growth. The cooperative relationship begins to turn into one-sided exploitation.

Look at the annual reports of major manufacturers: profits are still growing every year, and some even see significant growth.

**1. Continuous inventory pushing harms dealers' interests**

The biggest complaint from dealers is inventory pushing. To meet targets, manufacturers find inventory pushing the simplest and most direct means.

In the past, the FMCG industry often said, "The market is pushed out." Indeed, many early dealers grew into major clients through inventory pushing. Manufacturers pushed inventory to dealers, dealers pushed to terminals, and even all parties were willing to push because the fundamental reason was that both dealers and terminals made money. Even if there were near-expiry products, the company would cover the costs, giving dealers and terminals peace of mind.

Now, warehouses are full, but far beyond the terminals' absorption capacity, causing dealers to be unable to distribute goods. Moreover, near-expiry products at terminals need to be recovered, but manufacturers, based on their own profit targets, refuse to handle them. Ultimately, the costs of recovering and disposing of near-expiry products are borne by dealers.

"Dealers are worse off than middlemen; they don't have to push inventory. Middlemen have no tasks and can quickly convert to cash. Dealers work hard but end up with nothing, just a warehouse full of stock."

**For any action designed by the manufacturer, consider the entire process during and after execution: does it cause profit loss to the dealer? If there is profit loss and it is still enforced, then this action will backfire.**

During this year's May Day holiday, a manufacturer organized all staff to accompany trucks for inventory pushing. Sales reps complained, "Many store owners are unwilling to take inventory now, or don't want to take too much."

**Blind inventory pushing also leads to a vicious cycle of price chaos and cross-regional selling, further compressing dealers' gross margins.**

"There's still a pile of goods in the warehouse, and terminals can't be pushed anymore. To avoid losses from expired products, we have to sell at low prices." A dealer for a leading dairy company said.

Additionally, manufacturers' expense reimbursement is becoming increasingly difficult. Policy formulation is increasingly complex, often deducting for "non-compliance," and the deducted expenses directly become the manufacturer's profit.

New products are bundled with bestsellers for shipment, and poor sell-through of new products leads to losses. "Cooperating with manufacturers is too difficult; it's all tricks, and dealers bear all the risks."

Manufacturers, through carefully designed rules, transfer operational risks and costs to dealers to the maximum extent, with most profits flowing to the manufacturer.

**Moreover, changes in the macro environment, the rapid development of online platforms, and the rise of new retail are all seizing business from traditional dealers and further dividing profits. Everything happening is harming the interests of original dealers, and the manufacturer-dealer contradictions continue to intensify.**

**2. Problems are passed around, lacking equal communication platforms, and trust is broken**

"The manufacturer fooled me into taking inventory, saying they would handle the costs of near-expiry products. The warehouse recovered thousands of boxes of near-expiry products, but they never processed them. Now they're expired. The previous manager resigned, and the manufacturer doesn't care." A dealer who has been in the business for nearly 20 years still gets emotional when mentioning this: "There's no trust at all."

Accumulated issues like leftover inventory and expense disputes continue to erode trust between manufacturers and dealers.

**Additionally, the lack of equal communication platforms further exacerbates dealers' distrust of manufacturers.**

Many manufacturer personnel directly notify customers to do this or that, regardless of market reality or the dealer's survival.

"To improve profits, the company raises prices without prior communication, directly increasing our purchase price. Then there's no other support, and all the market aftermath falls on us. Many terminals are unwilling to stock up." A beer dealer was very angry.

When market problems arise, dealers have nowhere to report, and problems remain unresolved. Small problems gradually become big ones. Over time, dealers lose confidence in manufacturers and see no hope for development.

**In summary, without mutual benefit and trust between manufacturers and dealers, the relationship is bound to break down. Because any business model that benefits only one side is not sustainable.**

**How can the manufacturer-dealer relationship be improved?**

Many large manufacturers have noticed the sharp contradictions and have successively shouted the slogan of a "manufacturer-dealer community of shared destiny" at dealer conferences. But in reality, it gets distorted during implementation and even becomes a burden on dealers.

The root cause is the huge contradiction between the manufacturer's ever-increasing sales and profit targets and the shrinking market capacity. If this contradiction is not resolved, the manufacturer-dealer relationship will only become more tense. Therefore, **the prerequisite for improving the manufacturer-dealer relationship is to loosen the constraints on dealers, not to demand everything at once.**

Under this premise, the manufacturer-dealer community of shared destiny must be translated into specific actions.

**I. In difficult times, focus on customers' "profits"**

**Establishing a "manufacturer-dealer community of shared destiny" doesn't need to be high-sounding; the core is not to harm dealers' interests.**

1. When formulating any action, consider the whole process to see if the dealer can benefit from it.

Even for inventory pushing, assist dealers in selecting appropriate products, timing, and suitable terminals. Push inventory based on terminal needs with solid reasoning, not blindly to meet targets. At the same time, follow-up actions and support should be provided, not just pushing and then ignoring.

2. Simplify expense support and ensure timely reimbursement.

In the current environment, especially pay attention to the timeliness of expense reimbursement. Many dealers' profits basically rely on manufacturer rebates. If rebates are delayed, dealers face significant financial pressure and may doubt the manufacturer's policies.

During this year's visits to customers with sales growth, "The company's expense reimbursement is quite timely; I receive it the month after the activity ends." It's clear that such dealers still have confidence in the manufacturer.

3. Stabilize prices as much as possible.

Online prices have a significant impact on traditional dealers. To address this, some manufacturers are actively responding.

XX Spring Water has customized differentiated packaging for online platforms, protecting the product's price system to a certain extent.

**II. Shift from "one-way management" to "value co-creation"**

Value co-creation is not on paper or in verbal training, but in solid actions.

**Manufacturers need to join forces with dealers to create value together.**

1. Joint actions to discover and seize market opportunities.

Manufacturer and dealer personnel should go out to discover and seize market opportunities and create value together.

"In June this year, we did a roadshow in a business district, intending to sell XX fresh beer. But fresh beer didn't sell much; fruit beer took off." A promotion specialist from a manufacturer told me.

This shows that consumer demand exists. The problem is that if we all stay in the office and give orders, we won't discover opportunities. Only by going to the terminals and taking action can we find them.

2. Integrate resources and focus "business actions and company resources" on "terminal sell-through."

Dongpeng Beverage, in its core markets, **has established a "BC Integrated Joint Operations Center" with dealers.** The manufacturer provides SaaS systems and marketing resources, while dealers are responsible for terminal execution and consumer operations.

The joint command center focuses on "terminal intensive cultivation" and "consumer operations," connecting five-code associations, launching intelligent product selection tools, conducting one-item-one-code activities, and operating terminal membership programs. All actions revolve around "efficient sell-through."

"Dongpeng's scan-code activities are effective and popular with consumers and terminals because stores don't need to collect bottle caps, and consumers have a good purchase experience," a Dongpeng dealer remarked. "Many manufacturers' scan-code redemption activities require cap verification, which has a long cycle. Stores find it troublesome and sometimes don't redeem for consumers, making the activities inefficient."

Many leading companies are exploring new paths for "manufacturer-dealer value co-creation." Nongfu Spring has partnered with key dealers to create a "Terminal Data Joint Laboratory"; Coca-Cola has selected core customers to build an "IP Co-branding Joint War Room" for scenario-based marketing.

**III. Establish equal communication platforms, listen to customers' voices, and solve their problems**

Solving problems is the top priority now. Many problems are not unsolvable but lack communication channels.

Manufacturers should establish equal and effective communication mechanisms. Allow dealers to voice their opinions, promptly understand the problems customers encounter, and ensure both sides are aligned. Discuss openly with customers based on their actual problems and provide targeted support.

"This communication platform is very good. Last time I raised an issue at the meeting, the company quickly resolved it. Now I can confidently go out and develop the market." A dealer of a certain manufacturer shared his feelings at the meeting.

**Final Thoughts**

Dealers are a crucial link in the channel value chain, connecting upstream and downstream. Excessive squeezing may boost manufacturer profits in the short term, but in the long run, it will destroy the entire channel system, leading to "no dealers to recruit, no stores to sell."

The way out for dealers is not to complain but to enhance their core competitiveness; otherwise, they will eventually be eliminated by the market.

Now, manufacturers must quickly shift from "inventory pushers" to "enablers," and dealers need to upgrade from "handlers" to "operators." Only by establishing a win-win cooperation mechanism of "value co-creation and benefit sharing" can they stabilize channels, activate terminals, and achieve sustainable development.


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## Citation metadata

- Publisher: New Distribution
- Author: 金名
- Published: 2026-01-06
- Canonical: https://xinjignxiao.com/en/articles/the-manufacturer-dealer-cooperation-model-based-on-forcing-inventory-has-154e0ce1/
- Original source: https://mp.weixin.qq.com/s/fgdg4jqGUzX6auaVxsP95g

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