---
title: "What Are the Differences in Interest Demands Between Manufacturers and Distributors?"
description: "Manufacturers and distributors have different expectations of each other. Manufacturers want distributors to reduce costs, focus exclusively on their products, invest heavily in promotion, and follow their plans. Distributors, in turn, expect manufacturers to reduce financial risks, provide more support, offer better services, and adopt lenient policies."
author: "戈军珍"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-04-13"
language: "en"
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# What Are the Differences in Interest Demands Between Manufacturers and Distributors?

> Manufacturers and distributors have different expectations of each other. Manufacturers want distributors to reduce costs, focus exclusively on their products, invest heavily in promotion, and follow their plans. Distributors, in turn, expect manufacturers to reduce financial risks, provide more support, offer better services, and adopt lenient policies.

What do manufacturers want distributors to do? What do distributors want manufacturers to do? We don't think from one perspective but rather as a big board, hitting both sides equally.

01
**What Manufacturers Want Distributors to Do**
All manufacturers have four expectations of distributors.

**1. Reduce manufacturer costs.**
Common ways to reduce manufacturer costs include: payment in advance, more inventory pressure, fewer promotions, and lower rebates. Manufacturers run various activities and require distributors to pay in advance. Manufacturers set tasks for distributors, and if distributors fail to complete them by year-end, they find ways to meet them, even by stocking up.

Especially for listed companies, they must announce their financial forecasts for the previous year by January 31 of the next year at the latest, so in December they aggressively push distributors to stock up. Listed companies do this, and now non-listed companies do it too.

**2. Expect focused investment: "Only do mine, wholeheartedly."**
"You married me, so it must be monogamous; you can't have a mistress, let alone a third mistress." However, distributors not only have "mistresses" and "third mistresses" but also "fourth" and "fifth mistresses." This is a common phenomenon in current manufacturer-distributor cooperation. Some manufacturers set up "distributor exclusive sales awards" to encourage distributors to focus on their products. If a distributor sells only one manufacturer's products and no one else's, the manufacturer gives an additional reward of 200,000 yuan.

For distributors, selling only one manufacturer's products is risky and unsettling: "Once the product sells well, what if the manufacturer kicks me out?" But manufacturers want to fully support you, so you must put all your energy into them.

**3. Vigorous promotion: team, funds, operations, all-out effort.**
Most manufacturers invite teachers to lecture distributors on future paths, and the teachers say to build a team. Because if distributors build teams, manufacturers' teams have less work; distributors need cash, otherwise they can't pay; operations determine how big a distributor can become, which is set by industry ceiling, but what determines a distributor's position in the industry is the company's operational model.

Almost all manufacturers want distributors to have sound operational systems, so distributors form their own operational capabilities, enabling them to sell the manufacturer's products well, making the manufacturer's job easier. Manufacturers want distributors to have teams, substantial funds, high operational levels, and to go all out, focusing only on this one thing and not doing anything else.

**4. Obedience and cooperation: complete tasks, channel protection, execute plans.**
Manufacturers set annual tasks for distributors, and distributors must ensure completion. Additionally, especially for wholesalers, they must protect channels, avoid cross-region selling, and not disrupt the market. Manufacturers also want distributors to execute "my plans," such as holding more meetings if the manufacturer asks, and organizing farm visits if required, because meeting marketing is a crucial tool now.

02
**What Distributors Want Manufacturers to Do**
All distributors have roughly four expectations of manufacturers.

**1. Reduce financial risk: credit sales, promotions, low prices, high rebates, returns.**
This expectation is very important for distributors. Distributors fear investment: "I can earn less, but I can't lose my money." To reduce financial risk, distributors want manufacturers to offer credit sales, but many manufacturers now don't, especially FMCG companies, where credit sales are increasingly rare. They want manufacturers to run promotions, and they want each promotion to be bigger than the last, otherwise distributors are unhappy.

When manufacturers run promotions, at least distributors can gain some "extra income" under the same operating conditions. They want low prices. They want high rebates, and if they complete tasks by year-end, they want higher rebates, and if they can't sell, they want returns. Essentially, these demands stem from distributors' considerations of reducing risk and increasing returns.

**2. More support: personnel, policies, information, funds, promotion, market.**
You must send me a sales manager and promoters to help with product promotion; you must give me better policies. This year's market is sluggish, and relying on my own ability to complete tasks is stressful. What policies will the manufacturer give me? Will they run two more promotions or push more inventory? Provide information about industry development.

It would be best if the manufacturer could help sell some goods and extend the payment cycle to ease my financial pressure. It would be best if the manufacturer could help with promotion, because I have too few people, and "the outsider chants better scriptures"—the same words from manufacturer personnel are more easily accepted by end customers than from distributors. Distributors also want manufacturers to give them a larger market and not set up dealer networks too densely, etc.

**3. Perfect service.**
Distributors want manufacturers to continuously provide high-quality products. If disputes arise between distributors and end customers, they want manufacturers to send people to resolve them. Distributors fear inventory pressure and large stock occupying too much capital, so they often keep minimal inventory. When inventory is insufficient, they want manufacturers to supply goods promptly without interruption. If products don't sell or sell poorly, they want manufacturers to accept returns or exchanges promptly without charging any fees.

**4. Lenient policies and tolerant attitudes.**
"Tolerant attitudes" means distributors hope manufacturers won't set tasks, or if they do, they still give rebates even if tasks aren't completed, and they don't care about "polygamy," not being too strict or harsh. Most distributors have such thoughts, and their specialty is "straddling multiple boats," constantly balancing among manufacturers.

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