Economic downturn, channel fragmentation, and shrinking profits—the FMCG battlefield in 2025 has seen the game between brands and dealers enter the 'deep water zone.' Manufacturers complain about dealers' 'lying flat to earn' mentality, while dealers accuse manufacturers of 'pressuring inventory and bleeding them dry.' But both sides know well: only by restructuring cooperation models can they break the zero-sum game and find breakthrough points for growth. The Significance of Channel Construction: The 'Vascular Revolution' of FMCG The ultimate battlefield for FMCG is the terminal shelf, but the key to victory lies in channel efficiency. Products must go through a 'two-step jump' from the production line to consumers: 'dealer → channel distributor → consumer.' The traditional distribution logic is simple and crude: pile up fees, compete for display space, and pressure inventory. But in an era of channel fragmentation and profit transparency, this model has shown signs of fatigue.

Cost out of control: In central cities, channel display fees have risen to thousands of yuan, overwhelming small and medium brands;

Insufficient coverage: In township markets, channel distribution covers less than 1/3, leaving many blank outlets unactivated;

Resource misallocation: Promotional expenses are diluted by downward price systems, with investment results less than satisfactory;

Imbalanced manpower efficiency: Manufacturer terminal staff have low distribution performance, which is a drop in the bucket compared to high targets. The essence of channel construction is to build a 'low-cost, high-penetration, strong-control' supply chain network through manufacturer-dealer division of labor and resource integration. It is not only a pipeline for product circulation but also a moat for brands against involution. Revelations from the Coca-Cola Model: The 'Detour Lessons' from GKP to MEP

  1. GKP Era: Channel dividends under extensive growth. Before 2007, Coca-Cola adopted the GKP (Golden Key Partner) model: dealers were responsible for warehousing and distribution, while manufacturer sales staff only served core terminals; relying on wholesalers' 'reservoir' function to quickly cover regional markets. But weak terminal control, insufficient market share, severe resource interception, and frequent cross-regional selling by secondary wholesalers became increasingly prominent contradictions.
  2. MEP Revolution: The 'ideal experiment' of refined operations. In 2008, Coca-Cola launched the MEP (Market Execution Partner) project. The reform was reflected in three aspects.

Terminal refinement: Electronic maps marked 90% of natural outlets, fully tapping wholesale downstream, adding suitable sales personnel, and standardizing route visits;

System empowerment: SFA order system + DMS dealer management system + BI data dashboard, achieving full-chain digitalization of 'order-distribution-analysis';

Role reshaping: Dealers transformed into 'logistics service providers,' earning monthly fixed operating fees plus variable cost subsidies.

  1. Channel imbalance taken to extremes. After the project was implemented, terminal coverage quickly rose to 85%, and distribution grew by 20% year-on-year. But within less than a year, market pains kept coming. Dealers 'lost more the more they entered,' and their willingness to stock up greatly decreased. Manufacturers had to artificially raise fixed costs to ease conflicts. Secondly, soaring labor costs could not be covered by product profits; thirdly, secondary wholesalers' interests were damaged, and their function as a sales reservoir failed. So, Coca-Cola had to return some outlets to wholesale customers, reintegrating wholesale as an important channel; at the same time, they increased dealer payment rebates and adjusted some overly fragmented regions.
  2. Reflection and iteration: Coca-Cola's case tells us that there are blind spots in manufacturer-dealer cooperation; we cannot sit back and wait, nor can we be too aggressive.
  3. Refined management and cost efficiency need dynamic balance; excessive control can backfire on the ecosystem;
  4. Secondary wholesalers are not 'roadblocks' but 'sponges' that buffer market fluctuations;
  5. There is no universal model; only 'personalized solutions' that truly fit the market. The Three 'Fatal Flaws' of Traditional Manufacturer-Dealer Cooperation Under high tasks, manufacturer sales staff often use excuses like competitive involution, consumption downturn, and insufficient resources. But they lack in-depth insight into the structural channel issues that truly affect sales.
  6. High-potential markets: Manufacturers engage in 'predatory development,' using high rebates and inventory pressure policies for short-term volume, ignoring the long-term health of the channel ecosystem. Case: A beverage brand in a provincial capital in Central China, to meet sales targets, long-term released high-tier policies to secondary wholesalers in the region, causing severe price inversion. The manufacturer lacked effective understanding of the flow of many wholesale products, failing to form orderly block-based, tiered, and differentiated management. The regional price system was chaotic and continuously declining, and brand sales only occurred with promotions, with reputation plummeting. Manufacturers treat high-potential markets as 'ATMs,' ignoring channel hierarchy management and profit distribution, leading to 'poor blood flow' in the channel.
  7. Low-lying markets: Manufacturers lack strategic confidence in low-penetration markets, either letting them go or developing them blindly in a 'fragmented' manner, causing markets to be continuously neglected and missing development opportunities. Case: A dairy company densely signed small dealers in townships of a western county. The average annual sales per customer was less than 10,000 boxes, with imbalanced input-output. Customers didn't make money, didn't stock up without activities, and were basically in a zombie state. Within two years, 70% of customers withdrew. To solve short-term sales problems, the manufacturer attracted customers with low prices, developing too many small and scattered dealers for sinking markets, ignoring customer quality and synergy effects. What was truly lost was the local customers' trust in the brand.
  8. Execution gap: Manufacturers over-focus on 'terminal visibility,' ignoring channel system construction, leading to misplaced resource investment. Case: A snack brand's dealer operated a direct-sales model. The manufacturer's sales staff were obsessed with the 'display space competition,' investing 60% of annual expenses in various displays, including floor stacks and end caps. Sales staff spent 90% of their time at terminals, providing all-day nanny-style service, exhausted daily, but the dealer's sales tasks increased slowly, with investment not proportional to returns. Some manufacturers equate 'terminal visibility' with 'market control,' ignoring channel water storage and traffic distribution, causing sales tasks to fail to be effectively carried by the channel. Guide to Building an Efficient Manufacturer-Dealer Cooperation Model To build an efficient cooperation model, first follow three principles.

  1. Leverage the localization advantages of dealers and wholesalers; manufacturers should not overstep their roles.

  2. Leverage the manufacturer's professional market operation advantages to provide dealers with forward-looking management ideas and guidance.

  3. Allocate resources in stages and with varying intensity to ensure reasonable profit margins for customers at all levels, without overdrawing future resources. In actual operation, you can create a 'manufacturer-dealer efficient cooperation channel alliance' in four steps. Step 1: Build tables and charts to profile and diagnose customers. Establish a comprehensive customer information table, covering core fields such as annual sales, agency brands, main channels, hardware configuration, annual/monthly payment and distribution data, and profit margins. Evaluate whether customers at all channel levels meet standards, focusing on whether distribution rhythm is healthy, cooperation willingness is strong, market penetration is in place, and profitability is advantageous. For customers with persistent problems, decisively replace them and screen out 'true gold' customers that fit market development. Step 2: Adapt to local conditions and build a pyramid product transfer structure. Differentiate channel structures by market size, city type, and development stage. For low-sales blank markets, recommend direct sales by customers; for high-potential markets, multiple levels and models should coexist, with reasonable evaluation based on local conditions. Fully leverage the network and customer relationship advantages of dealers and various types of wholesale customers (special channel wholesalers, regional distribution wholesalers, township distributors, etc.), mobilizing more local wholesale customers. Those who can cooperate should sign agreements; those who cannot should be managed with early warnings. Maintain price system stability and ensure customer profits. Step 3: Clarify division of labor and leverage respective advantages to create synergy. Manufacturer sales staff should focus on maintaining core high-competition outlets, while also being responsible for establishing and checking standards for routine execution and resource investment for customers at all channel levels. Channel customers should fully leverage local advantages, assist manufacturers in managing channel and regional wholesale customers, implement manufacturer promotion and marketing policies, and maintain the manufacturer's brand. Step 4: Review and improve, establishing a normalized tracking and feedback mechanism. Establish a product flow tracking mechanism for customers at all channel levels, especially monitoring distribution speed, policy implementation efficiency, personnel and vehicle support, performance achievement, and market order maintenance. Manufacturers should conduct business reviews with core dealers and important wholesale customers at least monthly. Internally, manufacturers should also have an independent management department to promptly study and judge various market issues in manufacturer-dealer cooperation, correct directions in a timely manner, and supervise rapid rectification. The competition in FMCG is essentially a competition in supply chain efficiency. When consumption enters the 'fragmentation era,' the relationship between manufacturers and dealers must evolve from 'buyer-seller' to 'community of shared destiny'—manufacturers provide brand momentum and systematic weapons, while dealers contribute local wisdom and agile networks. Only in this way can we tear open growth gaps in the stock market and hold the value bottom line in price wars. Xing Renbao, with 18 years of marketing management experience, has served at Coca-Cola, Yili, Red Bull, and other famous FMCG companies. He currently serves as Assistant to the President of Marketing Execution at Huabin FMCG Group, focusing on corporate marketing diagnosis, manufacturer-dealer relations, channel operations, and digital transformation.