Core Tip: Brand transformation is a key marker of modernization for traditional distributors. In the past, distributors merely helped brand companies sell products and brands, but future modern distributors must learn brand management to cultivate and build brands.

  1. Channel Transformation Channel transformation requires traditional distributors to operate, maintain, and manage their own systems, and to develop their own retail outlets, including self-built, self-operated, and jointly operated terminal networks, forming a stable downstream network to compete effectively in the market. Previously, they only sat in their stores, waiting for customers in wholesale markets and terminals, and apart from knowing where customers were from, they basically had no idea where the goods were sold.

Channel transformation is necessary for the evolution of current channel models. As channel reform deepens, China's traditional channel models must shift to modern ones to better meet the needs of economic and social development.

Many traditional distributors are already undergoing channel transformation. In 2008, I had the opportunity to gain an in-depth understanding of distributors' channel transformation as an industry insider, visiting Zhejiang and Jiangsu. In Suzhou, I accompanied local distributors to rural towns to inspect their self-operated channels, and objectively speaking, they were no worse than some of our salespeople. Naturally, such distributors became sought-after clients for competitors. Similar success stories exist elsewhere, such as Hengxing Company in Linyi wholesale market, Shandong. Facing increasingly severe market conditions, they decisively left their stores to develop rural outlets. According to statistics, compared to 2008, Hengxing added about 3,000 rural outlets in southern Shandong this year, and now has over 7,000 rural outlets in Zaozhuang, Linyi, and Rizhao, with annual sales of over 3 million yuan. Although this is just a small slice of Hengxing's projected 2009 total sales of 180 million yuan, the rural market is undoubtedly a growth stock.

  1. Enterprise Transformation Enterprise transformation requires distributors to learn modern enterprise management and operation methods, moving away from traditional storefront-style, disorganized, undisciplined, and unplanned distribution. They should operate and manage their business in an enterprise-like manner, establishing short-term and long-term goals, business philosophy, business plans, management standards, and capital control, transforming their product distribution into a distribution company. This not only enhances their market competitiveness but also helps distributors evolve from small bosses to entrepreneurs.

Notable examples of enterprise transformation include Jima Wine and Beijing Chaopi Trading Co., Ltd. Jima Wine has established over 2,000 offices nationwide, built tens of thousands of terminal outlets, and set up four major marketing divisions in South China, East China, West China, and North China, forming a three-tier marketing system centered on provincial capitals, focusing on prefecture-level cities, and radiating to county-level cities. In 2004, national red wine sales were 280,000 tons, and Jima Group sold 25,000 tons, earning the title "P&G of Wine" from McKinsey, the world's most authoritative consulting firm, becoming the most renowned and powerful leading wine enterprise in the country. Beijing Chaopi Trading Co., Ltd. is a joint-stock enterprise transformed from Beijing Chaoyang Non-staple Food Wholesale Corporation through shareholding reform, with a total monetary capital injection of 80 million yuan. It currently has an intelligent office building of over 8,000 square meters, standard warehousing facilities of 45,000 square meters, over 140 new business vehicles, over 130 computers with Pentium 3 or above, and a full set of modern office equipment. Its management team has rich market experience and strong adaptability.

  1. Brand Transformation Brand transformation is a key marker of modernization for traditional distributors. In the past, distributors merely helped brand companies sell products and brands, but future modern distributors must learn brand management to cultivate and build brands. On one hand, they build brands together with companies; on the other hand, they can establish their own brands.

Many successful brands today were established by distributors, such as Liby and Dayun Motorcycle in Guangzhou, and Renhe in Jiangxi. Dayun Motorcycle was established and promoted in 2005 by a distributor who previously dealt in Dayang Motorcycles, and now it has both its own brand and factory.

Liby, a benchmark brand in China's daily chemical industry, was established by Chen Kaixuan, a former detergent distributor. During the Spring Festival of 1987, Chen Kaixuan used 3,000 yuan to buy two full boxes of detergent and shampoo, thus entering the daily chemical industry. He then founded a trading agency company, distributing foreign detergents and daily necessities. After several years of accumulation, he opened his own shopping mall and gradually became the largest trader of detergents and daily necessities in Puning, with business expanding to Guangzhou, Shenzhen, and the Pearl River Delta. After accumulating experience and connections through trading, Chen Kaixuan felt that the detergent industry was profitable and conceived the idea of starting his own factory. In 1991, he registered the Liby trademark—at that time, it was just a brand without even a factory or products.

To date, Liby has become one of the two major daily chemical brands, alongside Diao Pai.

In addition to completing the three modernizations, traditional distributors must also learn to plan their careers. Everyone's career is constantly improving, and a distributor's career will also advance with market and time. However, to be a successful distributor, one must have such a career plan. If five years is considered a milestone, distributor friends might as well make three five-year plans for themselves.

-END-

Content Selection Reply with the following keywords to search and read related articles: Sales Supervisor, Second-Tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Slow Sales, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Deals, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-Region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Inventory Pressure, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Debriefing Report.