---
title: "When the Struggling Distributor Meets the Helpless Manufacturer: How to Play the Drama of a Harmonious Partnership?"
description: "In the manufacturer-distributor relationship, the manufacturer often assumes a more important role, yet many companies believe they understand their distributors and set rules arbitrarily, leading to issues like bullying, betrayal, or arrogance. This article explores the real needs and fears of distributors, and provides strategies for building a strong, mutually beneficial partnership."
author: "张枫"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-05-27"
language: "en"
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# When the Struggling Distributor Meets the Helpless Manufacturer: How to Play the Drama of a Harmonious Partnership?

> In the manufacturer-distributor relationship, the manufacturer often assumes a more important role, yet many companies believe they understand their distributors and set rules arbitrarily, leading to issues like bullying, betrayal, or arrogance. This article explores the real needs and fears of distributors, and provides strategies for building a strong, mutually beneficial partnership.

In the manufacturer-distributor relationship, the manufacturer seems to play a more important role. Often, many companies think they understand their distributors and set the rules of the game according to their own will—either bullying the weak, burning bridges, being half-hearted, or being self-righteous! Let's calm down and think: Are distributors really unreasonable and shameless? Are they all a bunch of disloyal, money-grubbing rascals? Could it be that the manufacturer has its own shortcomings?

【First Trap】Understand What Distributors Make Money From?
As a distributor, the main profit structure is nothing more than the following four types: 1. Front-end gross profit from products; 2. Back-end gross profit from products (including various rewards and rebates from the manufacturer); 3. Earning from manufacturer expenses (channel product introduction fees, personnel costs, activity price differences, gifts, promotional expenses); 4. Other service fees (distribution fees, warehousing fees, market maintenance fees, etc.).

From the profit composition of distributors, it is not difficult to see that besides the front-end and back-end gross profits they deserve, other seemingly non-profit items have also become part of their profit sources. Where do these profits come from? I think most of them are cut from the manufacturer. As a manufacturer, you should understand that you can try to use systems and processes to reduce the risk of being cut, but in actual cooperation, these profit points have become reasonable and legitimate. Trying to completely eliminate them is neither advisable nor realistic.

【Second Trap】Making Money Is Not the Only Need!
"Making money is the absolute principle"—this is absolutely correct, whether for the manufacturer or the distributor. As intermediaries in business cooperation, distributors are even more profit-oriented. But besides making money, do distributors have other needs? I think there are many "soft principles" that we have not paid attention to or have paid less attention to. If we handle these soft principles well, it can have a multiplier effect.

1. Can your brand help distributors enhance their channel bargaining power?
When distributors' own products and channels are not yet strong, the most powerful weapon to improve their channel control and competitiveness is to have a few well-known brands in hand. At this time, if the manufacturer can seize this opportunity and give distributors enough face in terms of agency rights and market support, the dealers will naturally be grateful, and their loyalty can be imagined.

2. Can your management improve distributors' management level?
In the process of distributors transforming from sitting merchants to traveling merchants, and from traveling merchants to service providers, the most needed improvement is their own management level, and the best learning reference is naturally their partners. At this time, the manufacturer should provide distributors with management concepts and models, subtly transferring its own things to the dealers, which will naturally enhance the closeness of cooperation.

3. Refuse to be a pimp; can you make distributors part of the enterprise?
In recent years, the most crisis-conscious are not manufacturers but distributors. Squeezed by upstream, downstream, and end customers, and due to the non-exclusivity of agency rights, distributors' profit margins are getting smaller, and they feel their agency status is not guaranteed. Distributors always feel precarious and full of crises, and they are looking for ways to protect themselves.

At this time, what distributors desire most is to truly participate in the manufacturer's regional or even national sales, and to truly sit on the same boat with the manufacturer.

4. When crisis comes, is the manufacturer a reliable backing?
Cruel competition is full of traps; one wrong move and you lose everything. Distributors are always accompanied by fatal crises in their operations, such as capital chain, channel control, peer competition, personnel turnover, etc. When crisis comes, the one who can most readily lend a hand to distributors is the manufacturer. Therefore, distributors need the manufacturer as a backing at all times.

【Third Trap】The Real Needs of Distributors
When cooperating with distributors, the manufacturer must not only know what its partners need, but also know what they fear, because only by knowing what the other party fears can we better avoid such unfavorable factors in cooperation and deepen the closeness of cooperation. At the same time, we can make full use of these fears to better control customers.

In my opinion, apart from the hard requirement of product quality, what distributors fear is nothing more than the following: 1. Not making money; 2. The manufacturer not providing continuous market support; 3. Untimely expense verification; 4. The manufacturer being disloyal; 5. Poor channel protection, etc.

【Fourth Trap】Four Pain Points in Managing Distributors
1. Can letting distributors take advantage really capture their hearts?
Many managers or salespeople in enterprises like to entice customers with benefits, thinking that giving benefits can bring them closer to customers. But can letting customers take advantage really capture their hearts? I think not necessarily.

First, once you give benefits, you have to give them everywhere and all the time; if you miss once, it may cause some dissatisfaction in the distributor's heart.

Second, what you can give, your competitors can also give, and they may give far more than you. Can you fight with competitors on this issue?

Third, if distributors take too many advantages, their minds will not be on business, and the result may be that you give many benefits but sales do not grow. Therefore, it is not that distributors should not take advantage, but that you should choose the right time, the right project, and the right way, so that one benefit can make distributors remember you for a lifetime. That is skill!

2. Is it enough to win over the boss?
Many bosses or salespeople in enterprises often boast in cooperation with dealers: "No problem, I've won over the boss!" Is it really all good and worry-free once the boss is won over? Don't forget, it's the boss who talks business, but it's the subordinates who do the work. The boss can only set the general direction; he can't personally handle every detail. The specific operation is definitely done by the team below. As the saying goes, "It's easy to deal with the king of hell, but hard to deal with the little ghosts." If you only have eyes for the boss, the people below can easily slack off or be careless, which will greatly reduce your execution, and many market investments will be wasted.

3. For the sake of their own goals, not considering the distributor's survival
Many enterprises and salespeople, in order to achieve their own strategic direction and performance improvement, often ignore the current market situation and the feelings of dealers, forcing some strategies and sales targets on distributors without considering their survival. This often greatly dampens distributors' sales enthusiasm and loyalty, and can easily force distributors to turn against the manufacturer and terminate cooperation.

4. Drawing cakes for dealers may result in drawing a prison for yourself
In order to achieve cooperation or performance, many enterprises and salespeople will easily promise customers, but most promises cannot be fulfilled, or cannot be fulfilled on time and in quantity. This will inevitably lead to distributors' distrust and resentment. Continuously drawing cakes for distributors may result in burying hidden dangers for yourself and drawing a prison for yourself.

How to Build an "Unbreakable" Manufacturer-Distributor Relationship?
Know yourself and know the enemy; find the core issues in manufacturer-distributor cooperation, formulate targeted strategies, and find the corresponding key points, so that the manufacturer-distributor relationship can be unbreakable.

1. The essence of the manufacturer-distributor relationship is still interests
The ultimate goal of the commercial society is profit maximization. No matter what, making money is the absolute principle. This is the core of manufacturer-distributor cooperation. Without profit as a premise, everything else is empty. How to make each other earn money and achieve sustained profit growth in cooperation is the most core issue.

If you don't make money and only talk about feelings, no one will play with you. Enterprises and salespeople must be clear about this.

2. The sense of identity with concepts affects the closeness of manufacturer-distributor cooperation
No manufacturer-distributor cooperation is established without understanding each other's products, channels, promotion, business models, and management concepts. Any manufacturer-distributor cooperation is inseparable from the recognition of each other's business philosophy and corporate values. There can be small differences, but there must be major commonalities. Therefore, the closeness and duration of manufacturer-distributor cooperation depend on the recognition of concepts.

3. Make your thoughts the customer's belief
Selling products is not as good as selling brands; selling brands is not as good as selling thoughts (management, models). Thoughts influence behavior.

The functions of your products are also available in competing products; there won't be much difference. Brands can be built by anyone, and they are not irreplaceable. Therefore, the most successful thing for an enterprise is to transfer its own thoughts to customers. After brainwashing, let customers worship you, turn the management thoughts exported by the enterprise into their own beliefs, and make distributors become your salespeople. What else is there to worry about? At this time, the enterprise should not only "give fish" but also "teach fishing," acting as a preacher and problem-solver, so that customers' loyalty is heartfelt and not changed by temporary profit-seeking. Only then can the premise of establishing an unbreakable manufacturer-distributor relationship be achieved.

4. When the enterprise changes, do a good job of ideological work for distributors
Enterprises need to develop, so new policies and market strategy adjustments will naturally occur. But many enterprises, when making adjustments, often do not pay attention to prior communication and interaction with internal employees and distributors. They always appear before distributors with an attitude of "I am the greatest" and their words are golden rules. This is also what distributors cannot tolerate most. It's not that changes cannot be made or adjustments cannot be made; at least distributors should be given a reason and an adaptation process. Otherwise, if the enterprise unilaterally suddenly makes distributors disrupt their original market layout and rhythm, making a big turn and big change, it would be strange if distributors don't resist!

Therefore, the enterprise must have a publicity mechanism to effectively communicate its strategies and policies with internal employees and external customers in a timely manner. After giving customers a process to digest and accept, then make adjustments, so as not to cause major fluctuations, smoothly implement the enterprise's ideas and strategies, and ensure the normal operation of the enterprise. This is a good strategy.

5. Be a good "nanny" and "bodyguard" for distributors
To control customers well and enhance loyalty, the enterprise must not only provide good products and generous profits, abandon the high-and-mighty attitude, but sometimes also lead by example, be a competent "nanny" and "bodyguard," provide customers with better pre-sale, in-sale, and after-sale intimate services, solve problems that customers are inconvenient or unable to solve, dare to stand up for customers when they have problems or troubles, and dare to take bullets for customers when necessary. Only then can you win customers' respect and boost their confidence.

In this way, it will be hard for customers to betray you!

6. The ultimate goal of letting distributors "take advantage" is to win hearts
As mentioned above, it is impossible not to let customers take advantage, but "taking advantage and still acting innocent" is a management failure. What the enterprise should do is to treat "taking advantage" as an effective means of customer management and loyalty enhancement. Its ultimate goal is not short-term effects, or even counterproductive results, but to become a sharp weapon for the enterprise to win hearts. At critical moments, customers should stand up and draw blood. I remember that when evaluating Wu Changjiang, a Henan dealer of NVC Lighting once said the following: "Wu Changjiang is very charismatic and does things in a grand manner. We can buy goods on credit (implementing a credit system), giving flexibility and reliability, and the sales channel has been very stable for many years."

Wu Changjiang's charm and grandeur were nothing more than letting customers take advantage, but what he wanted was for dealers to regard him as a big brother in the underworld, to admire him like a leader. In this way, the effect of the manufacturer-distributor relationship that the enterprise wants to achieve is completely different!

7. A solid manufacturer-distributor relationship requires both "profit" and "righteousness"
Only "profit" without "righteousness" is a "prostitute" behavior; only "righteousness" without "profit" is a fairy tale! "Where there are people, there is a world" is a movie line. In China's business world, even with laws and regulations as a premise, it is an indisputable fact that contract spirit involves both feelings and money. To establish a solid manufacturer-distributor relationship, both parties must achieve both "profit" and "righteousness"! Otherwise, such cooperation cannot last long.

What kind of relationship is between manufacturers and distributors? Different people have different opinions. But I think it all boils down to one core, and that must be a result: win-win! The enterprise should treat distributors like children, and distributors should treat the enterprise like a spouse. With this foundation, there can be loyalty.

Zhang Feng | Chief Consultant of Musen Management Institution

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