Why should traditional distributors transform? Because of e-commerce? Because the wolf is coming? Wrong! Wrong! Wrong! Because the times have changed, users have changed, business models have changed, and manufacturing models have changed! 1Change in business models—from division of labor to distribution Have you ever thought about why you could make money before? Because of channels? Because you encountered good products? Because of high management level? ... In the author's view, these are only the necessary conditions for traditional distributors to make money, but in essence, it is the value brought by the business model. Starting from Adam Smith's 'On the Division of Labor', to achieve efficiency, all industries had clear divisions: factories only produced, agents and distributors handled regional logistics and distribution, and terminal stores were responsible for sales, to maximize the efficiency of production, supply, and sales. This model emerged under conditions of underdeveloped transportation and information. In the internet era, not only has the speed of information flow accelerated, but it has also improved the logistics level of the entire society. The boundaries between traditional production and sales have become increasingly blurred, price information is more transparent, and purchase channels are more convenient. Factories can both produce products and deliver them to consumers, and they can also obtain the most direct needs of users. The traditional distributor's opportunity to make money through price and logistics information asymmetry is gone forever. Reducing intermediate transaction links and lowering intermediate circulation costs is the essence of commercial development! 2Change in manufacturing models—from manufacturing to customization In the traditional manufacturing model, factories generally assess sales personnel based on sales volume, profit, and process management indicators. Sales personnel only do what is assessed. To get high salaries and avoid being scolded, they transfer this pressure to distributors through coercion and inducement. Coercion—if you don't pay, the contract relationship or promotional expenses may be terminated, and rebates may be suspended; Inducement—only by closely cooperating with the factory can you reach the 'climax'. In the future, they may give you special treatment, more promotional support, and solve more expenses, but the monthly tasks are like sesame blossoms—rising higher and higher. Distributors' warehouses are full of inventory, market coverage is already high, and customers are 'constipated'. To achieve the annual marketing goals, factories appear somewhat short-sighted, continuing to force-feed inventory, eventually causing distributors to die from overstock and indigestion. If this is the traditional manufacturing model, what about the transformation from manufacturing to customization? Online and offline products are different, ostensibly to protect distributor interests through differentiation, but in reality, these products are high-value-added products customized based on user price and functional needs, sold directly to users. The most profitable products are not given to distributors; distributors only play the role of offline brand promotion and brand maintenance for the factory. Especially under the background of channel dominance, terminal supremacy, and deep distribution marketing concepts, factories vigorously promote channel flattening. To control terminals more directly and effectively, some factories resort to unscrupulous means, 'beating the local tyrants, dividing the land, and confiscating family assets' against distributors, shrinking their sphere of influence, persuading and incorporating the second-tier distributors that distributors have painstakingly cultivated. As long as the masses report any somewhat famous local gentry or tycoons, they are registered and besieged. After large-scale netting, only small fry remain. Many distributors have been functionalized and marginalized during the integration process, reduced to delivery providers or pure service providers without control, and eventually die from the factory cutting their tendons and breaking their bones. The ultimate goal of the factory is to cut out the middlemen and face consumers directly! 3Change in consumption patterns—from product economy to exchange economy The internet not only brings changes in business models and manufacturing models but, more importantly, changes in consumption patterns! The traditional economy is a product economy: enterprises have many suppliers, and after turning suppliers' parts and raw materials into products, they distribute to various levels—first-level distributors, second-level distributors, then to stores, and finally to customers. In this process, all customers do not know all market information; their information is asymmetric, so if you say it's good, I accept it. Therefore, whoever is the bidding king can take advantage. In the internet era, under the consumer demand of 'I want it anytime, you must be there anytime, and come immediately!', as long as you cannot meet my needs, I can switch at any time—within a second! So, in the internet era, what you operate is not products but users! After uncovering these fundamental issues, many distributors will ask: How should we transform? Hold on, the author thinks that how to transform and in what direction may be more important than effort. Choose the right direction, cultivate your internal skills, and success will naturally follow! Where should traditional distributors transform to? The author thinks this question is more about the results of why to transform mentioned above. What will be the real competitive advantages in the future? 1Control terminals, hold your destiny in your own hands Terminals are the battleground for every business. Controlling terminals is equivalent to grasping half of your life. Some distributors may say they already control many terminals. The author asks: Do you know the sales situation of those terminals? Can you really 'control' them? Whether it's JD, Alibaba, or other small platforms, they are all leveraging existing channel forces to build their platform blueprints, and their method is still the so-called B2B supply model. The author asks: What is the essential difference between this and traditional telephone ordering and placing orders? What is true terminal control? Unified products, unified image, unified price, unified service, unified purchasing, etc. Only by truly connecting scattered terminals can a powerful force be formed! Terminals that are connected but not locked are like loose sand that collapses at the first blow! 2Operate users, launch a people's war The essence of business is the exchange of value, and the object of exchange is people. With users, you have the capital to survive! Those who win people's hearts win the world. So whether it's B2B, B2C, or other models, in the future, it is the users themselves that bring value. With users, success will naturally follow. 3Improve services, and wealth will naturally roll in Future transactions are not about product sales themselves, but about user experience first. Experience is not only the best way to retain users but also the source of added value! No matter how good a product is, it has a clear price, but only high-quality service can win hearts. Service is not just diversified value-added services like laundry, express delivery, flower ordering, fruit ordering, but also an intangible service standard! With clear direction and goals, how exactly should we transform? First, choose a platform. There are two ways to enter a platform: having 'wisdom roots' or 'following'. Having wisdom roots means relying on your own existing resources to create your own platform. Recommendation level: not recommended, unless you have huge resources and strong integration capabilities, and you need to be extremely fast, because the future is not a confrontation between individual companies, but between platforms. The second is to follow. The first thing about following is to follow the right trend, as the world's internet language master Kevin Kelly said: 'In the future, the world's largest e-commerce company will also have the largest physical stores. The future retail industry will be an online-offline integrated format. ' So I won't specify which platform here. Distributors should keep their eyes open on this point, beware of being deceived, and refuse to be cannon fodder. What future distributors must do is not to change the soup without changing the medicine and become agents in a different way, but to fundamentally change the business model. Second, look at the team. Transformation is not just about investing money; it's about your career for the rest of your life. If you just want to make quick money, it doesn't matter whether you transform or not; death is just a matter of time. And a career, besides having a business model that fits the trend, requires a reliable team, and a composite team. Distributor transformation is not just an internet issue, nor just a retail issue, but an organic combination of the two. Third, cultivate internal skills. After talking so much from the inside out, I still want to say: no matter how good the platform and trend are, opportunities are for those who are prepared. No matter how many external opportunities there are, you need to cultivate your internal skills to grasp them. Only by making yourself strong can you be truly strong. After all this, here's a bonus for everyone On April 9-10, 500 distributors will gather in Jinan to discuss the survival rules for distributors in the internet era. Everyone is welcome to come and debate! Copy https://jinshuju.net/f/S65ZNj to your browser to get registration information. Finally, I wish everyone can find better development opportunities in your own fields and achieve success! If you want to have an in-depth exchange with the editor, you can long-press the QR code below to add the editor's WeChat, and reply with 'transformation' when verifying. Click the 'Read Original' below to also get the registration form. -END- The best FMCG distributor learning platform in China Dedicated to providing enterprises and distributors with professional, practical, and actionable tutorials Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | [Long press QR code to follow]