The dealer group will never disappear, but transformation is the trend. Choosing what kind of development direction is crucial for dealers. Here is a panoramic outlook for dealer transformation, where dealers can choose their own development direction based on their actual situation and opinions. Of course, this is just a direction and idea, and a careful and meticulous plan needs to be carefully formulated for actual operation.

1. Chain - From Behind the Scenes to the Front Desk

Active offense is the best defense, and establishing one's own chain system is a "forward integration" strategy. There are two ways to establish: one is to independently deploy points using one's own financial and personnel advantages; The second is to utilize brand and image resources to develop franchisees. Distributors who choose this development direction not only need to have certain funds and brand strength, but also need to have a high level of management. Torch Petrochemical in Xi'an has made beneficial explorations, and its subsidiary "Copper Car Horse" has established multiple chain stores in Xi'an. Although it disappeared in 2008, the reason for its failure was not due to problems with the chain model, but rather due to the company's investment mistakes. Currently, there are also actively exploring Jiashiduo agents in Nanjing, Jiashiduo agents in Yunnan, and 515 agents in Jiangsu.

2. OEM - Create your own brand

     Private brands can entrust production enterprises or set up their own factories for production; In terms of brand usage, a single proprietary brand can be implemented, or it can be used simultaneously with the manufacturer's brand.

This is a 'backward integration' strategy. One of the advantages is that it can reduce procurement costs and increase price competitiveness. Generally speaking, the gross profit margin of self branding can reach between 30% and 50%. Around 2004, many large distributors began the path of self branding, such as the Gulf Lubricant Agent in Shanxi, which started a chain model of "Asia Pacific Car Service" to promote lubricant sales; Yunnan Jiashiduo's distributors are promoting the sales of Rheinland lubricants... There are many examples of this.

     The second advantage is that it can gradually transform the role of distributors and develop towards a comprehensive enterprise. This is a strategic consideration based on long-term development, which means that the development of one's own enterprise is no longer constrained by manufacturers, especially when it comes to paying close attention to tasks and meeting standards every year.

     Distributors who choose to focus on strategy generally have certain development experience and accumulated strength, but they are not large enough to achieve overall scale. Therefore, winning in local markets or products is a way of thinking. lubrication

Choosing OEM distributors generally requires a certain level of business foundation, including the distributor's overall consideration and grasp of the brand and enterprise development, as well as certain financial and brand management and operation capabilities. Especially the management mode of traders and the operation mode of manufacturers are very different. Based on our years of observation, the success rate of OEM is still relatively low. Take the relatively successful "Asia Pacific Car Service" as an example. The products it operates now are diverse, and it has started to learn from companies such as Snape, Baiyuan, and Tefulai. However, "drawing a tiger is not enough, it's tiring".

3. Focus on becoming a leader in segmented markets

     Among Porter's three major competitive strategies, the accumulation strategy holds an important position, also known as the specialization management strategy. For distributors, it means specializing in a particular product or market. Its advantages are: avoiding fund dispersion and improving input-output ratio; Establish a professional image and generate cluster effects. A dealer in Zhuhai used to work in the automotive parts industry, and the variety was not much different from its peers around. They also occasionally worked in the oil industry, and the competition was very fierce. Later, the boss discovered that a certain oil product in the air conditioning industry was only available in the market from Shell and had high profits. He began to act as an agent for Shell's products of this type, first producing Gree air conditioning. After three years of development, its market share in this product reached about 70%. This year, he invested more than 50 million yuan to establish a modern factory covering an area of 40 acres, which is adjacent to Zhuhai Shell BP。

4. Fill the gaps - delve into the rural market

    The rural market is one of the target markets for deep marketing. The strategy of filling gaps is the direction that dealers in a market position need to choose. In the future market competition, heavyweight competitors may still be competing for urban terminals. If small and medium-sized distributors can avoid the smoke of urban competition and focus on developing rural markets, they will have unexpected gains.

    At present, there are relatively few county-level markets specializing in oil product distribution. Even if there are, most of them are agents of bulk oil or well-known brands such as Great Wall, Kunlun, Shell, etc. They have not specialized in oil products for rural markets. What kind of products do rural markets need? One is ordinary agricultural machinery oil, two is motorcycle oil, and three is higher grade agricultural engine oil. Don't think that agricultural oil can't make money. Isn't Wal Mart, the world's largest supermarket, also started in the countryside? Many places have their own unique markets, for example, Luoyang has many small mines, and the transportation of ore and coal is mostly carried out by surrounding farmers; There are over 2000 small agricultural harvesters in Hai'an, Jiangsu, and even Rishi has set up a separate agent in the county; There are also markets like Longyan in Fujian, Datong in Shanxi, and so on. What we lack is not the market, but 'discovery'.

5. Franchise - Backed by a big tree to enjoy the cool breeze

    Franchise is a franchise authorized by a chain enterprise. Franchising originated in the United States and gradually spread to Europe and Japan. At present, there are over 3000 franchised enterprises and more than 250000 franchise outlets in the United States, with an annual turnover of nearly 800 billion US dollars, accounting for more than 40% of the total retail sales of goods in the United States. For distributors who may not have sufficient strength but already have a certain sales network, choosing to join may be the best option.

    The advantages of joining are that, firstly, it can share franchise system resources and reduce business risks; Secondly, leveraging the advantages of the internet can improve profitability. The biggest difficulty for distributors choosing to join a chain enterprise is finding a good husband; Otherwise, marrying a chicken and following the chicken, marrying a dog and following the dog, encountering a seemingly legitimate but actually weak network, will ruin oneself.

    At present, major brands are gradually developing their own chain systems, such as unified "independent travel", Longpan's "image store", Kunlun's "hospitality", Great Wall's "Yijie"... However, these chain models do not yet have a clear profit model, especially for newly joined distributors, which is a challenge. The reason is that there is not such a large customer base, and it is not easy to maintain the company solely relying on profits from lubricants. If the company strengthens its maintenance business, it will become a transformation and enter another challenging and competitive field.

6. Agent - Growing on the Shoulders of Giants

    Finding a brand with growth potential as an agent is a good way for distributors to grow healthily. By representing well-known brands, stable income can be obtained. Representing well-known brand products actually requires a high level of financial strength from distributors. In addition to network advantages, they also need to have a certain level of management and commercial reputation. What's even more deadly is the 'low profit, high turnover' policy, with frighteningly low profits. The misconception among many dealers is that 'well-known brands in the market already have agents'. While you may see them succeed today, do you pay attention to their step-by-step approach to marketing a few years ago. Why didn't you act as an agent for Uni President 15 years ago? How did you miss out on Jia Shiduo 10 years ago? Why didn't you have feelings for Long Pan five years ago? Will you miss this opportunity again today?

    Any boss who wants to succeed needs to "follow the trend". Only by choosing such a brand can you truly grow. It can also be said that 'choice is more important than effort'.

7. Alliance - Creating Business Together with Manufacturers

    Contrary to the above situation, for some dealers with low visibility, choosing manufacturers with potential but low product awareness for deep cooperation can be given priority consideration.

    Products from non well-known manufacturers generally have price competitiveness; For distributors, intervening in the market cultivation of new products in advance can generate substantial profits. Keeping pace with the development of the brand is another way for distributors to grow. No brand is born, they all grow up gradually. There are still many opportunities like Jinan Quanlida actively expanding its market, Shanghai Donghao is also expanding, Zhuhai Meihe has started a comprehensive promotion, and Zhejiang Danfu has launched a large-scale attack on CCTV.

8. Switching careers - seeking opportunities in emerging industries

    According to the general law of economic development, the adjustment period of an industry is about 10 years. After earning their first bucket of gold, many of the distributors who started businesses in China in the 1980s have now switched careers. In the next 10 years, more dealers will inevitably venture into new fields after completing their original accumulation, but they will generally still utilize their previous sales networks and other related resources.

     From now on, what is the suitable product for us? The future automotive industry will inevitably be "environmentally friendly", which includes energy conservation, efficiency, and longevity. Such products include maintenance products, additives, cleaning agents, and so on. Although the market looks chaotic now, do you still have a chance in a standardized market?

9. Reorganization - Rising from the Horizon Again

     As a result of market competition and horizontal integration strategies, mergers and reorganizations among distributors are inevitable. There are two outcomes of the merger: one is partial integration, where both parties retain their original excellent brands and assets; The second is comprehensive integration and transformation. Generally speaking, a strong alliance is a government or external coercive action, while a strong weak merger is a market action, which may be more dynamic.

    The situation where this strategy is adopted is generally when two or more companies believe that restructuring is beneficial for gaining a more advantageous competitive position and development potential in the market.

    At present, such cases are relatively rare, but they have been relatively successful after integration. For example, two major auto parts companies in Quanzhou, Fujian have achieved annual sales of over 300 million yuan after restructuring, and their distribution network covers the whole province.

10. Exit - Waiting in Solitude

    This may be a temporary measure taken by dealers out of helplessness or by taking a step back. When their market space becomes smaller and it is difficult to develop or even survive, a short-term exit is a wise move. They may turn to new industries or capital markets. One thing is for sure, savvy dealers understand the principle of "making money come back" no matter what.

    Since the beginning of last year's financial crisis, many weak dealers have started to close down. During our recent market visits, many dealers have been sighing that their sales are not half of last year's, but they have forgotten that this is a bigger opportunity. Li Ka shing rose against the tide during the Hong Kong crisis, and Samsung in South Korea also rose during the crisis. The current crisis requires us to use our brains. You think more and do more, and you will naturally succeed.

    As the old saying goes, there is no brand too strong to challenge, nor too weak to compete. As long as you put in your heart and persevere, victory belongs to you.