How long are the classic producers left before they are completely extinct? Author: PriceCop Monday November 19th, 2018 • Category: Blog • Updated: Friday April 4th, 2025 In an environment where market competition is fierce and new players emerge daily, it’s challenging even for seasoned manufacturers to stay afloat. The main mistake is choosing the wrong distributor. Broadly speaking, you can divide all manufacturers into several categories based on their stage of development: “pure,” territory-controlling, and dominant. Content List “Pure” Manufacturer Territory Control Dominance The Nuances of Choosing a Distributor Prospects for Manufacturers “Pure” Manufacturer This type is practically extinct because their entire operation comes down to one thing: “It’s my job to produce, and that’s it.” In other words, the sole purpose of these “classic manufacturers” is to transfer products to the distributor as quickly as possible, with no concern for how they’re sold. They don’t even think about controlling the recommended retail price (RRP) or monitoring a competitor’s updated product lines. If such a manufacturer ever wants to move to the next level, regaining control over sales will be extremely difficult. In this arrangement, the distributor essentially functions as a retail outlet. We’re often talking about manufacturers who haven’t adapted to new market conditions but still manage to hang on. They lack any major advantages, and their only viable strategy is finding distributors willing to handle their products. Territory Control This type of manufacturer seems to be thinking ahead. Beyond their own profit, they’re already considering how to manage their sales territory—and to do so effectively, they need a reliable distributor. There’s only one way to choose such a distributor: analyze territory coverage—how successfully a competitor’s related products are selling. If their business is going well, find out who their distributor is and make them an offer. To analyze how a competitor’s related products cover the internet, our PriceCop monitoring system can help. Dominance These manufacturers are interested in working with distributors capable of merchandising and ensuring a product lineup on store shelves. So, when looking for a suitable distributor, manufacturers focus mainly on how effectively the distributor can manage shelf space. That’s all well and good, but finding such a distributor is very difficult. The market is mostly saturated with those dealing with the first two types of manufacturers—“pure” and territory-controlling. The Nuances of Choosing a Distributor Naturally, everyone wants a distributor who has worked with many giant brands. It seems solid and logical, but what actually happens? A manufacturer typically has a few options: Distributor = financial logistics provider. Great, but there are caveats. It’s expensive to maintain such a team. Moreover, if you leave the distributor without giant brands, you might find they aren’t capable of much. In this case, it’s better to look at how their general-price-list team operates. Focal team. This is complex because such teams are often already formed, and no one wants to create a new one. General price list with all its associated quirks. You can basically categorize distributors into three groups: The “kings.” They were among the first to start distributing. Often, they worked with the brands that rose after the Soviet Union collapsed. Most have since become financial logistics providers. The “money-oriented.” Their main interest and goal is making money. They’ll sell anything as long as it pays off financially. Their biggest downside is a lack of expertise—they take on anything. The “developing.” They’re committed to quality work. The only thing they need is funding to grow. They can’t promise rapid growth but do guarantee long-term results. These are the ones you should consider for partnership. If a manufacturer works with chain retail, there’s only one option—work directly. If it’s a typical product offered by a thousand other manufacturers, you might want to reconsider your business. Prospects for Manufacturers Chain retail reveals each company’s prospects: whether they can conquer the market or should shut down before bigger problems arise. Over the last two years, 70% of shelf space has been allocated to 2–3 giant brands, which dominate nearly the entire market. Competition is extremely tough. Anyone who doesn’t quickly establish a strong brand will likely vanish. Maintaining growth requires constant, accurate monitoring—something you can do with PriceCop’s tools, such as price and availability monitoring, promotions tracking, and dumping reports. To learn more, fill out the form below: