One type is the hands-on distributor who does everything personally, from market development to delivery and collection. Such distributors will never grow big. Because one person can directly and effectively manage no more than 120 clients, and with helpers, the distributor's client base usually does not exceed 300, and the number of delivery vehicles they can command and manage is generally no more than four.

Another type of distributor that never grows big is the absentee owner who delegates everything. Having made some money in previous years, they hand over the business to family, relatives, or professional managers. As long as money is being made, they don't care about market conditions. But when they realize profits are declining, the market is already beyond repair!

What truly grows big are entrepreneurial distributors. Entrepreneurial distributors typically grow in the following ways:

First, when starting out, they must do it themselves—doing it personally helps them truly understand the market and control the channels more accurately.

Second, as the scale expands, they must cultivate several capable assistants. These assistants may be family members, relatives, or hired salespeople—through their own example and instruction, they build the first team. Only when the team grows can they themselves expand.

Third, when the scale reaches a certain level, they establish an organizational structure, implementing division of labor, profit sharing, responsibility, and risk sharing. If everything is entrusted to capable assistants, they might leave and take clients, causing great loss. The benefits of specialized division of labor are: first, everyone does what they are best at; second, everyone handles only part of the work, so any individual's departure won't cause significant loss.

Fourth, set up management and supervisory bodies. When the scale is too large, the owner cannot manage everything, so hierarchical management is necessary. After hierarchical management, the owner may feel uneasy, so supervisory bodies are established to check the work of managers and relevant departments.

Fifth, formulate corresponding systems and manage according to them. When the scale is small, everything is in the owner's head, and arrangements can be made in half an hour. At that time, having no systems might be more efficient. After expansion, management must follow systems, and the boss must also abide by them.

Distributors must learn to grow. Suggested learning targets:

First, distributors should learn management from excellent companies. The stricter the management, the more they should learn from them, even asking manufacturers to design management systems for them (the salespeople of Henan Wenyu Foods are a good example).

Second, learn management models from excellent distributors. You can ask manufacturers which distributors are doing well and then go there to learn.

If distributors progress slowly, they should hire a professional manager to handle management.

What should a scaled distributor do?

After expansion, the boss no longer personally handles the market. So what should the boss do daily? I think the boss should focus on three major tasks:

First, research the market. First, study manufacturers to understand their next moves. What are their annual plans, what products will they develop, how will they adjust the market, and how will they compete with rivals? Second, study other businesses: how other distributors operate, how terminals operate. Finally, study consumers and their consumption patterns.

Second, cultivate and select talent. The more talent, the bigger the business can grow. Distributors find it hard to recruit high-level talent, so they must cherish talent.

Third, formulate rules and regulations. Without rules, nothing can be accomplished. Once systems are in place, act according to them, making management much easier.

No matter what you do, you must do the distribution mechanism well. Chairman Mao's famous phrase "Down with the local tyrants, divide up the land" mobilized the fighting spirit of the entire proletariat!

In 2016, if distributors want to become strong, they must divide money well (current money and future money), and they will be 80% successful!

-END-

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