The criteria for selecting distributors include mainly the distributor's operation scale, financial position, reputation, sales volume and growth, warehousing capability, transportation capability and customer mix. In particular, customer mix refers to whether the distributor has an extensive and in-depth customer network comprising a number of second-tier wholesalers and retailers which can cover a regional-level city.

The distributor's credit position should be the first and foremost criterion in the selection process. In assessing the distributor's strengths in this aspect, its financial position and in particular its ability in settling payment for goods is of utmost importance.

The distributor's reputation is a good indicator of its reliability and thus another important selection criterion. The reputation of the distributor can be gauged by means of its company image and customers' feedback.

It is also crucial to examine whether the distributor shares the same development goals, industry prospects and market views with the manufacturer. A good assessment method is to observe the distributor's corporate culture and values. The sharing of common goals and values is pertinent to the smooth cooperation and effective integration between the two parties and should be given due consideration before agreeing on a partnership.

The management capability of the distributor is a key factor in determining whether it can effectively implement agreed business decisions and plans, which will in turn affect sales performance. The continuity of the management staff is also important. If management personnel are changed frequently, the cooperation relationship may be disrupted and the business performance may be affected.

With regard to the distributor's sales capability and performance, two assessment standards may be used. One is the number of sales personnel employed by the distributor and their calibre, and the other is whether the distributor's market coverage meets the manufacturer's requirements.