Three Puzzles Of Dealers

There are thousands of large and small distributors in China, and the dealers with unlimited scenery have been faced with new puzzles of management and more sustainable development because of the strong hegemony of strong terminals and strong brands.

This is mainly reflected in the following aspects:

I. low profit and confusion of sustainable growth

Now, the bigger problem for distributors is profit space and sustainable growth.

If profits are too low, even if the enterprise can survive and there is not much development prospect, sustainable growth will become a problem.

The profits of dealers in almost all industries are very low.

Where did the dealer's gross profit go?

Why profit is so low?

1. is squeezed by both ends of upstream brands and downstream terminals.

Compared with strong brands and super terminals, distributors are a disadvantaged group. They are squeezed by more and more powerful manufacturers and new super terminals, and have become "sandwich biscuits".

2. upstream manufacturers to dealers marginalization, auxiliary (goods distribution) positioning.

Upstream manufacturers feel that the profit margin is too small to give dealers so much profit. I have to directly connect with retailers.

Dealers have made a "marginalized and auxiliary" positioning, so the dealer's rights are cut off, that is, delivery and return.

The dealer's profit is very small.

3. the distributor has weak connotation, poor service ability and low added value.

Many dealers have a very thin business scope and poor service capabilities. In the eyes of manufacturers, the added value of channels is very low.

The profit is low due to low added value.

So, what is the added value of the channel?

How to define the high, middle and low added value of the channel?

Added value = = the gain from others / the cost of others.

High added value = = capital + logistics + multiple functions

Added value = = capital + logistics + limited service

Low added value = = capital + Logistics

Two. How to increase the added value of the channel?

To increase the added value of channels, dealers must increase their service functions. I suggest that we should start from two aspects.

1. Provide solutions for upstream logistics or marketing and management.

Dealers integrate their internal resources and turn them into professional service platforms.

We can provide professional information base (competing products and consumers) to the upstream, providing strong logistics solutions, providing retail site management and marketing services.

2, provide product line planning for downstream and help to achieve sales targets.

Many retailers can't buy anything. After a meal, second will get kickbacks and nothing else.

So we can provide product line planning, distribution support, market promotion, gross profit increase and so on to downstream retailers.

Make your product the best seller in the list.

3, improve professional level, hire professional marketing or management personnel, increase the right to speak on the upstream and downstream.

Three, how to achieve sustainable growth?

1, look for potential brands.

Potential brands have three characteristics, namely, the leader in market segmentation, the less imitators of products, and the direct contact with users.

For dealers, to maintain Maori space, it is best to choose a leader in the market segment. This market may not be particularly large, but the profit is high.

The best product can not be imitated by others, there is a certain barrier. When doing the market, the upstream products have brought protection.

In addition, we should make products that can directly contact with users.

There are some products that need door-to-door service from dealers, which needs to be communicated with users, which is rather tiring in itself.

For example, a water heater, a steam water heater or a water heater, it must be installed at home.

Through such products, dealers can get users' resources and increase the right to speak with manufacturers.

2, operate its own brand and create virtualization.

Some dealers have already begun to do so.

What do you do upstream?

The best products are small products and marginal products, which are invisible to big manufacturers.

If he sees it, he will not have your chance.

In addition, some products with low brand certification, such as aprons, mops, or small hooks hung on the walls of housewives, do not need brands.

Manufacturing is best virtualized, that is, commissioned processing.

3, integrate into downstream (share or open shop) to pform retail enterprises.

Many distributors of fast moving consumer goods have already set up supermarkets, stores, hotels, and gradually pformed into retail businesses.

Begin to change the concept of management, and position their role from the interests of the upstream manufacturers to the benefit representatives of downstream channels.