Three Common Misconceptions for Distributors in Doing Business

Three Common Misconceptions for Distributors in Doing Business

For tyre distributors, the tyre market is now completely different. Previously, business was done on the basis of personal relationships, but now it's all about profits. The market is changing, and various factors such as the global economic downturn and the pandemic have affected the business of tyre distributors. This has forced them to change some of their old ways of thinking, and in the new era, if they don't progress, they will be eliminated.

In recent years, both manufacturers and channels in the tyre industry have experienced ruthless reshuffling. Tyre distributors face more and more new things, and higher demands are placed on their business. In this market where everything is focused on money, every step of tyre distributors is crucial.

Tyre distributors who follow the manufacturers can only be stepping stones

When the tyre industry was developing rapidly, following the pace of the manufacturers was a way to make big money. But now, this method doesn't work anymore. Tyre manufacturers and sellers are separate interest entities - one the buyer, the other the seller - but some tyre distributors don't understand this relationship. They rely too much on manufacturers for tyre sales, asking manufacturers about promotions, looking for manufacturers when products can't be sold, and seeking help from manufacturers for post-sales issues. In the early stages of cooperation, manufacturers may help you solve some problems. But if the distributor doesn't grow and cannot share more sales tasks for the manufacturer, the distributor's position will soon be replaced.

Tyre distributors who engage in price wars will lose out

Price wars are a topic that cannot be avoided in the entyre tyre industry. When the tyre market reaches a certain saturation point, sellers selling identical goods at the same price will lower their profits to gain a larger market share and "non-expandable" resources. Initially, low prices are undoubtedly the best way to seize market share. But what about later? More and more tyre distributors are competing in price by using various resources to increase sales. Ultimately, you win more sales tasks and less pathetic product profits. All tyre distributors are caught up in the tyre price war and can't keep up with the times.

Tyre distributors who blindly extend credit will end up with a pile of IOUs

Extending credit is a pain that all distributors cannot refuse. Dealers are well aware of the pros and cons of extending credit, but they cannot refuse. On the one hand, tyre distributors use credit to clear inventory and increase sales volume. Customers are all acquaintances, so it's difficult to refuse the credit. In addition, there are not many choices for distributors in the fiercely competitive market. If you run into reasonable, capable, and willing customers to clear their debts, you can collect the funds quickly. If you encounter those who like to delay payment, the money they owe is as good as lost. In the fierce market competition, losing this money is a disaster for distributors.

For tyre people, selling tyres is the top priority. In the past few years, tyre companies raised prices at the beginning of the year, again in the middle of the year, and once more at the end of the year. This made tyre distributors overwhelmed and disrupted the tyre distributors' tyre purchasing plan. Therefore, tyre distributors are more rational now. They assess their capabilities and only purchase what they can manage, not more. Tyre companies can no longer fool distributors by raising prices because those who did not change have already been eliminated by the market.

After many rounds of reshuffling, tyre distributors are no longer lambs to be slaughtered in the eyes of tyre manufacturers. As a transit station and storage pool in tyre channels, the role of tyre distributors cannot be ignored. Although various new tyre models are emerging, and various direct sales models are attempting to topple tyre distributors, the fact is that tyre distributors have not fallen behind. Reasonable management will make tyre distributors shine in the new era of the tyre industry.

AULICE TYRE is a renowned Chinese tire company providing a wide range of reliable tires to customers worldwide. We specialize in producing superior quality tires for passenger cars, light trucks, SUVs, and commercial vehicles. All of our tires are made with advanced production technology, high-grade materials and strict quality control. Our products are designed to provide customers with reliable performance, superior comfort, and excellent safety. We are committed to delivering the highest quality tires at competitive prices to ensure the best customer experience. Please feel free to contact us for more information.

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Three Common Misconceptions for Distributors in Doing Business East New District, Yangxin Industrial Zone, Huangshi, Hubei, China
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