Xiao Li is a salesperson for B, a well-known low-end baijiu company operating nationally from Northeast China. He is responsible for sales in A County, Hebei Province. A County has a population of 300,000, 8 townships, 165 natural villages, 112 supermarket terminals in the urban area, 145 catering terminals, 775 supermarket terminals in township markets, and 156 catering terminals. The market capacity for low-end baijiu is around 25 million yuan (these figures were compiled after a new salesperson conducted meticulous market operations). The county's distributor, Manager Wang, previously operated a local baijiu brand and a Shandong beer brand, with annual sales of nearly 6 million yuan. Manager Wang had 2 salespeople, 2 drivers, and 2 delivery vehicles: a Foton agricultural vehicle and a van. However, after nearly a year of cooperation between B and Manager Wang, the market showed no improvement. The distributor had paid for and received 800,000 yuan worth of goods the previous year, but by after the Spring Festival, there was still nearly 250,000 yuan in inventory. At monthly meetings, Xiao Li would complain: "You don't know? My distributor doesn't cooperate with our work. The distributor and his salespeople prefer to sell that local baijiu brand and are unwilling to sell our products..." The regional manager responsible for the county market, Xiao Zhao, also said that Manager Wang didn't cooperate with the company's work and should be replaced.

Regarding Xiao Li and Xiao Zhao's claims that Manager Wang's lack of cooperation led to the market's failure, we tentatively asked them several questions:

  1. What are their job responsibilities?
  2. How many supermarket terminals and catering terminals are there in this market?
  3. What is the current terminal distribution rate of their products? For example, how many terminals sell all product items? How many sell 3 items? How many sell 2 items? How many sell 1 item? How many terminals do not sell their products, and why not?
  4. How is the sell-through of their products in this market? For example, how many terminals sell more than 20 cases per month? How many sell 10-20 cases? How many sell 5-9 cases? How many sell fewer than 5 cases?
  5. How is the visual merchandising of their products in terminals? How many terminals have 4 or more product display facings? How many have 3? How many have 2? How many have 1? How many terminals have 2 POP posters posted together?
  6. Compared with competitors at the same price point, what are the strengths, weaknesses, opportunities, and threats of their products in this market? ...

The results of our inquiry were disappointing. Salesperson Xiao Li and regional manager Xiao Zhao basically couldn't answer the above questions. Based on this, we initially suspected that their inaction caused the distributor to see no hope in cooperating with the company, making him unwilling to cooperate. With these doubts, we conducted an in-depth market survey of A County and communicated the findings with Manager Wang.

The survey results were as expected: Salesperson Xiao Li basically didn't go to the market every day to help Manager Wang with market development and maintenance. Instead, he would report to Manager Wang's store in the morning and then disappear. Terminal owners basically never saw the manufacturer's salesperson Xiao Li. Regional manager Xiao Zhao visited the distributor monthly, but when he went there, he just chatted nonsense over drinks and disappeared after eating and drinking. Because Xiao Li and Xiao Zhao had a good personal relationship, Xiao Zhao shielded Xiao Li, causing Manager Wang to lose confidence in cooperating with them and gradually lose confidence in the B brand.

During the market survey and communication with Manager Wang, he candidly shared his thoughts: Unlike other distributors who have many brands, he had been operating a local baijiu brand and a Shandong beer brand for over 6 years. He had cooperated with the local baijiu brand for 6 years, growing from zero to nearly 5 million yuan in annual sales. This local baijiu brand mainly sold boxed liquor and didn't conflict with the B brand. As for the beer brand, it wasn't his main business; he only maintained the terminal network symbolically during the baijiu off-season and incidentally reduced costs. His main reasons for cooperating with B were: first, B is a national brand, and he knew its products performed well in the Shijiazhuang market; second, B's products were mainly low-end bottle liquor, which didn't conflict with his current baijiu brand; third, with intensifying market competition, he recognized his own development shortcomings and wanted to learn market operation and management experience through cooperation with B. However, after a period of cooperation, salesperson Xiao Li didn't help him develop and maintain the market, nor did he train his salespeople. Regional manager Xiao Zhao "protected his own," not stopping Xiao Li's inaction, making the B brand seem hopeless. As a distributor, Manager Wang admitted he aimed for profit. Vehicles and salespeople weren't a problem; as long as he could see hope, he would even take out loans.

Based on the market survey and communication with the distributor, and the inaction of regional manager Xiao Zhao and salesperson Xiao Li, we reported to B's marketing director. The marketing director decisively decided to dismiss Xiao Li and Xiao Zhao, replaced them with a new salesperson, Xiao Zhang, and personally visited Manager Wang to apologize, expressing deep regret for the losses caused by his poor management and lack of timely communication. After Xiao Zhang arrived in A market, he would go to the distributor's place at 7 a.m. every day, help load the vehicles, then take the vehicles to each township for market development and maintenance. In the evening, he would ride a bicycle to develop and maintain the urban market. On rainy or cloudy days, he would proactively train the distributor and his salespeople, teaching them skills for developing and maintaining second-tier distributors and terminals. Xiao Zhang's hard work finally moved Manager Wang and his employees. After 3 months of market development and maintenance, the A market underwent earth-shaking changes. Not only was the remaining 250,000 yuan of inventory from before the New Year sold off, but the distributor also sold nearly 800,000 yuan worth of newly purchased goods. As sales increased, even during the baijiu off-season that year, Manager Wang recruited 3 salespeople and 2 drivers within half a month, bought 2 box trucks and an electric tricycle, and operated the B brand with dedicated personnel and vehicles according to the "Four Fixed Principles" (fixed personnel, fixed vehicles, fixed routes, fixed terminals). The two box trucks covered township markets, and the electric tricycle covered the urban market. That year, A County's actual sales reached 8 million yuan, and after deducting vehicle purchases and employee expenses, the net profit for the year was nearly 400,000 yuan.

The above is just an ordinary case from our work, but it reflects a big problem: many companies' market failures are not entirely the distributor's fault.

What is the purpose of cooperation between a company and a distributor? It is to incorporate the distributor's network into the company's network, using the distributor's vehicles, personnel, and capital to rapidly increase product sales in the market. Therefore, cooperation with distributors is a way for companies to quickly build networks, recover capital, launch markets, and increase sales. For most companies, distributors are also the fastest way to increase sales in regional markets.

So what is the purpose of cooperation for distributors? Distributors are individuals or units that only have sales or service rights in a certain region or field. They have independent business organizations, own the goods (buying the manufacturer's products/services), obtain operating profits, operate multiple product lines, and their business activities are not or rarely restricted by the company. In short, distributors are merchants who buy goods from the company. They don't buy for their own use but to resell. They just handle and resell, focusing on price differences. Therefore, what distributors care most about in cooperation is profit—whether they can make money by selling the company's products.

Companies often say distributors are "scattering flowers," "changeable," "self-willed," "profit-driven," "attacking everywhere," etc. Yes, most distributors do have various problems due to their educational level, management capabilities, and environment, which I won't elaborate on here. But as companies, what should we do for our partners—distributors?

With the development and intensifying competition in the baijiu industry, many companies have adopted the "deep distribution model" to achieve comprehensive competitive advantages in the market. From the deep distribution model, the prerequisite for success is the company's own strong marketing resources and capabilities. Channel members, especially grassroots salespeople, directly determine the distributor's willingness to cooperate and the sales volume in the regional market through their quality, management, and execution. They are the company's most grassroots positions, with hard work, relatively low wages, large numbers, and scattered locations, making management uniquely difficult. Unlike workshop or office management, where all subordinates work under your nose and you can see what someone is doing at a glance, these salespeople do "random molecular motion" in different markets every day, developing and maintaining terminals in streets and alleys, working in rain, snow, or scorching heat. Therefore, their "quality, management, execution, etc." directly and decisively affect the distributor's willingness to cooperate and sales growth. As the saying goes, "To forge iron, you need a strong hammer." As salespeople serving distributors, do we have the professional skills to provide the service distributors deserve? Can we make distributors feel that cooperating with such a company and having such salespeople will definitely make money?

Moreover, if the market isn't doing well, aren't regional managers and marketing directors also responsible? How often do leaders at all levels, from regional managers to marketing directors, actually visit their markets? How much do they know? At every meeting, they say their subordinates lack execution and talk too much, always saying, "Leader, you don't know..." The reason is that they haven't visited the market themselves and truly don't understand it. Because you really don't know, your subordinates often say, "Leader, you don't know..." If you knew your market like the back of your hand, your subordinates wouldn't dare say that, and such problems wouldn't occur in your market.

In summary, cooperation between manufacturers and distributors is never "absolute," only "relative." As long as everyone in the company's marketing system does their part, provides distributors with good products and good service, and makes distributors feel that with such good products and such a good sales team, they will definitely make money, then the phenomena of distributors being "scattering flowers," "changeable," "self-willed," etc., will surely decrease. Our sales performance will definitely be achieved, and we won't say "It's all the distributor's fault" anymore.

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