Why do distributors who start agency businesses at the same time end up with such different standings after N years? Some are renowned locally, while others remain obscure. Some distributors are visited daily by famous manufacturers seeking cooperation, while others beg manufacturers for cooperation but are given no opportunity. Some can have equal dialogue with manufacturers, while others are strangled by manufacturers in their operations. Some can rally secondary wholesalers and retailers with a single call, while others get little response. Some earn respect and recognition from government departments, peers, and employees, while others are scorned, forgotten, and ridiculed. Engaging in the same profession and operating the same business, the huge gap is all due to the different standings of distributors. So what determines a distributor's standing in the industry?
A distributor's standing is determined by influence, which is determined by comprehensive strength. Comprehensive strength is determined by sales volume and profit. And the products represented, market control capabilities, team combat effectiveness, and operational strategies determine a distributor's sustainable sales and profit.
To build a distributor's standing, at least the following four aspects are required:
- Represent first-tier brand products.
- Persist in making distinctive second-tier brands the local sales leader.
- Transform public channel resources into monopolistic resources.
- Focus.
(1) Who you are doesn't matter, how strong you are doesn't matter; what matters is what brands you represent.
Representing first-tier brand products has several major benefits:
- Manufacturers have standardized management, and you improve yourself through strict management.
- Due to brand pull, early promotion and distribution are less difficult.
- Due to brand recognition, terminal pull is strong, making sales easier.
- Due to brand recognition, you can drive sales of other products and increase channel customer stickiness.
- Due to brand recognition, you can leverage the product brand to establish your own status and brand.
Therefore, distributors must remember: 1. Choice is more important than effort. Strive to obtain opportunities to represent first-tier brands, rather than casually choosing a second- or third-tier brand and then working hard. 2. Even if distributors are the same, the products they represent differ, and ultimately the products determine the difference! Your status is reflected by the products you represent; products determine value!
(2) Persist in making distinctive second-tier brands the local sales leader.
The benefits are as follows: 1. Product profit margins are larger, which is where your income as a distributor diverges from others; 2. Stronger control, gaining loyal consumers. For first-tier brand products, they are sold in supermarkets, baby stores, pharmacies, and online, so consumers cannot be loyal to a single point of purchase. In contrast, second-tier brands allow you to control store distribution, and consumers' loyalty to visiting stores is higher!
Many distributors lack not products, but distinctive products. Consumers' first choice is either the first or the only one; being unique is a characteristic. Characteristics are the reasons consumers buy. Use marketing power to make second-tier brands the local sales leader, and use sales to create the brand.
When selecting such products, distributors should note the following: 1. Among products with similar characteristics, prioritize products from larger enterprises. 2. Product characteristics should be simple and clear, preferably only one; the more characteristics, the fewer memory points. 3. Product characteristics should easily associate with the product itself. For example, "Use your brain often, drink Six Walnuts regularly." The selling point doesn't tell us it boosts brain health, but almost all consumers believe Six Walnuts not only quenches thirst but also seems to boost brain health. This is how product strength leads to market leadership, sales leadership, and influence leadership.
(3) Transform public channel resources into monopolistic resources.
Why do CNPC, Sinopec, and CNOOC have such high profits? Because they monopolize sales channels! The instant noodle industry is sluggish overall, but why does Master Kong maintain profits above 10%? Because it monopolizes channels! No matter what products a distributor represents, as long as you monopolize channels, your sales and profit will inevitably be maximized. Often, a distributor's channel control capability determines their operational strength. How can distributors turn public channel resources into monopolistic resources?
A pilot was conducted in a market in Henan with good results; let me share the experience.
Awareness: Channels are built for yourself, not for manufacturers. Channel expansion is laborious, time-consuming, and costly; many distributors hope manufacturers will do it while they enjoy the benefits. Some even say, "If I build the channel and the manufacturer revokes my agency, wouldn't I have worked for nothing?" In fact, building channels is like building roads; if the road is good, if Mercedes doesn't run, BMW can.
Products: A reasonable product portfolio is an effective way to control channels. Volume products increase channel customer stickiness because they have the highest sales and terminals can't do without them, enabling exclusive sales; profit products generate profit.
Profit: Stable channel prices and profits are the guarantee of channel stability. The most effective way to control secondary wholesalers and terminals is sustained, reasonably high profit.
Relationships: The frequency of interaction determines the distance of the relationship. Emotions determine loyalty. Periodically visit core sales points.
Downstream into alliances: Transform secondary wholesalers into distributors. Build a community of shared interests. Core secondary wholesalers and sales points have good relationships with you and are part of your community; they profit and feel emotionally connected when selling your products, and you can sign exclusive sales agreements. Doesn't that turn public resources into monopolistic resources?
(4) Focus. This is the fundamental strategy for distributors to grow stronger.
From a product perspective: An outstanding distributor will definitely focus on one field, one category, one brand, or even one single product. This is the power of focus. A distributor representing one good product can "make a name for themselves." Many distributors often make two common mistakes:
- Weak strength but representing many categories with no correlation, resulting in low profits or even losses.
- Weak strength but representing too many products. I once saw a county-level distributor representing 42 brands with annual sales of less than 30 million yuan. This is like a farmer planting 10 trees but having only one bucket of water; in a severe drought, using one bucket to water ten trees wastes the water and saves none. If you use one bucket for one tree, that tree will grow into a towering tree, and you can enjoy its fruit. Many distributors representing a well-known brand achieve annual turnover exceeding 100 million yuan. This is the power of focus.
From a market perspective, a larger market area does not necessarily mean higher sales; often, the larger the area, the higher the control costs, the lower the sales, and the weaker the market influence. Therefore, distributors should focus on markets. If you can't be a regional agent, be a county agent; if you can't be first in a county, first be first in a township. Establish a model market, replicate it, and ultimately establish your own standing in the industry, achieving "my territory, my rules!"
The contest between distributors is about first-tier brands and distinctive products among second-tier brands. How impressive you are is determined by the products you represent. Because of first-tier brands, because of distinctive second-tier products, because of persistence, and because of focus, distributors can create profitable sales, thereby gaining influence and standing in the industry.
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