Click to read the original text for details 01 Transformation to Warehouse and Distribution: A Reheated Topic Unified warehousing and distribution is a certain trend that no longer needs discussion. However, the topic of distributors transforming into warehouse and distribution providers is actually reheating old leftovers. Over the past two years, too many distributors have made such efforts and attempts one after another. In the bustling years of FMCG B2B, most selling platforms have been washed away by wind and rain, leaving only the warehouse and distribution field with a future to look forward to. Therefore, many companies have started transforming into warehouse and distribution, and this year's FMCG Internet Conference has also specially set up a forum on urban distribution. It can be foreseen that professional urban distribution will develop rapidly in the coming years. Is it feasible for distributors to transform into warehouse and distribution service providers? The industry has been paying attention and debating, but it seems that a consensus has not yet been reached. Since 2016, Wanchaobang has been involved in integrated FMCG warehouse and distribution services. Starting from serving distributors, it has now extended to serving many brand owners and e-commerce platforms; from dozens of orders per day to thousands per day. During this period, I have witnessed the transformation efforts of many distributors towards warehouse and distribution, and also seen their lamentable endings. My viewpoint is very clear: 99% of distributors transforming into warehouse and distribution is absolutely a false proposition. The fate of distributors can only find light and hope by exploring and striving in the market end they are inherently familiar with. This grand transformation of distributors into warehouse and distribution will ultimately be nothing but a mirror flower and water moon, leaving only a mess behind. 02 Transformation to Warehouse and Distribution: Who Is Singing? The reason this topic has become hot again is the instigation and promotion by technology companies and the media, coupled with catering to the wishes of distributors. The motives of technology companies are understandable. Selling a warehouse and distribution information system is certainly not as sexy as selling a business model or a dream. Of course, the price of a dream is far higher than that of a tool; otherwise, who would have the time to talk to you about dreams? Look at those distributors who, in previous years, bought B2B systems from technology companies with enthusiasm, dreaming of becoming the king of regional B2B. Who is still alive, who is still persisting, and who is silently licking their wounds in a corner? Distributors have people and vehicles, so transforming into warehouse and distribution seems to be the easiest direction for them to understand and accept. The media needs attention and topics, needs likes and shares, and saying what they like to hear is understandable, but failing to give distributors correct warnings and suggestions is at least a betrayal of the trust and expectations of their fans. A pit can be jumped into by a few people, but there is no need for a whole group to jump in one after another. In recent years, how many distributors have tried and worked hard to transform into B2B or warehouse and distribution? How much money have they lost, and what price have they paid? Who is truly paying attention and caring? And those who encouraged them to take this path often shirk responsibility after achieving their own goals. Of course, you can draw up a list saying that in a certain place, several distributors have already merged their warehousing and distribution, and so on. First, we need to clarify what true unified warehousing and distribution is. I have seen several distributors who have merged their warehouses but still manage and distribute separately. Apart from being able to coax some government logistics subsidies, can that be called unified warehousing and distribution? In some places, several distributors have jointly invested in a warehouse and distribution company, bringing their business in, seemingly achieving unified warehousing and distribution. But I ask: if a company only serves its shareholders and does not provide true third-party services, at best it can be called joint warehousing and distribution, not unified warehousing and distribution. Of course, someone will say, "Look at that person, they do a great job in warehouse and distribution services, and they have a distributor background." Not to mention whether the probability of less than 1% is convincing, do you understand the real background of their success? Some were transformed from state-owned enterprises, and some have received continuous government subsidies and support. Do ordinary distributors have such capabilities? Taking the individual as the universal, the exception as the rule, overgeneralizing, and ignoring the special resources and backgrounds of benchmarkers, interpreting it as "a success you can replicate," and advocating a group to collectively wade through muddy water—this is not professional or responsible behavior. I personally insist that the future of distributors lies in commerce flow rather than logistics. For traditional distributors to transform into professional warehouse and distribution service providers, the difficulty is no less than evolving from apes to humans. 03 Transformation to Warehouse and Distribution: Distributors Have Genetic Defects Distributors transforming into warehouse and distribution have natural genetic defects. I have stated this viewpoint more than once, and I have to repeat it here. The term "distributor" itself implies everything related to sales. Sales is their flowing blood, and the market is their battlefield. They are keenly aware of market conditions, have a natural intuition for goods, can attack terminals, and are good at promoting new products. They are the most dynamic force in the market. That era was called "channel is king." The market is changing, and now it is difficult. Some distributors have given up their core capabilities and even consider warehouse and distribution as their core competitiveness. This is actually a manifestation of the degradation of sales genes. This type of distributor, apart from advancing funds and delivering goods, has almost no influence or voice in the market. Distributors are competitive because of their keen sense of smell and flexible posture, while the standard capabilities, normative capabilities, and systematic capabilities required by third-party services run counter to these. Can distributors with degraded commerce flow genes grow the genes of professional logistics providers? Almost impossible. In the future logistics model, profitability is first based on enormous scale. Massive business volume, massive customers, and orders are needed to support it. And this professional operational capability cannot be developed by logistics distributors who previously relied on meticulous calculation and low-cost, unguaranteed operations. Competitors are enemies, and distributors naturally lack a sense of security, making shared warehousing and distribution and data almost impossible. Lacking a sense of security is an inherent crisis awareness of middlemen. Therefore, the vast majority of distributors will not hand over data to peers. Without the participation of peer businesses, how can you reduce costs and expand scale? Even in the joint warehouse and distribution model, I have not seen any that lasted more than a year. Generally, joint warehouse and distribution among distributors involves distributors of different categories. The problem is that with different categories, cost accounting becomes problematic. The profit margins and distribution scales of mineral water and liquor are vastly different, and the service scenarios, difficulty, and costs are completely different. How can they be balanced? Would a group that is meticulous to the bone not care? Among the customers served by Wanchaobang, there are distributors with a strong sense of security. They have nearly 50 sales staff, directly supply nearly 10,000 terminals, have a brand matrix of over 20, have deployed special-channel vending machines, and have a comprehensive gross margin of nearly 25%. With people, products, and networks, how can they not have profits? Every group has its own destiny. Those who are willing are led by destiny; those who are unwilling are dragged by destiny. The direction of warehouse and distribution is not the destiny of distributors.