---
title: "What Is the Core Function of a Distributor?"
description: "In recent years, I've been asked similar questions: Will distributors disappear? Where is their way out? My conclusion is simple: distributors as a group will not disappear, but redundant ones will be optimized. The future form of distributors will change. In other words, as a group, distributors will not vanish, but as individuals, if they don't transform or fail to transform successfully, they will likely disappear."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-04-03"
language: "en"
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---

# What Is the Core Function of a Distributor?

> In recent years, I've been asked similar questions: Will distributors disappear? Where is their way out? My conclusion is simple: distributors as a group will not disappear, but redundant ones will be optimized. The future form of distributors will change. In other words, as a group, distributors will not vanish, but as individuals, if they don't transform or fail to transform successfully, they will likely disappear.

In recent years, I've been asked similar questions: Will distributors disappear? Where is their way out?
Some B2B platforms and experts have voiced that distributors are targets of revolution and will be replaced.
My conclusion is simple: distributors will not disappear, but redundant distributors will be optimized. The future form of distributors will change.
In other words, as a group, distributors will not vanish, but as individuals, if they don't transform or fail to transform successfully, they will likely disappear.
I find it strange. Twenty years ago, we called for distributors to transform from "sitting merchants" to "traveling merchants," but at that time, it met with great resistance. Later, a batch of new distributors known as "traveling merchants" rose, and the "sitting merchants" were eliminated.
Traveling merchants mean going out, not only people but also goods. "Vehicle sales" became the standard for traveling sales.
Later, we proposed "visit sales," separating people from vehicles, which also met with great resistance. Fortunately, many large distributors have now made the transition.
Now, we propose third-party "unified warehousing and distribution" in the B2B environment, which is an improvement based on "visit sales." In plain terms, it strips the [warehousing and distribution] function from distributors, and it still meets resistance.
Over the years, distributors have been constantly negating themselves. Each negation meets resistance. So, the elimination of the traditional and the rise of new forces are perfectly normal.
**01**
**The Core Functions of Distributors**
What are core functions? Without them, distributors as a group would not exist.
As long as core functions are irreplaceable, distributors as a group will not disappear. Individual elimination and renewal are normal.
Due to the highly backward and fragmented nature of Chinese channels, Chinese distributors bear too many non-core functions, leading many to believe these are natural functions of distributors, but they are not.
As a division of labor, manufacturers (brand owners) bear the function of value creation, while merchants (various merchants, including agents, distributors, and retailers) bear the role of value delivery.
Of course, there is creativity in the value delivery process, otherwise there would be no progress. Merchants may also participate in brand owners' value creation, but these are not core functions.
Distributors undertake about four functions: capital, promotion, ordering, and warehousing/distribution.
Capital, warehousing/distribution, and ordering are not core work in value delivery. Especially warehousing/distribution, which is goods transfer, not value delivery.
Among the above functions, which is the core? I believe it is promotion. Promotion is the true value delivery, and the others are derived functions.
02
**Distributors and B2B**
B2B has emerged as a new species, and some have sentenced distributors to "death," seemingly everything distributors can do, B2B can do, with fewer links and higher efficiency.
Of course, some B2B platforms currently have low integration and low efficiency, but we cannot deny the efficiency logic of B2B.
In the past, we emphasized distribution and traveling sales, indeed because China lacked efficient third parties, and distributors were [forced] to do things outside their core functions. For example, in the United States, distribution is entirely completed by third parties.
B2B has emerged, carrying part of the channel integration function. This is progress in China's circulation, even though this progress is combined with the internet.
As a channel integration function, B2B's advantage lies in the integration link. Whatever has integration advantages will be handed over to it in the future, such as order integration and unified warehousing and distribution. As for big data and internet finance, they are derived functions, not core functions.
The United States has long had channel integration services, such as third-party distribution, but distributors still thrive, indicating that not all channel functions have integration advantages.
03
**Promotion Is the Core Function of Distributors**
Promotion is largely an interpersonal activity. For interpersonal activities, small organizations have advantages.
Unlike multinational companies' classic product strategies, Chinese companies' product launch speed is much faster than that of multinationals.
Product promotion, besides backend support (advertising, communication, branding, etc.), relies heavily on the trinity of the channel.
Teacher Shi Wei proposed the trinity in the internet age—cognition, transaction, and relationship—which is the trinity brought by online communication.
The reason Chinese marketing could creatively propose "using channels to counter brands," brand-driven and channel-driven, is precisely because Chinese channels are also a trinity—relationship, cognition, and transaction.
Both are trinities, but the logic differs. The internet trinity presupposes that communication generates cognition, while the offline trinity presupposes that relationships generate cognition.
Communication generating cognition is the advantage of the internet. Relationships generating cognition is the advantage of offline.
Even in the internet age, the traditional trinity will not disappear and will exist for a long time.
The proportion of virtual will rise, but it can never replace reality.
For promotion based on interpersonal relationships, small organizations have advantages, overlapping social and business radii have advantages, traditional social relationships have advantages, and clearer interest centers have advantages.
I have repeatedly emphasized that B2B certainly has advantages, but we must not think it is omnipotent, otherwise there will only be enemies, no friends.
Acknowledge your disadvantages, then cooperate with those who have advantages, and you will have friends.
04
**Focusing on Core Functions**
The world trend is mighty; those who follow it prosper, those who oppose it perish.
B2B as a channel integrator, and distributors stripping non-core functions, is progress in Chinese channels.
Even without the internet, China would have reached this point, just not so quickly.
Do not think the current form of distributors is the norm; it is precisely the abnormal.
Future distributors will strip warehousing and distribution, focus on core functions, and their advantages will be better utilized.
In the current distributor organizational structure, warehousing and distribution personnel account for too large a proportion, daily work is routine, and core functions are often forgotten.
Future distributors will travel light, possibly without warehouses or vehicles, with significantly fewer drivers, warehouse keepers, and even internal staff, reducing management complexity.
Isn't this a good thing?
Focusing on core functions, besides offline relationships, can completely [transform from army to air force], doing both offline trinity and online trinity well.
Once the two trinities are done well, there will be independent traffic. In the internet age, independent traffic is precious.
With independent traffic, they have status with brand owners and also with B2B platforms.
Their status is incomparable to that of a mere distributor in the past.
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