Recently, I met with several distributors.

"Since last year, things have completely changed. Instant retail has had a particularly obvious impact on the catering and beverage business. Orders placed on platforms are delivered in ten minutes, and prices are even lower. Catering stores and hotels have seen a cliff-like decline, which has hit my business hard," a beverage and catering distributor told me.

"When doing market work now, many promotional tactics no longer work. What really matters is having a good product portfolio," shared a daily chemical distributor.

Some distributors are in a completely different state.

A distributor of snacks and instant drinks in Chengdu said, "It's true that the industry is difficult now, but if bosses just complain about the market, manufacturers, and teams, they won't solve anything. What we really need to do is break down the basic links—finance, procurement, warehousing, business, stores, and products—and squeeze out inefficiencies and improve efficiency one by one."

These comments together represent the real state of distributors today.

On one hand, the external environment has indeed changed. Manufacturers no longer rely on layers of distribution as they did in the past. Platforms and chain systems are becoming stronger, terminal prices are more transparent, and business is indeed harder than before.

On the other hand, distributors must re-examine themselves internally. Many companies have been in business for ten or twenty years, with warehouses, vehicles, teams, and customers on the surface. But when you seriously calculate, how many customers are truly profitable, how many products truly generate profit, and whether each salesperson is productive—the boss may not be able to say clearly.

Based on these exchanges, let me share some more specific feelings. The most important thing for distributors today is not to chase every new trend, but to return to the essence of business and redo their own business.

Bosses Must Stay Close to the Frontline

From these exchanges, the deepest impression I have is that distributor bosses cannot be too far from the market.

Many distributors, when they first started their businesses, personally visited customers, inspected goods, delivered, and collected payments. At that time, bosses were close to the market, knowing clearly why customers took goods or not, which products sold well or had problems, and whether accounts had risks.

As business grew, with teams, warehouses, and systems, bosses gradually retreated to offices, reading reports, listening to briefings, and holding meetings. They are still managing the company, but they are increasingly far from the real market.

The problem is that many operational issues today are not directly reflected in reports.

Reports can tell you sales are declining, but they can't tell you why customers aren't repurchasing. Systems can tell you how much inventory you have, but not necessarily whether those goods can still be sold. Salespeople say prices are high, but the real problem might be wrong products, poor displays, or competitors changing their tactics.

"In the office, you'll likely always hear about difficulties. So when I'm not busy, I insist on going to stores to check products, displays, prices, and sell-through. I know clearly which stores can sell which products, which products should be launched, which should be eliminated, and where to test a new product first," a snack distributor told me. Despite the impact of snack stores, his business has maintained slight growth.

So, bosses on the frontline is not about replacing the team's work, but about regaining judgment.

Go to stores to check shelves, go to warehouses to check turnover, run with salespeople to visit customers, review new products with procurement, and calculate real profits for customers and routes with finance. Many answers are not in meeting rooms, but in these specific scenarios.

Don't Just Look at Sales Volume; Look at Profit

Many distributors are used to looking at sales volume. How much was shipped this month, how much of the task was completed, how much growth compared to last year, how much rebate the manufacturer gave—as long as sales are still there, the business seems fine.

Sales volume is certainly important; without a certain scale, efficiency, procurement, warehousing, distribution, and teams are hard to amortize.

But the problem is that when the industry enters a stage of stock competition, much sales volume no longer equals profit, and some sales are even loss-making.

In the past, when people heard sales were declining, their instinct was that business was worse. But if gross profit is rising, expenses are falling, and accounts are healthier, the company's real state might actually be better.

Conversely, some distributors appear to have large sales, busy warehouses, and vehicles running every day, but at year-end, money is tied up in inventory, receivables, expenses, returns, and logistics costs, and the boss isn't making money.

Looking only at sales revenue can easily be fooled by superficial prosperity.

A customer who takes goods worth hundreds of thousands a month, but with long payment terms, high expenses, and many returns, may not be a good customer. A brand with large shipments, but requiring expense advances, price inversions, and handling of near-expiry products, may not be a good brand. A route with daily deliveries, but low loading rates, low labor efficiency, and high fuel costs, may be losing money to serve.

This is also an area many distributors easily overlook. During growth, sales volume can mask many problems. As long as the pie keeps growing, manufacturer expenses keep up, and terminals are willing to stock up, many inefficiencies can be absorbed by scale.

But now it's different. Expenses are shrinking, prices are more transparent, customer sell-through is slowing, inventory turnover is slowing, and all hidden costs will gradually surface.

So, distributors now need to recalculate their accounts. Not just asking how much was sold this month, but asking how much profit each order brings, how much gross profit each customer contributes, how much capital each brand occupies, whether each route is efficient, and whether each salesperson brings real profit or false prosperity.

Healthy Cash Flow Matters More Than Customer Count

Most distributors care a lot about customer count. The number of stores served, outlets covered, and systems entered is often seen as proof of strength.

In today's environment, what determines a distributor's sense of security is not how many customers are on the books, but whether those customers are healthy: whether they can pay, repurchase, bring gross profit, and reduce ineffective consumption.

A distributor shared a case with me: a chain convenience system with dozens of stores, already cooperating on snacks and instant drinks, wanted to add beverages. It sounded like a good opportunity, with about 100,000+ in monthly sales, but they proposed to withhold 80,000 in payment. He didn't agree immediately; instead, he first asked finance to calculate whether it was "worth it." If profit could cover the capital occupation, then do it; if it just added sales volume but tied up money, then be cautious.

In the past, many distributors would likely take such an opportunity first, given the 100,000+ increment. But today, you can't calculate so simply. Sales are just the surface; behind them are payment terms, gross profit, returns, delivery, personnel, and capital occupation.

What's worse, unhealthy customers can drag down the company's rhythm. Customers who delay payments for a long time occupy capital; customers who only take low-priced goods lower gross profit; customers with poor sell-through and many returns occupy warehouse and business resources.

Distributor bosses now need to ask themselves several questions: Is this customer actually profitable? How long will this receivable take to come back? Is this route worth running? How much capital does this system tie up? How much inventory does this brand occupy?

Customer count is superficial prosperity; healthy cash flow is the underlying security.

A Good Product Portfolio Is More Useful Than Promotions and Low Prices

A distributor of paper hygiene products left a deep impression on me. She works with supermarkets, not by offering the lowest prices or the longest payment terms. Even when new stores initially wanted to cooperate, she insisted on cash payment; if they didn't accept, she'd rather not do business. But later, some stores still proactively sought her out.

Why? Because the products she has can sell, bringing foot traffic and real sell-through to stores.

She mentioned a detail: once, she supplied goods to a store, delivered at 10 a.m., and they sold out by 8 p.m. Some paper products and wet wipes that stores didn't initially value later proved to have good sell-through, so stores proactively gave them better positions and took more stock.

This is the value of product strength.

Today, what stores fear most is not suppliers not giving policies, but goods sitting still. If a product can sell, bring foot traffic, and show real results, price is not the only negotiation condition.

Conversely, if the product itself doesn't move, giving more expenses or lower prices just moves inventory from the distributor's warehouse to the store's shelves.

In the past, the core of distributors was to secure brands, expand channels, and build relationships. In the future, the core is whether they can judge which products suit the local market, which suit a particular channel, which bring gross profit to stores, and which consumers will repurchase.

Promotions solve temporary sell-through; sell-through solves long-term business.

Don't Easily Touch E-commerce

In recent years, many distributors think of e-commerce when facing growth pressure.

Offline is hard; should we open a Pinduoduo store? Inventory is piling up; should we put it on Taobao or JD to clear? Manufacturer tasks are pressing; should we run some volume online to complete tasks?

E-commerce is not impossible, but I want to remind you: distributors should not treat e-commerce as a lifeline.

"When volume picks up, we could have over 6,000 orders a day, for several consecutive days. It sounded great, but later when we calculated, we found orders were fragmented, labor was heavy, courier fees were high, and carton and consumable costs were high. In the end, we were just 'earning carton money' and 'earning scrap money,'" a snack distributor told me.

E-commerce is not untouchable, but you need to be clear about your purpose.

If it's just to handle near-expiry products, clear inventory, or complete manufacturer tasks, you can treat it as an outlet, but not as a main growth channel.

If you really want to make e-commerce a business, you must have several prerequisites: Do you have exclusive specifications? Customized products? Price differentiation? A dedicated team? Have you fully calculated courier, cartons, after-sales, and taxes?

If none of these are in place, and you just sell offline circulation products on platforms, you'll likely fall into low-price competition.

Turn Data into Business Judgment

Finally, I want to talk about something that struck me deeply in these exchanges: the most valuable asset for distributors is not warehouses, vehicles, or a brand agency, but the long-accumulated local business data.

In the past, many distributors relied on experience. Which customers are good, which are bad, which products sell, which don't—the boss had a rough idea. This is certainly an advantage.

But today's problem is that the market changes too fast, channels are too fragmented, and product iterations are too quick. Relying only on the boss's experience is no longer enough to support the company moving forward.

"When we launch products now, it's no longer 'sell what I have,' but the reverse: we push procurement based on store and consumer demand. Which stores should carry which products, which categories should be eliminated, new products should be tested in 50 stores first, and then we look at repurchase data—all of this must be data-driven," a snack distributor shared with me.

This is different from traditional distributor operations.

In the past, systems were more like bookkeeping tools, recording purchases, sales, inventory, and receivables/payables. Now, data should become a business tool.

It should tell the boss which customers are worth continued investment, which are just occupying capital; which products truly contribute profit, which just occupy warehouse space; which salespeople look busy but have poor output; which routes run every day but are inefficient.

What distributors need to do now is to accumulate, organize, and use their business data. Especially today, when AI is already very powerful, data can be fully utilized.

This is also what we want to focus on at the "2026 China FMCG Conference AI Application Forum." The value of AI for distributors is not just writing copy, making images, or generating tables, but whether it can truly enter the business scene, helping bosses see customers, products, inventory, profit, and risks clearly.

For distributors, AI is ultimately not just another tool, but an "operations advisor" that monitors business, reviews data, and reminds of risks.