---
title: "Under the Epidemic, Distributors Are About to Collapse!"
description: "The sudden outbreak of the epidemic caught distributor Wang Ming off guard. If this continues, the 80,000 boxes of milk gift box inventory will crush not only him but also his hard-earned trading company. In December 2019, the manufacturer set a Spring Festival sales target of 18 million yuan for Wang Ming. Despite the pressure, Wang Ming gritted his teeth and accepted it, remitting the payment before January 20. Of course, more than half of this money came from 'short-term financing': 4 million yuan from the manufacturer's credit line and 4 million yuan from bank financing. Wang Ming thought that after the Spring Festival, by February and March, he could almost pay it back."
author: "佚名"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-02-09"
categories: "Dealer Operations"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/68jfzAS7G7eIkmVgZ0K7iA"
translation: "https://xinjignxiao.com/zh/articles/%E7%96%AB%E6%83%85%E4%B8%8B-%E7%BB%8F%E9%94%80%E5%95%86%E5%BF%AB%E7%86%AC%E4%B8%8D%E4%BD%8F%E4%BA%86-4423f163.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/under-the-epidemic-distributors-are-about-to-collapse-4423f163/"
citation: "佚名. “Under the Epidemic, Distributors Are About to Collapse!.” New Distribution, 2020-02-09. https://xinjignxiao.com/en/articles/under-the-epidemic-distributors-are-about-to-collapse-4423f163/"
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---

# Under the Epidemic, Distributors Are About to Collapse!

> The sudden outbreak of the epidemic caught distributor Wang Ming off guard. If this continues, the 80,000 boxes of milk gift box inventory will crush not only him but also his hard-earned trading company. In December 2019, the manufacturer set a Spring Festival sales target of 18 million yuan for Wang Ming. Despite the pressure, Wang Ming gritted his teeth and accepted it, remitting the payment before January 20. Of course, more than half of this money came from 'short-term financing': 4 million yuan from the manufacturer's credit line and 4 million yuan from bank financing. Wang Ming thought that after the Spring Festival, by February and March, he could almost pay it back.

The sudden outbreak of the epidemic caught distributor Wang Ming off guard.
If this continues, the 80,000 boxes of milk gift box inventory will crush not only him but also his hard-earned trading company.
**In December 2019, the manufacturer set a Spring Festival sales target of 18 million yuan for Wang Ming. Despite the pressure, Wang Ming gritted his teeth and accepted it, remitting the payment before January 20.**
Of course, more than half of this money came from 'short-term financing': 4 million yuan from the manufacturer's credit line and 4 million yuan from bank financing. Wang Ming thought that after the Spring Festival, by February and March, he could almost pay it back.
Although Wang Ming knew well the difficulty of completing the task, no matter what, he paid the money first to meet the sales target, and the goods could be picked up slowly. Before New Year's Eve, the manufacturer shipped 7 million yuan worth of goods to Wang Ming, and after New Year's Eve, another 1 million yuan worth (mainly short-shelf-life milk) was shipped.
Once New Year's Eve passed, after the second day of the new year, the epidemic broke out fully. Wang Ming's city is a second-tier city, and the local government immediately implemented various epidemic prevention measures.
After the comprehensive prevention work began, Wang Ming panicked, **because his warehouse still had 80,000 boxes of room-temperature gift boxes, which had barely moved. The main consumption scenario for gift boxes is visiting relatives and friends, and the epidemic caused sales to drop to nearly zero.**
**-01-
**A 'Self-Rescue Battle' with Little Effect**
Panic is one thing, but he absolutely couldn't sit still and wait for death.
Starting from the second day of the new year, Wang Ming began self-rescue, taking action first. Although the city was under epidemic prevention, logistics were restricted, and roads were blocked, fortunately, milk is a livelihood supply product, so special passes could be obtained. Logistics and distribution issues had little impact on Wang Ming.
Logistics wasn't the key; the biggest headache was sales. Wang Ming had previously operated community group buying, though only for half a year, with 18 communities. The community leaders knew Wang Ming's pressure and kindly helped contact business, but they couldn't sell more than 100 boxes a day.
Wang Ming also cooperated with well-known community group buying companies, but sales remained sluggish.
Relying on local online channels didn't seem to work, so he mobilized offline supermarket store owners, not thinking about making money, and offered an additional 3 yuan per box as commission to drive them to sell actively and deliver to consumers' doors. He thought that with such a big effort, there should be good results. But unexpectedly, after communication, the response was: they all shook their heads.
"**Now is a special period; ensuring personal safety is the top priority. It's not worth earning an extra 3-5 yuan. Sell as much as you can. With such a big brand, the manufacturer will have to handle it anyway, and I'm not afraid of it rotting in my hands**," this was the feedback Wang Ming got when he personally called a store owner.
The only lucky thing was the hypermarkets. The previous relationship was good, and the hypermarkets agreed to delay payments to other suppliers, giving priority to Wang Ming's payments no matter what.
He basically tried all sales channels, used all personal connections, and thought of all ideas. He even tried various ways to break into local pharmaceutical chain stores.
From the second day of the new year, Wang Ming launched an 'all-staff self-rescue battle,' but to this day, it has had little effect. There's no choice but to continue self-rescue with a stiff upper lip!
**-02-
**If This Continues, He Can Only Last 2 Months**
He carries 8 million yuan in loans, but that's not his biggest pressure. Wang Ming's biggest anxiety is capital turnover. He calculated that if the epidemic doesn't effectively ease, he can support at most 2 more months.
Monthly rent, warehouse, and personnel costs are 500,000 yuan, so 2 months means 1 million yuan in operating costs. Additionally, because there was no profit before the new year, plus the handling of cross-year products, he expects a loss of 1.5 million yuan. **The pressure of 2.5 million yuan is the limit Wang Ming can bear; once exceeded, the trading company can't continue.**
Not only the 80,000 boxes in the warehouse, but there's even more pressed in the channels before the holiday. Now, inventory adjustment is mainly through inter-channel transfers, moving goods from traditional small stores to hypermarkets. The warehouse inventory can't be moved at all now.
As anxiety spread, Wang Ming discussed solutions with cross-regional distributors around him, but the final conclusion was unanimous: no solution. Wang Ming calculated again: his current circulation channels, modern channels, and warehouse inventory total about 250,000 boxes. In his provincial capital city, excluding those who returned home for the holiday, the current population is 2-3 million. Adding distributors from other districts, the total inventory can meet the urban population's demand of 1 box of milk per person per day for 1 month.
Moreover, this is only for the brands he distributes; there are other dairy competitors, and they're selling quite a bit too. At this point, Wang Ming couldn't help getting excited: "Having been in milk distribution for so long, we've estimated that in a city like ours, a brand's annual sales are typically around 150 million yuan. But this year, the manufacturer directly pushed the sales target to 200 million yuan."
"**In the past, pressing goods was fine; they could always be sold, even if at a loss. Not making money myself, I could handle the pressure, and dumping goods outside didn't pose much risk.** But now, with a 200 million yuan sales target and pressing goods before the holiday, the local market isn't moving, logistics are closed, and we can't distribute outside. Wang Ming feels the manufacturer has overstuffed their stomachs, and they can no longer bear the pressure."
**-03-
**Understanding the Manufacturer, But Only Understanding**
Speaking of the manufacturer, Wang Ming feels a bit helpless.
Besides self-rescue, Wang Ming's last straw is the manufacturer. Wang Ming said, "**All our hopes now rest on the manufacturer's help. We haven't just sat idle; we've been working hard, starting action on the second day of the new year, dispatching vehicles, entering communities, group buying promotions, pharmaceutical chains—we've been thinking of ways. But under such circumstances, without the manufacturer's help, we definitely can't solve it.**"
What did the manufacturer do? They seem to be always making excuses. The previously discussed handling policies have yet to be confirmed. Without implementation, Wang Ming doesn't dare to act rashly. If he handles it completely on his own, he can't bear it. And the manufacturer's reply seems to always be: we're discussing, discussing...
Instead of tackling difficulties, they add fuel to the fire!
As of now, the manufacturer still continues to require Wang Ming to stock up. The reason for stocking is simple: **if the established sales target isn't met, the basic fees can be given, but the corresponding rebates won't be given.**
I asked why? Don't they know about the 80,000 boxes of inventory? Wang Ming said, "According to past practice, the factory has old goods every month, produced but not pushed down to distributors. Now it's February, and they've allocated 1.5 million yuan worth of January goods to me."
Wang Ming continued, "**I very much understand the manufacturer: the cows produce milk, and it must be digested by the market. But this is a critical special period. Shouldn't you first communicate with me about how to tide over the difficulties together and handle the inventory, rather than saying it's okay not to stock up, but the 1 million yuan cost from last month must be deducted? Communicate these things first...**"
At this moment, Wang Ming doesn't worry about the epidemic, inventory, or funds. **The only thing he wants is confidence. Confidence from the manufacturer, sitting down to discuss how to deal with the current predicament, not the achievement of sales targets.**
Wang Ming calculates that in the good years, he made some money, and to this day, he's willing to accept a loss of several million yuan due to natural disasters. But the most terrifying thing is the manufacturer's endless delay... (At the interviewee's request, Wang Ming is a pseudonym in this article)
**Conclusion:**
Under the epidemic, most distributors are struggling, especially dairy and beverage distributors. This article hopes that upstream manufacturers, during this special period of epidemic, will fully consider the situation from the perspective of partners, tackle difficulties together, and discuss countermeasures, rather than continuing to pressure for their own business.
Here, we also call on manufacturers to adapt to local conditions, introduce relatively reasonable solutions as soon as possible, and fight side by side with distributors! After the difficulties, spring will surely come. Only partners who truly share hardships can have loyalty.


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## Citation metadata

- Publisher: New Distribution
- Author: 佚名
- Published: 2020-02-09
- Canonical: https://xinjignxiao.com/en/articles/under-the-epidemic-distributors-are-about-to-collapse-4423f163/
- Original source: https://mp.weixin.qq.com/s/68jfzAS7G7eIkmVgZ0K7iA

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