---
title: "Why Are Some Large Distributors with Over a Decade of Experience and Ample Capital Seeing Their Business Decline Day by Day?"
description: "This article explores why some veteran distributors with years of experience and substantial funds are struggling, while newcomers with less capital thrive. The key difference lies in their business philosophy and management style, which determines their ability to adapt to market changes."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-10-12"
categories: "Dealer Operations"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/why-are-some-large-distributors-with-over-a-decade-of-experience-and-amp-6441af41.md"
original_source: "https://mp.weixin.qq.com/s/kRkl9JFcoL8NO05szxud8g"
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citation: "New Distribution. “Why Are Some Large Distributors with Over a Decade of Experience and Ample Capital Seeing Their Business Decline Day by Day?.” New Distribution, 2016-10-12. https://xinjignxiao.com/en/articles/why-are-some-large-distributors-with-over-a-decade-of-experience-and-amp-6441af41/"
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---

# Why Are Some Large Distributors with Over a Decade of Experience and Ample Capital Seeing Their Business Decline Day by Day?

> This article explores why some veteran distributors with years of experience and substantial funds are struggling, while newcomers with less capital thrive. The key difference lies in their business philosophy and management style, which determines their ability to adapt to market changes.

Long press the QR code or click "**Read Original**" to register.
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> **The question in the title, I'd like to add another point: why do some merchants who have been in the market for a short time and have relatively weak capital still manage to do well and make money?**
>
> ****
>
> **If you are such a distributor, comparing your decline with the success of these newcomers, wouldn't it make you furious?**
>
> ****
>
> **Actually, the difference between the two is simple, just two words!!! Go read the article to find out! If you want to make a change, first see which type you currently belong to in the market. The author's analysis will surely help you identify yourself!**
The only difference is mindset!
Different business philosophies and management ideas lead to different operational states, and different operational states naturally lead to different fates when facing market storms. Currently, the operational states of distributors can be roughly divided into the following categories:
******By Business Philosophy******
**The "Glory Days" Type**
I've been a distributor for over a decade. After all these years, I have people, vehicles, and money. My network is extensive (actually, I know a few big players in the surrounding counties and cities). In the early years, business was easy. When goods arrived from the factory, I'd make a few calls, and the big players in the surrounding markets would drive over to pick up goods. Because of my large capital (large order quantities) and many big clients (early entry), I was favored by manufacturers!
In recent years, manufacturers have poached my downstream market clients. They want me to serve supermarkets? No way! They don't pay cash, and they tie up too much money.
Deliver to retail stores? No way! Running around for half a day to sell one case isn't worth the effort! Business is getting harder and harder. Big manufacturers are saying goodbye to me. I can only cooperate with manufacturers that lack strength and can't cultivate the market finely, relying on regional agents to sell their goods. Anyway, I have plenty of money; who wouldn't want to work with me?
**The Passive Recipient Type**
Manufacturers now demand not just sales volume, but also distribution rate, visibility, and expanding coverage to peripheral markets! Honestly, I know that serving supermarkets and retail stores can promote market growth. But I have to calculate my own costs!
Deliver to retail stores? Serve supermarkets? Fine! But you manufacturers need to provide support! After all, the product is yours, not mine. You need to cover the supermarket fees, and if I'm to supply on credit, you need to give me credit too! I can deliver to retail stores, but if they don't order at least five cases, it's not worth it—unless you give me a delivery subsidy! I don't mind putting in the effort, but I'm in business to make money—I won't act without seeing the profit. When I calculate, I won't do unprofitable deals!
However, to establish a foothold in the market, I have to represent manufacturers' brands. To grow in this industry, I need manufacturer support. So sometimes when manufacturers push hard, I do some distribution and delivery to keep up appearances. That's enough! No need to be too sincere!
**The Proactive Aggressive Type**
Manufacturers are extending their reach further. Relying on wholesale big players like before won't work. Now you need to have a network of thousands of retail stores and fixed business relationships with local supermarkets and restaurants to have leverage in negotiations with manufacturers. I've already put a lot of effort into this, hiring dedicated staff for different channels: a retail business group, a wholesale business group, a supermarket/restaurant business group, and a group for outer counties. A wise man adapts to circumstances.
It's clear that manufacturers are increasingly focusing on terminal performance. If I make a firm decision, even if I lose money for a year or two, to get these retail networks under my control and maintain them, I'll become the market leader in the future. It's okay to suffer a bit now; what matters is having a future. To be more stable and bigger, I need to invest in building a foundation!
Moreover, supermarkets are getting more powerful. I have many brands and products. They're just sitting in my warehouse. Once my distribution business is on track, I'll also raise funds to open a supermarket. But that's not simple; I'll need to hire professional managers!
******By Management State******
**The Mom-and-Pop Shop Type**
There's no inventory management at all. The warehouse is a mess. After a few days, I check the inventory and see an empty shelf. Okay, time to restock! What to order? How much? No exact numbers! Anyway, after doing this for years, I have a rough idea. I go with the flow! I throw the goods in the warehouse and then sell.
When I clean up the warehouse, oh! Master Kong green tea has been out of stock for days! Oops! There are 30 cases of expired Coca-Cola from two years ago! I'll pay attention next time! How are sales? Just so-so! I know roughly how much I sell per day, but I don't know how much of each product or the profit margin! Anyway, my wife and I manage the money. We throw the cash in a drawer and do a monthly inventory to see if we made a profit or loss! Who has time to calculate every detail?
Accounts receivable? Some, but not much. I rarely sell on credit. I'd rather do less business than take that risk and hassle. Even so, I've lost tens of thousands!
Salespeople? I have two: my nephew and my nephew. I don't trust outsiders, but these two are unreliable. They get into fights when delivering and trade my goods for cigarettes. It's a headache!
**The Do-It-All Type**
It's exhausting! With such a big business, it's just the two of us. My wife is the warehouse manager, accountant, and cashier. I sit in the store all day, handling business contacts. What does the warehouse manager do? She receives factory shipments and watches for stockouts. Who goes to the warehouse to get goods for the store? Sometimes I do, sometimes the store clerk. Theft? They wouldn't dare! They might steal one or two items, but more than that, I'd notice! Outbound orders? No, we don't do that formal stuff.
What does the accountant do? She handles money. She keeps a daily sales log, counts the cash at night, and records major expenses when purchasing. Profit and loss statements? We don't have time for that.
What do I do? I handle business contacts. Customers from all around know me. I know exactly what prices to give each one. Others can't do it, and my nephew can't either—he gets into arguments, and they don't accept him.
Salespeople? Yes, several! Some are relatives, some are hired. I treat them well: room and board, base salary, plus a 5 yuan commission. Without money incentives, they won't move fast!
Accounts receivable? Don't mention it. A few years ago, I was too ambitious and extended hundreds of thousands in credit. Now I'm left with a pile of IOUs. Collecting debts isn't easy! Account analysis? There are so many IOUs; I can't remember who owes what. I've decided not to do that foolish thing again.
Why am I so tired and don't hire more people? Well, with such a small shop, why put on airs? Besides, can I trust others with my money and goods?
**The Enterprise-Managed Type**
I deal with manufacturers not just for business, but also to learn from them—how they develop markets, manage people, and manage money.
My shop isn't big now, but I plan to make it big one day. I've already started enterprise-style operations.
I have a warehouse manager, a finance department, and a sales manager. All systems are in place, and reporting is rigorous. It's been built up gradually. I even poached someone from a factory for this!
So what do I do now?
I'm the boss! I participate in major decisions, but they run the daily operations. Sales has a manager, warehouse has a manager, daily accounts go to the cashier, and the accountant keeps the books. If a client needs credit, finance gets my approval first, then they issue credit sales orders based on my approved limits and terms... Even if I'm away for a month or two, the shop won't fall into chaos.
What do I do when I'm out? I learn and expand into other markets! I travel around to see if there are new products or projects. What do I think is most important? Management! Whether you're a big company or a small business, management is key. It's about survival and growth. Half my mind is on finding new business opportunities, and the other half is on strengthening management!
Among the above types, it's clear who is superior and who is inferior. Ask yourself, identify which type you belong to in terms of operations and management, and compare with the leaders in your industry. It's not hard to find the answer. Different thinking leads to different paths.
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**Agenda**
08:00-09:00 Registration
09:00-09:05 Host opening
09:05-09:35 2016 China FMCG Industry Trend Analysis Report — Zhao Bo
09:35-10:05 FMCG Enterprise Transformation Strategy and Path — Liu Chunxiong
10:05-10:35 Opportunities and Challenges from FMCG Channel Reform — Liu Zhao, CEO of Waiqin365
10:35-11:05 Reconstructing Distribution Channel System, Promoting Urban Retail Upgrade — Tian Yuan, General Manager of Alibaba Retail Link Backend
11:05-11:25 Channel Efficiency in the Internet Era — Fu Xiaoyun, Vice President of Benlai Holding
11:25-12:00 Roundtable Forum — Brand Transformation: Improvement vs. Reconstruction?
Guests: Liu Zhao, Liu Chunxiong, Fang Gang, Chen Feng, Shi Zhengchuan, Deng Xia
12:00-13:30 Lunch
13:30-13:50 Distributor Transformation: Urban Distribution Trends — Wang Qi, CEO of Weijie City Distribution
13:50-14:20 Roundtable Forum — Why Distributors Should Do Logistics in Transformation
Guests: Zhao Bo, Wang Qi, Liu Zhongmin, Tang Guangliang, Wang Cheng, Sheng Yan
14:20-14:40 How FMCG Enterprises Leverage the Internet to Take Off — Wang Hui, E-commerce Operations Director of Xijiu
14:40-15:00 Detailed Explanation of Zhongshang Huimin's One Machine, Two Wings Strategy — Su Xiaoxin, Vice President of Zhongshang Huimin
15:00-15:20 Category Value and B2B E-commerce Development Strategy — Wang Chaocheng, CEO of Yijiupi
15:20-15:40 Supply Chain Finance as a Lubricant for B2B Driving Traditional Business — Chen Xian, CEO of 51 Order
15:40-16:00 Zhanghe Cloud Factory Boosts FMCG Supply Chain Upgrade — Yang Lixiang, CEO of Zhanghe Tianxia
16:00-16:30 Integrating Small and Micro Retail, Reconstructing Business Ecology — Miao Dong, Vice President of Quanshi
16:30-16:50 B2B Investment Principles and Approaches — Zhao Mingwei, Vice President of Legend Capital
17:00-17:30 Roundtable Forum — Who is the King in FMCG B2B Models?
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**Registration: Long press the QR code below or click "Read Original"**
↓↓↓ Click "Read Original" [Register]


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## Citation metadata

- Publisher: New Distribution
- Author: New Distribution
- Published: 2016-10-12
- Canonical: https://xinjignxiao.com/en/articles/why-are-some-large-distributors-with-over-a-decade-of-experience-and-amp-6441af41/
- Original source: https://mp.weixin.qq.com/s/kRkl9JFcoL8NO05szxud8g

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