****Wen Yu Rice Noodles National Recruitment, see end of article for details I: Two Types of Distributors That Can Never Grow From the perspective of a distributor's personal capability, two types of distributors can never grow. One type is those who personally handle the market, doing everything themselves, from delivery to collection. Such distributors will never grow. Because one person can effectively manage no more than 120 customers directly, and with helpers, a distributor typically manages no more than 300 customers, and can command no more than 4 delivery vehicles. The other type that cannot grow is the absentee owner who delegates everything. Having made some money in previous years, they entrust the business to family, relatives, or professional managers. As long as it makes money, they don't care about market conditions. But when they realize it's no longer profitable, the market is beyond saving! The distributors who truly grow are entrepreneurial ones. Entrepreneurial distributors typically grow in this way: First, when starting out, they must personally do the work—doing it personally helps them truly understand the market and control the channels more accurately. Second, as the scale expands, they must cultivate several capable subordinates. These can be family members, relatives, or hired salespeople—through their own example and teaching, they build the first team—only by expanding the team can they grow themselves. Third, when the scale reaches a certain point, they establish organizational structures, implementing division of labor, profit sharing, responsibility, and risk sharing. If everything is entrusted to capable subordinates, they might leave and take customers, causing great loss. The benefits of specialization are: first, everyone does what they are best at; second, everyone handles only part of the work, so any individual's departure won't cause major losses. Fourth, set up management and supervisory structures. When the scale is too large, one person cannot manage everything, so hierarchical management is necessary. After hierarchical management, there may be concerns, so supervisory bodies are established to check the work of managers and relevant departments. Fifth, formulate systems and manage according to them. When the scale is small, everything is in one's head, and arrangements can be made in half an hour. At that point, having no systems might be more efficient. After expansion, management must follow systems, and the boss must also comply. Distributors must learn to grow; suggested learning targets: First, distributors should learn management from excellent companies. The stricter the management, the more they should learn from them, even asking manufacturers to design management systems for them (the salespeople at Henan Wenyu Foods are a good example). Second, learn management models from excellent distributors. Ask manufacturers which distributors are doing well, then visit them to learn. If distributors progress slowly, they should hire a manager skilled in management to handle it for them. What should scaled distributors do? After expansion, the boss no longer personally handles the market. So what should the boss do daily? I believe the boss should focus on three major tasks: First, research the market First, study manufacturers to understand their next moves. What are their annual plans, what products are they developing, how will they adjust the market, and how will they compete? Second, study other distributors and terminal operations. Finally, study consumers and their consumption patterns. Second, cultivate and select talent. The more talent, the bigger the business can grow. Distributors find it hard to recruit high-level talent, so they must cherish talent. Third, formulate rules and regulations. Without rules, nothing can be accomplished. Once systems are in place, follow them, making management much easier. No matter what, the distribution mechanism must be well-designed. Chairman Mao's famous phrase "Beat the landlords, divide the land" mobilized the proletariat's fighting spirit! If distributors can divide money well (current and future money), they are 80% successful! II: Learn to Secure 'Big Guns' from Manufacturers to Support Yourself In normal operations, distributors face three major areas: upstream to manufacturers, middle management (people, vehicles, warehouses, funds), and downstream channels (KA, circulation, special channels, group buying, OTC). Doing well in middle management and downstream channel operations is key to self-development, but the core is negotiating and managing upstream manufacturers. Doing this well can secure more resources and strong support. Only with support can you use the "cannon to kill mosquitoes" approach, making results obvious. Excellent distributors are experts at negotiating for upstream resources. Let's discuss five methods to secure "big guns": 1. Analyze the manufacturer's situation Every manufacturer has core and non-core markets. For example, Henan Wenyu Foods divides markets into three types: core, key, and developing, with different support standards for each. So, understanding the manufacturer's needs is crucial. Large companies pursue market coverage, KA displays, and sales targets, while small and medium enterprises mainly pursue sales targets. Once you understand the manufacturer's intentions, you can focus your efforts. 2. "Draw a pie" for the manufacturer, show potential, and win support Many distributors do the opposite: after taking on a product, they constantly ask the manufacturer for confidence, and when facing obstacles, they blame the manufacturer—product, price, service, packaging, etc. They rarely look at themselves. They need manufacturer personnel for distribution, for slow sell-through, and for near-expiry products they demand subsidies. Think about it: many issues but low sales, the manufacturer's salespeople can't handle it, so they either get replaced, change markets, or change distributors. Support will shift to other markets. What to do? When choosing a product to distribute, you must clearly understand the product's business direction, and constantly share market ideas with the manufacturer, focusing on key products. Let the manufacturer's salespeople and executives see hope, and they will invest, because manufacturer personnel have performance reviews; they want sales returns on the funds they release. In Henan, a Mr. Ma who distributes Wenyu Rice Noodles created a group with the manufacturer's salespeople and his own, reporting daily sales and distribution status. Over time, the manufacturer gave his market core support because he painted a picture of a potential market, making the manufacturer feel that investment would yield returns. This is a smart approach. 3. Learn to take small losses to gain big benefits When a few boxes of near-expiry or expired products are returned, handle them appropriately. Smart distributors will let the manufacturer see how they handle it, and say that if the manufacturer can compensate, fine; if not, it's okay, their determination to do the market remains unchanged. Ordinary distributors will use this as a reason to demand compensation, even threatening not to pay unless compensated. Do you know what the manufacturer's people think? For smart distributors, they might provide some support because business is tough; for ordinary distributors, they think, "This is troublesome; maybe we should find new customers and replace them!" 4. Early "blood transfusion" operation, later build self-sustaining "hematopoietic stem cells" When pricing new products, plan how to operate without support. Promotions are a double-edged sword: if done well, you kill a thousand enemies but lose five hundred; if done poorly, you kill five hundred but lose a thousand. It's recommended to use funds on product and consumer activities, such as buy-one-get-one, free samples, tastings, empty box recycling for cash, etc., and not or minimally on channels. Only when products connect with consumers can we "use consumers to command channels." This way, even with reduced or no support, you can continue. 5. Choose first-class manufacturers, be a first-class distributor, not a third-class one. Third-class distributor: manufacturer invests 10 yuan, only 5 yuan actually reaches the market, keeping 5 yuan for themselves; Second-class distributor: manufacturer invests 10 yuan, all 10 yuan reaches the market, keeping none; First-class distributor: manufacturer invests 10 yuan, 15 yuan actually reaches the market, adding 5 yuan of their own; Third-class manufacturer: promises 10 yuan investment, but only 5 yuan actually reaches the market; Second-class manufacturer: promises 10 yuan investment, all 10 yuan reaches the market; First-class manufacturer: promises 10 yuan investment, actually invests 15 yuan. Every manufacturer invests in the market and hopes not to supervise distributors; every distributor wants to do well and worries about manufacturers not fulfilling promises! Manufacturers and distributors should not fight; work together with one heart, on one ship, win the market together. The key is integrity! In summary, distributors should communicate more with manufacturers, let them see your market potential and attitude. Normally, manufacturers will tilt support. To get more resources, put yourself in their shoes; if you can identify their needs, you won't worry about not getting resources. In 2016, distributors should transform from light bulbs that need current from manufacturers to engines that generate their own power, illuminating themselves and even the manufacturer—that's the smart approach! 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