---
title: "Before Distributors Dive into B2B, You Need to Understand..."
description: "In 2016, B2B models disrupting the FMCG industry became a hot topic, with nearly a hundred platforms entering the supply and distribution sector, leaving distributors anxious about how to respond to internet-driven channel changes. While some distributors are attempting to transform by embracing the internet, joining platforms, or starting their own B2B companies, most lack understanding of these new concepts and terms, and have no good way to learn."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-11-01"
language: "en"
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# Before Distributors Dive into B2B, You Need to Understand...

> In 2016, B2B models disrupting the FMCG industry became a hot topic, with nearly a hundred platforms entering the supply and distribution sector, leaving distributors anxious about how to respond to internet-driven channel changes. While some distributors are attempting to transform by embracing the internet, joining platforms, or starting their own B2B companies, most lack understanding of these new concepts and terms, and have no good way to learn.

> In 2016, the FMCG industry had a hot topic: the disruption of the industry by B2B models. Nearly a hundred platforms successively entered the FMCG supply and distribution field, and distributors were suddenly on edge, unsure how to respond to the internet's transformation of existing channels.
Of course, some distributors are also trying to seek transformation, actively embracing the internet, joining platforms, or starting their own B2B platform companies. However, the problem for the vast majority of distributors is that they simply do not understand these new concepts and terms; they want to learn but lack good channels.
Domestic B2B platforms that distributors can participate in generally fall into four models:
> > **First: Franchise Supply Chain Platforms**
Platforms like Zhanghe Tianxia, Tongying Tianxia, Wankai Wanwu, Pi Duoduo, Yunbao Shangmeng, Wdian Yigou, Wanshang Yizhan, etc., where the platform provides technical and operational guidance, and distributors handle market development and supply chain organization. This type has the most platforms and is the most common model for distributor participation.
**Advantages: The platform provides technical and operational support, relieving franchisees of backend operational worries.**
> > **Second: Franchise Convenience Store Platforms**
Platforms like Beiquan, Quanshi Bianli, Meitianhui, which are similar to franchise supply chain platforms, with the platform providing technical and operational guidance, and distributors handling store rebranding and supply chain organization, along with value-added services.
**Advantages: Same as above, the platform provides technical and operational support, relieving franchisees of backend operational worries.**
> > **Third: Technology Support Platforms**
Platforms like Zhongke Shangruan, which provide platform technology to distributors, allowing them to design their own models and operational strategies.
**Advantages: Distributors can customize platform functions and attributes according to their own characteristics.**
> > **Fourth: Franchise Logistics Platforms**
Platforms like Yishang, Weicheng Peisong, Yijia Logistics, etc. Strictly speaking, these are not B2B but rather the infrastructure for B2B. However, logistics is the core of B2B, so unified warehousing and distribution is also an ideal transformation model for distributors.
**Advantages: Logistics is the foundation for successful B2B operations. Franchisees have rich operational experience and professional software technology, helping distributors quickly implement logistics hardware and software.**
> Regarding transformation, as mentioned in my previous articles, not all distributors are suitable for transformation. Given the characteristics of B2B platforms, extremely high transaction volumes are needed to cover operational costs. I have categorized whether distributors at various stages are suitable for B2B:
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> **Distributors with sales scale below 10-20 million RMB:**
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> Small distributors with sales below 10-20 million RMB are not the ideal scale for B2B platforms due to their capital strength and product influence in the local market. Distributors with sales below 10-20 million RMB often have non-standard management and operations in their trading companies, lack management systems, and their products and personal brands have weak market influence locally. However, their small scale means relatively lower operational costs and more considerable profit margins compared to larger distributors.
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> Recommendation: For distributors with local population over 1 million and sales below 20 million RMB, I do not recommend considering B2B platforms.
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> For distributors with local population below 1 million and sales below 10 million RMB, I also do not recommend considering B2B.
> **Distributors with sales scale of 20-50 million RMB:**
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> The mainstream sales scale for FMCG distributors in China is basically between 20-50 million RMB. At this stage, distributors are affected by brand and market capacity, and their own capital, mindset, and management capabilities have reached limits. Thus, it is difficult to achieve major breakthroughs in sales growth, and operational efficiency is hard to improve through good organizational management.
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> At this stage, distributors have the highest operational costs and the lowest operational efficiency. They are also the ones most in need of transformation and change.
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> Of course, the transformation and change mentioned here include internet B2B platforms as one option. For distributors, improving internal management systems and using tools to enhance operational efficiency remain the primary tasks.
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> Especially for B2B platforms, the investment is relatively large, and it is difficult for a single distributor's strength to operate the platform healthily.
> **Distributors with sales scale of 50 million-100 million RMB:**
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> Distributors with sales between 50 million and 100 million RMB have relatively standardized management and systematic operational systems, having basically broken through their own management bottlenecks. However, they may be affected by market capacity and business opportunities. This does not prevent continued growth and expansion if suitable business opportunities arise. At this point, a B2B platform is an excellent horizontal brand expansion plan. However, since their own transaction volume and brand count are insufficient to support a B2B platform's operation, distributors at this scale still need to ally with other distributors to launch a B2B platform.
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> Recommendation:
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> Distributors at this scale (20 million-100 million RMB) are not suitable to go it alone; instead, several like-minded distributors should join forces, jointly investing in B2B. Of course, this partnership is not just about capital but also unifying products, operations, and thinking to succeed in the local market.
> **Distributors with sales scale above 100 million RMB:**
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> Distributors with sales above 100 million RMB have relatively standardized operations. Although operational costs are high, they drive efficiency through standardized organizational management, resulting in relatively high operational efficiency. In the regional market, they may have a certain monopoly position in some brands or categories. Distributors at this scale already have the strength to independently operate a B2B platform.
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> Recommendation: Distributors above this scale can consider independently operating a B2B platform, or adopt a self-operated + matching model, using unified warehousing and distribution logistics to integrate all local FMCG products onto the platform.
**The above are my basic recommendations on whether distributors at various stages can do B2B platforms. Of course, the specific implementation paths, methods, and approaches need to be tailored to the different characteristics of each market and industry.**


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