In today's increasingly competitive market, 'channel is king, winning the terminal' has become a mantra for many enterprises. 'To win the market, one must first win the terminal; to win the terminal, one must have channels (distributors).' Channels (distributors) have become a key factor and basic prerequisite for enterprise market success. However, selecting distributors is a headache for many new brands, either because they cannot find suitable distributors and fail, or because improper selection allows distributors to strangle the new brand, hindering its smooth development. When a new brand's market share is still low and its visibility is still limited, finding the ideal distributor becomes the key to success or failure, so the selection of distributors should be cautious. So, what kind of distributors do we need? What kind of distributors are high-quality?
Credibility
Credibility first; without trust, there is no foundation. The primary goal (and basic requirement) of enterprises and distributors is to obtain benefits and seek opportunities for survival and development. Therefore, enterprises and distributors are always in a game of mutual interests. At the same time, China's market economy is not developed, and the Chinese market is not a mature market. Lack of integrity has become the biggest obstacle to the healthy and rapid development of China's market economy. Like distributors, enterprises exist in society, seeking both profits and risk prevention. Therefore, when selecting distributors, enterprises must put the distributor's credibility first. Otherwise, even if the distributor is excellent, the enterprise will not get any benefits. This is an abnormal market order and is most opposed by enterprises. Therefore, high-quality distributors must have integrity; that is what enterprises need.
A white liquor brand enterprise was clearing its market. A distributor who had cooperated with the enterprise for many years, upon learning of the impending clearance, attempted to use a bad check to defraud the payment. Fortunately, the brand's business manager discovered it early, avoiding losses. Financial issues are always the most concerning for enterprises. Imagine a distributor without credibility using deceptive means to get a large amount of goods, then deliberately delaying payment, or even defaulting or fleeing. Wouldn't the consequences be worse than selling fewer goods? Therefore, credibility is highly valued.
Stability
Stable distributors are 'extra cautious' in the early investment in new brands, not blindly optimistic about market expectations, and do not set 'exciting' sales targets. Aggressive distributors usually have high expectations for new brands, sparing no expense, and their goals are often aggressive, aiming for millions in returns within half a year. As a new brand, of course, you want distributors to be 'energetic' and help build the brand in one go. But one must consider the future; if you only think about the enthusiasm of others' investment, how will you solve the distributor's complaints when expected results are not achieved?
There is a distributor in northern Jiangsu who deals in washing and chemical products. He is known for being straightforward. When he took on a new brand of washing products, he was moved by the prospects outlined by the manufacturer and decided to fully support the brand's sales in northern Jiangsu. He paid for promotional materials, ran local TV ads (the manufacturer only provided the ad tape), and placed half-page newspaper ads in a well-known local evening paper. He also recruited a sales team to attack the second and third-tier markets... sparing no effort. The washing brand enterprise highly praised this distributor as a model among national distributors, and both sides were very pleased. A year later, the distributor had spent hundreds of thousands on the brand, but monthly returns were still around 30,000. The distributor became impatient and directly went to the enterprise to demand reimbursement for his market promotion expenses. The enterprise thought it was ridiculous for the distributor to ask for reimbursement since the money was not required by the enterprise. The distributor argued that the enterprise had deliberately exaggerated the prospects and misled him, causing him to spend so much money, and since the money was all used for the brand's promotion, the brand should pay. The dispute was unresolved, and the stalemate paralyzed the brand's sales in the region. Therefore, building a brand cannot be achieved overnight; you can't become fat in one bite. It requires patient, steady distributors to support long-term, and moderate goals and reasonable expectations are key for stable distributors to continue making efforts for new brands. Aggressive distributors, despite their 'investment,' will inevitably turn against the new brand if short-term results are not seen, leading to total paralysis in the region they represent.
Promotion
In the era of 'channel is king, winning the terminal,' distributors decide everything. The key factor in whether an enterprise's products can open the market is whether the distributor promotes them. Even if an enterprise is fortunate to have a well-known distributor, if the distributor does not promote the enterprise's products, it is useless. Especially for products with low visibility, if the distributor does not reserve the best shelf space and salespeople do not enthusiastically recommend to customers, 'sparrows at the door' (i.e., no customers) is normal. Conversely, if the distributor is very interested in the enterprise's products, not only do they give the best shelf space, but they also ask salespeople to recommend product features to customers, or occasionally carry out promotional activities. Promoting products naturally leads to 'a bustling door.'
A daily chemical company in southern Jiangsu had two regional distributors in Wuhu and Huangshan. The distributor for Wuhu had high visibility, many product categories, and broad agency channels. Because the single product profit for this daily chemical product was not high, and to prevent other distributors from forming regional competition, they took the agency but stored a truckload of goods in the warehouse without using them, with half-year sales of less than 20,000. The Huangshan distributor believed the company had strength and development prospects, and could bring good profit returns in the future, so they invested a lot of work in the market, achieving sales of over 1.3 million in the same time. This shows that whether the distributor promotes is also essential.
Strength
Strength is paramount; the trend is to favor the strong over the weak. In manufacturer-dealer transactions, strength determines the right to speak. Enterprises need distributors with certain strength; without strength, there is no say, and it is impossible to gain the favor of enterprises. Every enterprise likes to find strong distributors and avoids weak ones. This is a typical era of survival of the fittest, so the strong become stronger, and the weak become weaker. Distributors must have considerable strength; only when distributors are strong can they drive sales and achieve greater sales volume. Strong distributors usually have many products and some big brands, so they may find it hard to focus on new brands, and they have high requirements for new brands in all aspects. Ordinary products may not interest them. On the other hand, strong distributors generally have strong distribution capabilities, close relationships with various outlets, and rich channel and social resources. If such distributors are found, they can quickly complete product distribution and help new brands minimize entry costs.
A facial cleanser enterprise had difficulty in attracting investment. Strong distributors were not willing to negotiate. To quickly distribute goods, the enterprise turned to distributors who were willing but not strong. Since this distributor was previously a second-tier distributor, they were not familiar with large outlets and had to negotiate with each one individually. The distribution process can be imagined. Half a year passed, and many terminal points in the distributor's area were still not negotiated, wasting half a year of market time.
From this, we can see that new brands must rely on strong distributors to successfully enter the market. With the help of distributors' channel networks and various social resources, they can quickly and at minimal cost (large distributors already have accounts in various outlets, so only new product entry fees and barcode fees are needed, not separate manufacturer entry fees) push products to the terminal market. Moreover, large distributors can help manufacturers obtain better display and promotional resources at more favorable prices. These are advantages that weaker distributors cannot match. The key issue is not whether new brands find strong or weak distributors, but how new brands can meet the requirements of strong distributors and successfully persuade these large distributors.
Experience
As everyone knows, it's better to do what you know well. New brands generally face the question: should they find experienced or inexperienced distributors? Experienced distributors are very familiar with the industry, and it is difficult for enterprises to 'move' them with carefully prepared plans. Many people think that as long as they are willing to cooperate and invest money in the enterprise's brand, they are good distributors, and it doesn't matter if they lack industry experience. But inexperienced distributors simply don't know how to do things, such as stocking, guiding sales, and promotions. They may not consider many details, causing unexpected troubles.
Therefore, it is advisable for new brands to honestly find an experienced distributor, which is more reliable. Especially for distributors in the industry, the product flow channels have already paid entry fees to various outlets. For example, if a distributor represents two brands, it is equivalent to half the entry fee for each brand individually, meaning the more brands, the lower the average entry fee. If this distributor operates the market, the new brand only needs to share the entry fee. If an inexperienced distributor is used, they must pay the full entry fee for the new brand to each outlet. This cost could have been reduced with an experienced distributor. With an inexperienced distributor, the entry fee becomes a 'bad debt' that neither the enterprise nor the distributor wants to bear, making it difficult for both to make money.
Desire for Long-term Cooperation
New brands hope to have distributors who share their ups and downs. Sincere cooperation, seeking long-term win-win, enterprises and distributors must have a desire for long-term cooperation. Because enterprises not only need to survive but also to develop, they prefer long-term cooperation with distributors for mutual benefit. In a healthy cultural atmosphere, long-term cooperation will generate more tacit understanding between each other. For the market, 'doing' is always more important than 'saying.' Therefore, it is not only necessary to sign long-term cooperation agreements with distributors, but more importantly, to require distributors to resolutely implement those cooperation documents and not be duplicitous. If distributors can provide important support to the enterprise in advertising or booth positions, it is clearly a very positive performance. When enterprises see such 'consistency in words and deeds' from distributors, they will naturally be pleased and can then invest more funds, manpower, and materials to support the development of distributors, ultimately achieving win-win between manufacturers and distributors.
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