Click to read the original text for details. Transformation is the biggest consensus among dealers in recent years. But where to turn remains the biggest confusion for dealers today. This year, whether to transform is no longer a topic for discussion; choosing where to turn is the key. 01. Theoretical Options for Dealer Transformation From past discussions and practices, in essence, all types of dealer transformation require self-revolution, repositioning and selecting the traditional commercial "four flows in one" function to take a specialized path. Therefore, hoping for a completely painless transformation is basically wishful thinking. Some may want to join the internet giant system, or follow the so-called new retail to complete transformation, but by the end of the year, the chance of becoming "leeks" (being exploited) is not lower than that of Chinese stock market investors. Rely on the mountain and the mountain falls; rely on people and people run away. After clarifying the theoretical options for dealers to transform through self-reliance, there are roughly only two paths: left and right. To the left is commercial flow: strengthen marketing capabilities and promotion capabilities to become a "local strongman" controlling the market; to the right is service: strengthen the service team and upgrade to a unified warehouse and distribution service provider. Of course, many still want to expand both commercial flow and logistics simultaneously. The reasons are understandable, as it is human nature, but in 2017, all such attempts ended in failure. The reasons for failure need not be repeated. I once asked a dealer, "Would you let another dealer in this city deliver your orders?" He said definitely not, but naively believed that other dealers might give him their orders for delivery. New Distribution has previously suggested: if you do commercial flow, don't do logistics; if you do logistics, don't touch commercial flow. 02. Transformation Choices Require a Sense of Direction Why is the choice of transformation more important than transformation itself? Because today you cannot afford to make mistakes. Two years ago, the cost of transformation was low, and you had the opportunity to try and err; today, everyone is seeking transformation, and the cost of choice is high. The market will not give you another chance to choose. Some dealers, just because their business is not profitable, want to transform into services, but then they will find it even harder to make money. There is no easy thing to do in this era. Embracing the internet does not mean handing over your lifeline (commercial flow) to internet companies. If you hand the knife handle to others, you may be the first to be cut by the knife they swing. In times of anxiety, making a blind choice is not called trial and error; it's called testing stupidity. Transformation choices first require a sense of direction. Where is the direction? Look at what will be scarce in the coming years and what you can strive to achieve; that is the direction. In the future, what will be scarce: first, offline brand promotion capabilities, market operation capabilities, or the ability to connect; second, offline professional basic commercial service capabilities. So, is there an opportunity in commercial flow? Yes! Is there an opportunity in logistics? Yes! But is it your opportunity? Not necessarily! 03. Left or Right Depends on Core Competencies First, look at commercial flow. 90% of dealers in China have always been on an unprofessional path, forcing major brands to directly operate terminals in central cities, relying on their massive frontline salespeople to take orders. Brand owners have become nannies, and dealers have willingly degenerated into porters, earning handling fees that require almost no thinking. But now, the "handling fees" that brand owners can allocate are getting smaller and smaller. But have brand owners had good days in recent years? Not really. The traditional deep distribution management model of large armies is gradually failing, personnel costs are rising year by year, and the FMCG industry entered a slow decline channel in 2013. In previous years, they held on to scale and dared not lay off staff, but look at 2017: a large number of frontline teams of first-tier brands have laid off more than 20%! Does the remaining market network need to be taken over? Do brands need promotion offline? Do so many sales points need to be connected? Do key terminals need to be occupied? What a huge opportunity this is! In the coming years, professional marketing companies will have the greatest opportunity. Brand owners will gradually return market promotion, frontline management, and market expenses to channel dealers, but are you ready? Dealers have natural local advantages and flexible institutional advantages. If they miniaturize business teams, make business backbone partners, and focus the company on brand promotion and market operation, is there an opportunity to control the market and earn considerable profits instead of porter fees? If they also outsource warehousing and distribution to third-party service companies, operate with light assets, and gain more convenient financing channels through warehouse and distribution outsourcing, with a leaner and more professional team, is there a greater chance to create higher per capita output? Now look at logistics. The FMCG city distribution market will definitely see rapid development of third-party services in the coming period, especially in central cities. But unlike commercial flow, third-party logistics is standardized operations, which must prioritize systematization and scale; standardized and scaled markets will eventually move toward concentration. Whether the path suits you requires careful consideration. It is important to deeply understand that third-party distribution is not simply delivery. In a sense, it is a large industrial operation model, requiring systematic technical capabilities, large team management capabilities, and standardized implementation and replication capabilities. The Wanchaobang team has been operating FMCG same-city warehouse and distribution integration since 2015, including system development, market recruitment, service standard establishment and implementation. The process has been arduous, with many pitfalls, beyond words. Objectively speaking, what third-party logistics requires is precisely contrary to the core flexible advantages of dealers. Dealers who can meet those requirements may be less than one in a hundred. Of course, cooperating with professional third-party service companies, even through joint ventures, by providing existing delivery vehicles or capacity, revitalizing assets and earning returns, is another viable business. Whether going left or right, dealers must make a choice to see the future. But before choosing, be cautious; after choosing, persist. Without caution before choosing, persistence afterward is meaningless. On October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference" . We will invite industry experts, FMCG warehouse and distribution specialists, and dealers who have transformed into unified warehouse and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of dealer transformation to unified warehouse and distribution, hoping to bring you different inspiration and thinking! -END-