---
title: "The Self-Deceiving Manufacturer-Dealer Relationship Can No Longer Be Sustained"
description: "After extensive discussions with brand owners and distributors, the author concludes that the manufacturer-dealer relationship must change or collapse. The past year has seen unprecedented inventory pressure, sluggish sell-through, disputed expense reimbursements, price erosion, and widespread channel conflict. The old growth model of pushing inventory is no longer viable in an era of oversupply, and the future requires a shift from a 'upstream-downstream' dynamic to a 'left hand-right hand' partnership focused on matching supply with demand and moving toward the consumer."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-12-28"
categories: "Dealer Operations"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/x9lntYl85zte5t8XxYJmeg"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-self-deceiving-manufacturer-dealer-relationship-can-no-longer-be-sus-0f2603b1/"
citation: "任文青Andy. “The Self-Deceiving Manufacturer-Dealer Relationship Can No Longer Be Sustained.” New Distribution, 2025-12-28. https://xinjignxiao.com/en/articles/the-self-deceiving-manufacturer-dealer-relationship-can-no-longer-be-sus-0f2603b1/"
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---

# The Self-Deceiving Manufacturer-Dealer Relationship Can No Longer Be Sustained

> After extensive discussions with brand owners and distributors, the author concludes that the manufacturer-dealer relationship must change or collapse. The past year has seen unprecedented inventory pressure, sluggish sell-through, disputed expense reimbursements, price erosion, and widespread channel conflict. The old growth model of pushing inventory is no longer viable in an era of oversupply, and the future requires a shift from a 'upstream-downstream' dynamic to a 'left hand-right hand' partnership focused on matching supply with demand and moving toward the consumer.

"The manufacturer-dealer relationship, if it doesn't change, can no longer be sustained!"
This is the sentence that came to my mind after communicating with numerous brand owners and distributors.
Over the past year, the industry has seen a large number of suffocating scenarios:
  * Inventory pushed to the limit, with weak sell-through at the terminal
  * Expense reimbursements backlogged across years, with both sides bickering
  * Price systems unable to hold, with gray-market goods flying everywhere
  * Unprofitable brands being cleared out in batches by distributors
......
Inventory is high, turnover is imbalanced, profits are bottoming out, and emotions are polarized as never before.
They call distributors "partners" verbally, but in reality, distributors are the manufacturer's "reservoir"—when data looks bad, they push inventory onto distributors.
There are no good or bad people; in the past, this was indeed an effective way to grow.
In the era of increment, the brand's demand was expansion, and the dealer's value was coverage.
  * Consumers wanted to buy more goods
  * Terminal shelves expected more SKUs
  * Various categories urgently needed to create more brands
  * Companies were eager to stake claims and expand scale
The value chain was designed as a single line, and each party could get a piece of the pie.
Such manufacturer-dealer collaboration was essentially a product of the times.
But today, this logic has completely failed. At this point, calling each other partners while continuing to push inventory feels somewhat "self-deceiving."
What I want to talk about is not a matter of morality or right and wrong, but a matter of changing times and business logic.
It must be clear: we are in a completely different era—not an era of stock, but a deeper structural trend—an era of surplus.
What is the difference between an era of stock and an era of surplus? Isn't it just a matter of wording?
No, it's not.
Behind this lies a recognition of the current structural contradictions, and it concerns the directional question of how we should transform.
For the past 40 years, we have been in an era of increment, and that statement is not wrong.
The so-called increment is essentially an increase in demand.
As growth slows and involution intensifies, many people naturally think we have entered an era of stock.
But what is stock? The assumption behind it is that demand no longer increases.
This expression has huge problems.
First, "stock" is not the actual situation.
Whether you look at GDP or total retail sales, from the macro data dimension, demand is not not increasing; it is slowing down.
From a micro-structural perspective, it is the mass-media-driven, production-centered, standardized batch-manufactured demand that is decreasing, while fragmented, immediate, emotional, and stratified demand is growing.
Second, the "stock" statement will cause us to mistakenly continue the old logic.
In the era of increment, the core logic was "compete," comparing who runs faster!
In the era of stock, the core logic is "fight," comparing who grabs more!
What is the result? Involution, low prices, low quality, and homogenization.
High targets and aggressive inventory pushing are a continuation of this logic.
The result is that brand price systems collapse, gray-market goods fly everywhere, distributors don't make money, and the manufacturer-dealer relationship cannot hold.
The era of surplus, from this perspective, points to the structural imbalance after the over-expansion of the supply system: it's not that there is no demand, but that demand is drowned in redundant supply and information noise.
Over the past 40 years, we have roughly experienced a process of supply falling short of demand, then both supply and demand flourishing. Today, we have officially entered the stage where supply exceeds demand. But oversupply is the surface; the essential core is: some supply is not needed, and some needs are not met.
You must know that every box of goods you push is likely a misjudgment of demand.
In the era of surplus, the core logic is "match"—the "match" in "matching."
Only when supply and demand match can consumption occur.
Match what?
  * Matching products with real needs
  * Matching flexible supply with situational needs
  * Matching the distribution system with retail rhythm
  * Matching manufacturer and dealer roles with value
In the past, we compared "distribution capability"; in the future, we will compare "matching capability."
Take the recent hot instant retail as an example.
In my analytical framework, it belongs to the category of "new paradigm of platform retail."
We divide demand into two types:
  * General: mass-media-driven / long-term stable / single structure
  * Situational: fragmented / immediate / emotional / stratified demand
Correspondingly, supply is also divided into two types:
  * Standardized: production-centered / standardized batch manufacturing
  * Flexible: based on data feedback / small batch / high frequency
What can we find?
Traditional retail is actually the intersection of standardized supply and general demand. But situational demand is rising, and traditional retail cannot satisfy this part.
Recently, internet platforms have been increasing their investment in the retail side, not only instant retail, but also offline physical stores, such as Chaobox NB, Meituan Happy Monkey, JD Discount Supermarket, and Meituan's Xiaoxiang Supermarket opened its first offline store in Beijing recently, and so on.
I collectively call them: the new paradigm of platform retail.
They actually use rich data capabilities and strong supply chain control to precisely match "situational demand" with "flexible supply," thereby opening up a brand-new market space.
Platforms are entering the market not because offline is attractive, but because the traditional retail system is increasingly unable to meet new consumer demands, and this "blank space" has become too large to hide.
We pay attention to instant retail not only because it is an incremental channel.
More importantly, it is an early interpretation of the future supply-demand relationship and the clearest sample of the "matching logic."
In fact, the current changes in channels are all interpreting this logic.
For example, hard discount is not simply low price, nor is it "de-branding"; it is matching the strong preference for "certain price bands."
Supermarket renovation is not decoration; it is redoing the category structure. Cutting long-tail, strengthening fresh food, and creating scenarios are rebuilding supply to match the changing needs of customer groups.
Another example: why are retailers now building supply chains based on centralized procurement?
Because in the past, the core of the retail supply chain was stability, scale, efficiency, and cost.
But in the era of surplus, the logic of the supply chain has changed to small batch, high frequency, short chain, and rapid response.
The entire circulation chain must become a "matching system," and the retail supply chain is just one part of it.
After explaining the logic behind this, the question arises: under such circumstances, how should the manufacturer-dealer relationship change?
In one sentence: from "upstream and downstream" to "left hand and right hand."
The reconstruction of the future manufacturer-dealer relationship will revolve around three key propositions:
1. Can manufacturers stop pushing inventory?
In the era of surplus, pushing inventory is not capability; it is a growth illusion.
In the past, manufacturers called distributors partners, but in reality, they were in an "upstream and downstream" relationship.
It was natural for the upstream to push goods to the downstream.
But true partners are "left hand and right hand."
Passing goods from the left hand to the right hand is meaningless!
2. Can distributors transform into operators?
In the past, distributors were a handling system: responsible for distribution, channeling, and inventory holding, serving as waypoints in the chain.
But in the era of surplus, pure distribution has no value.
Inventory is a negative asset, and distribution is cost accumulation.
Future distributors must become "operators"—understanding both supply and scenarios; able to both list products and increase volume.
This means three things: being able to read data, no longer doing business by feel; being able to operate the C-end, no longer just doing B-end handling; being able to do small-scale, high-frequency, flexible supply scheduling.
In one sentence: from being a goods handler to becoming a "business unit" of the market.
3. How to jointly build toC capabilities?
In the past, manufacturing, distribution, and retail were separated from each other.
In the future, the three parties will collaborate within the same "supply-demand loop."
Where does demand come from? In what scenario is it triggered? Which channel should handle it? These must be jointly built.
In the past, brands set strategies, distributors executed, and retail cooperated. In the future, the three parties must jointly define "price bands, scenarios, and SKU structures" (partly brand x retail, more often brand x service provider x retail).
Final Thoughts
The problem with the manufacturer-dealer relationship is not that either side is wrong, but that the underlying logic of the times has changed:
Demand is more fragmented, supply is more flexible, and channels are more multi-track. The old model of "standardized manufacturing—large-scale distribution—interceptive selling" can no longer handle today's consumption structure.
Future growth comes from whoever understands the C-end better, is closer to the C-end, and can serve the C-end better.
Brands, distributors, and even retail are no longer upstream and downstream, but must become "left hand and right hand" collaborating around the demand loop.
This is also the core of our March conference discussion—moving toward the C-end!
"Moving toward the C-end" is not a slogan, but a way of survival for the industry.
Who does the future belong to?
It belongs to those who first complete the "reconstruction of the manufacturer-dealer relationship." In the next three years, all growth, all collaboration, and all organizational adjustments will ultimately fall on these five words.
**[Moving Toward the C-end] The 11th China FMCG Conference**
**Time: March 16-18, 2026**
**Location: Chengdu, China**


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## Citation metadata

- Publisher: New Distribution
- Author: 任文青Andy
- Published: 2025-12-28
- Canonical: https://xinjignxiao.com/en/articles/the-self-deceiving-manufacturer-dealer-relationship-can-no-longer-be-sus-0f2603b1/
- Original source: https://mp.weixin.qq.com/s/x9lntYl85zte5t8XxYJmeg

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