When I first entered the consulting and training industry, I was often asked by brand marketing teams: How to manage distributors? I personally dislike the term 'management.' Distributors and brand owners are partners; mutual empowerment and win-win cooperation are key. They play different roles and functions in the channel chain (brand owner-distributor-operations team-outlet-consumer), being merely upstream and downstream, with no issue of who manages whom. Upstream brand owners need to achieve their own success through the success of downstream distributors, create value for them, and grow together with them—this is called empowerment! Strong brands are accompanied by strong distributors. Today, let's look at empowerment from another dimension: delegation of authority! Why delegate authority to distributors? I. The Times Have Changed In 2012, when Mr. Zhong of Nongfu Spring visited the Jiangxi market, he proposed a viewpoint: The market cannot be solely dictated by the manufacturer's personnel; (between manufacturer and distributor) whoever has stronger operational capability should lead the market. For companies with annual sales of over ten billion yuan, this idea was quite forward-thinking at the time. Back then, large trading companies were almost all achieved through the brand owner's 'nanny-style' management. As long as they were willing to follow the manufacturer, with the demographic dividend still present, they wouldn't do too poorly. This also cultivated a business model where many distributors at that time only knew how to 'sell' but not how to 'operate.' The brand owner's labor costs were also cushioned by the demographic dividend, so both manufacturers and distributors were doing well. Now, first of all, distributors are different. Today's surviving distributors have been through market selection and elimination; they not only know how to 'sell' but have gradually learned how to 'operate.' After more than twenty years of continuous learning and progress, excellent distributors have emerged in various regions. They have mature business models, and their market control capabilities far exceed those of the brand owner's local sales staff. If a salesperson with weak operational ability is assigned to manage a client with strong operational ability, the results can be imagined. Secondly, market competition has changed. From an incremental market to a stock market, and then to a shrinking market, competition is intensifying. As consumers become more mature, the price difference and gross profit decline is inevitable. Finally, the protection mechanisms for grassroots employees are increasingly improved. This is a sign of social progress; it is difficult to reduce labor costs through low wages, low social security, third-party arrangements, and other means. Take two well-known domestic beverage companies as a comparison: the difference in annual revenue and profit between Nongfu Spring and Coca-Cola can explain everything. Therefore, regarding delegation of authority, brand owners need to change. II. What Are the Benefits of Delegating Authority? The obvious benefits include the following: First, it increases distributor motivation. Delegating authority makes distributors feel trusted and valued, giving them more drive and enthusiasm to operate the brand's products, actively expand the market, increase sales, and form a closer cooperative relationship with the brand owner. Second, it leverages distributor advantages. Distributors usually have a deeper understanding of the local market, consumer needs, and channel resources. Delegating authority allows them to better utilize their strengths, formulate sales strategies and marketing plans that better fit the local market, and improve market response speed and flexibility. Third, it reduces the brand owner's burden. By delegating some operational authority to distributors, brand owners can focus more on core businesses such as product development, brand building, and market promotion, improving overall operational efficiency while also reducing costs and risks in channel management. Finally, it promotes market expansion. After gaining authority, distributors can operate more autonomously and may adopt innovative marketing methods and channel expansion approaches, helping the brand owner open up new market areas and increase market share. What Type of Distributors Can Be Delegated Authority? When it comes to delegation, many friends also have their concerns: First, brand management risk. Distributors may neglect brand image and service quality for short-term gains, or adopt inappropriate methods in brand promotion and marketing, damaging the brand owner's reputation. Second, market order risk. Delegation may lead to excessive or irregular competition among distributors, such as price wars or cross-regional selling, disrupting market order. Third, cooperation trust risk. During delegation, if there is a lack of sufficient trust and communication between the brand owner and distributors, cooperation disputes and conflicts may arise. All the above issues may affect the outcome of 'delegation,' so 'delegation' must target the right customers. 'Delegation' means releasing market-leading operational authority. To whom should the market's leading operational authority be given? It is not determined by the manufacturer or distributor but by the market. Seeking the leader that is more advantageous in suppressing competitors is the core of sustainable development for both manufacturers and distributors. So the question is: How to identify which type of distributor has the capability for market-leading operations? For brand owners, the most preferred distributor standards are only two: one is being able to do the job (capability), and the other is being willing to do the job (willingness). This requires brand owners to establish a complete evaluation system for distributor capability and willingness, selecting those with strong capability and willingness to lead regional market operations. How Should the Evaluation System Be Established? Market expense investment requires joint participation from both manufacturers and distributors. For example: If 100 yuan is invested in a market, a distributor with strong operational capability can generate 1,000 yuan in output, while a weak one can only generate 200 yuan. A distributor with strong willingness will invest an additional 20 yuan themselves, totaling 120 yuan to cope with fierce market competition, while a weak-willed one will first turn the 20 yuan into profit, leaving 80 yuan to face competition. So with the same 100 yuan investment, the results are vastly different. Therefore, distributors need an 'exam' with two subjects: one called capability assessment and the other willingness assessment. A scientific evaluation system needs to be established to expose the subjects with poor performance, facilitating brand owners to provide categorized empowerment and assist in improvement. I. Capability Assessment System: Capability qualification can be divided into three categories.

First category: Business operation capability. Including: distributor's total business scale, performance target achievement rate, resource outlet coverage rate, 24-hour delivery rate, key product coverage rate, channel age compliance rate, etc.

Second category: Hardware configuration capability. Including: vehicle (business) configuration, free operating funds, warehouse configuration and management system, war room configuration, etc.

Third category: Organizational management capability. Including: team tenure and construction, distributor organizational structure, operation management system, merchant team numerical distribution rate, weighted distribution rate, shelf display distribution rate performance, etc. II. Willingness Assessment System: Willingness qualification can be divided into five categories. First category: Brand business operation status

Second category: Brand reputation and word-of-mouth

Third category: Brand loyalty

Fourth category: Willingness to learn and develop with the brand owner

Fifth category: Cooperation in policy execution and other matters Distributors need an exam, but the exam questions need to be developed by the brand owner's team. Based on different types, set scoring standards for measurement indicator dimensions, and then establish a distributor evaluation system. This evaluation system is the first step in delegating authority to distributors. Is Delegation Contradictory to Management? After full delegation, it is equivalent to contracting the market to distributors. Many brand owners have also tried this, with some successes and some failures. Their concerns include the following: First, many brand owner executives do not approve of the contract system, considering it 'lazy governance.' It may seem worry-free in the short term, but in reality, it brings endless troubles. Second, the contract system may weaken the brand owner's control over distributors, making it difficult to require them to do the 'fine work' such as 'visiting big and small stores, making displays, maintaining price order, executing promotions,' and it may also stimulate some distributors' 'greed,' and problems with expense implementation are only a matter of time. Third, under the contract system, the interests of manufacturers and distributors are inconsistent. Some distributors' interest is to take this year's contract profit; as for next year's floods—it's none of their business. For brand owners, they hope for a lasting business with high distribution rates, stable prices, displays... and sustainable business. But from the perspective of joint development of manufacturers and distributors, these viewpoints are not valid!

  1. The market contract system and the management and constraints on contractors are not contradictory; on the contrary, they complement each other. Regional contracting must be carried out within conditional limits, including but not limited to 'fine work' and 'sustainable business,' because contractors and distributors also want to establish a healthy ecosystem and seek long-term interests at this time.
  2. The contract system is different from the 'hands-off boss' system. Constrained contracting (which can be supported by terminal mobile systems) can both activate distributors' subjective initiative and firmly control the core of market operations.
  3. No system is perfect; acting according to circumstances and weighing pros and cons is the best strategy.
  4. 'Use people without suspicion; suspect people without using them.' Since you have selected distributors eligible for delegation through your own evaluation system, boldly employ them. Let them integrate their own resources, leverage their strengths, and strive in the increasingly fierce competitive environment. Take Nongfu Spring's 'Delegation' as an Example I. Distributors changed from followers to market-leading operators. Previously, Nongfu Spring's sales staff all belonged to the brand owner (market expenses, channel expenses, channel price system, gross profit space, etc., were all defined by the brand owner), and distributors' responsibilities were mainly supporting roles such as warehousing and distribution. Except for payment, shipping, warehousing, and timely delivery, they had almost no say in market operations. At that time, many people who had never been involved in FMCG were working as Nongfu Spring distributors because it was easy and worry-free to make money. Later, the market was returned to those distributors with operational capability and willingness, and the distribution rights, market leadership, and operational advice rights were all placed at the distributor level, giving distributors ample room to develop. At the same time, distributors also assumed their due obligations, including achieving targets, maintaining prices, building brands, expanding markets, etc., and also accepted Nongfu Spring's systematic assessments, including performance achievement rates and basic market work execution. II. Brand owners became behind-the-scenes coaches and referees. The main responsibilities of the brand owner's marketing team became: service and support to distributors (conveying policies and information, providing market and execution data, providing distributor training, mentoring sales representatives, helping potential distributors), performance management (high performance: priority for awards, creating model markets, setting up exemplary distributors; low performance: support and rectification, account closure warnings), inspection and supervision, and penalty for violations, etc. This reallocation of rights, responsibilities, and benefits between manufacturers and distributors effectively stimulates distributors' subjective initiative. Previously, great effort was spent on managing distributors; now it becomes distributors spontaneously operating the market, improving the organization's operational efficiency. At the same time, after service quality improves, sales also steadily increase with the change in model.