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When we go to the market and chat with distributor friends, many of them will respond that business is getting harder and harder. Pressures from sales, capital, warehousing, personnel, terminals, channel costs, and even the internet are increasing, and many distributors even feel a bit breathless. Ren Lijun says that a common question distributors ask is, "Is the era of distributors about to end?" Ren Lijun points out that although the entire Chinese economy is facing transformation and upgrading, it has not yet reached the point where the era of distributors is ending. He even predicts that the channel model operated by middlemen may still have further room for development and will not easily come to an end. However, for traditional distributors, if they cannot successfully transform their mindset, it is very likely that their own companies will reach the end. Therefore, he reminds distributor friends to have a sense of urgency and be prepared for transformation and upgrading.

Distributors Need to Adjust Their Positioning

Distributors have always been a special type of business entity. They achieve profitability by selling products from different companies to distributors or retail terminals. This has formed a fixed mindset in traditional distributors: they are the best maintainers of channel relationships, and through these relationships, they control a portion of channel resources to achieve distribution and profit. Obviously, if distributors still hold this concept, it may be quite dangerous.

Therefore, distributors need to adjust their positioning, shifting from the traditional middleman role to that of a channel value creator. Traditionally, we generally believed that distributors achieve profitability by selling or renting out channel resources. After marketing entered the era of Marketing 3.0, the transmission and realization of channel value have become higher requirements that companies place on distributors. The value created by distributors through channel operations is precisely the source of their profitability. Although the channel resources controlled by distributors are still important, how to operate products and brands through these channel resources to create value is a question that distributors must seriously consider.

Based on this positioning adjustment, the introduction of resources from the upstream and downstream industry chain, as well as the level of integrated operation of channel resources, have become standards for measuring a distributor's capability and profitability. Whether a distributor can gain the favor of companies or products with good market prospects will largely depend on a series of adjustments starting from the distributor's positioning and the effects brought by those adjustments.

Distributors Need to Become Professional Marketing Execution Institutions with Brand Power

Currently, very few distributors have their own brands. Many distributors have transitioned from individual businesses to limited companies, but due to deep-rooted traditional business concepts, they still do not have their own brands. Even if some distributors claim to have independent brands, upon closer questioning, it turns out they are OEM product brands created through commissioned processing. Distributors as limited liability companies do not have brands. Obviously, this situation needs to be changed. Many distributors have already realized this problem, or some distributors in certain industries are beginning to realize it. The construction and development of distributor-owned brands have been put on the agenda.

As a professional marketing execution institution in the channel, it is very necessary to build a distributor brand with brand power. For example, Beijing Chaopi is a leader in distributor brand building. In fact, Ren Lijun raised this issue as early as ten years ago. Since retail terminals like Carrefour, Walmart, RT-Mart, and Wumart can create commercial brands with strong brand power, why can't distributors create their own commercial brands? At that time, everyone focused on the development and utilization of channel resources, neglecting the construction of distributor brands. Now, the professional capabilities required of distributors as professional marketing execution institutions are increasingly strong. Many distributors have formed their own unique distribution models and business ideas. Creating a brand to carry the professional skills of distributors seems imperative.

Distributors Need to Create Marketing Management Models

Distributors are not commercial units that buy low and sell high to earn price differences, but rather creators of channel value, thereby maximizing their own value. Therefore, this requires distributors to create their own marketing management models to provide good marketing guarantees for the connection of upstream and downstream enterprises in the channel.

Successful distributors with brands all have their own unique marketing management models. This marketing management model is the distributor's "unique secret," their core competency, and their magic weapon for making profits. As the saying goes, "Without rules, there is no standard." For distributors, the determination of a marketing management model means the establishment of channel construction, product mix, marketing system structure, organizational operation processes, etc. This is a process of trade-offs and a reference standard for distributors when facing many products to choose from. If such a marketing management model is lacking, distributors are easily confused when faced with many temptations. They want to do whatever makes money, and as a result, they deviate from their main business and development direction, "picking up sesame seeds and losing watermelons," making it difficult to build their own advantages on the path of specialization, unable to attract the attention of excellent companies, and thus losing the opportunity to become big and strong.

Distributors' Concept Shift from Control to Service

Traditionally, the purpose of a company becoming a distributor is to achieve rapid distribution through the distributor's network channels. A strong distributor can quickly distribute products to any channel within its jurisdiction in a short time, achieving the goal of meeting consumers and realizing sales possibilities. As a distributor, to achieve strength, it must possess this core competitiveness, which is the ability to control channel members at the terminal. Because for the distributor group, in terms of capital strength, personnel, or other aspects, it is difficult to gain an advantage compared to enterprises. However, in terms of timing, location, and harmony, distributors undoubtedly have more advantages. This is also where distributors can easily build their core capabilities. To achieve this, distributors need to ensure that their channel members can make profits, and through services to channel members, they can free them from worries, making channel members trust and support them. In this way, distributors can have long-term cooperation with excellent enterprises and strengthen their own capital.

Modern enterprises require distributors to shift from the concept of resource control to the concept of service, because controlling resources cannot create value, while service can create added value. The stage of resource control was the root cause of price wars and promotion wars in the past. The service concept can effectively avoid price wars and promotion wars, and can also prevent other channel interest temptations from seizing channel resources. Ren Lijun points out that the core competitiveness of modern distributors has quietly changed. The most important change is the change in the function of distributors as intermediate institutions in commodity circulation. The service function in the channel chain has replaced the traditional distribution function, and can help upstream and downstream enterprises create service value, in order to best serve final consumers.

Marketing Planning Expert's View

"Compared with traditional distributors, the obvious distinguishing labels of modern distributors are positioning, brand, and service," Ren Lijun points out. "Upstream enterprises have basically completed the transformation from extensive operation to precise operation. At this time, enterprises are also putting forward stricter standards when looking for distributors. Having a clear positioning, being a strong brand professional marketing execution institution, and being able to provide strong channel service capabilities have become three very important criteria for selecting distributors."

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