**** In 2016, B-end e-commerce surged, bringing transformation to the FMCG industry. Amid the wave of 'disintermediation,' Piduoduo consistently advocated and practiced the distributed B-end e-commerce model, adhering to distributors as the mainstay, without burning money, subsidies, price disruption, or hijacking, helping distributors complete their transformation into platform operators. In fact, distributors, as the link connecting upstream and downstream resources in the industry chain, are themselves platforms, just not yet fully platformized. As long as distributors fully recognize and leverage their platform value, they can gradually shift from a simple agency sales role to becoming regional market operators, and thus become true platform operators. Reassessing the Platform Value of Distributors If 2015 was the starting year for distributors' Internet+, then 2016 is the first year of distributors' Internet+. A few months ago, JD.com and Alibaba made high-profile moves into the FMCG supply and marketing sector, proposing 'disintermediation' and 'direct supply to terminals,' pushing the distributor community to the forefront. At the same time, some mainstream FMCG distributors entered the e-commerce field, embracing the Internet, learning about and practicing distributor Internet+, and seeking transformation and breakthroughs. Distributors have always been seen as the bridge and link between manufacturers and channels. Manufacturers 'sell' their products to distributors, who then 'sell' to various channel players such as second-tier wholesalers, supermarkets, and retail stores, and finally to consumers. From this, we can see that the traditional industry chain is actually a top-down, one-way, linear distribution system. The value chain corresponding to the industry chain is formed on the basis of 'buying and selling,' through profit settings at each link, resulting in a price system from low to high. In this unilateral industry value chain, the value of products is increased layer by layer due to channel costs, ultimately failing to improve resource utilization efficiency and making it difficult to achieve profit maximization. Therefore, for the entire industry value chain, including distributors, what is lacking is not resources, but mechanisms and platforms to integrate resources. Especially in today's world of abundant products and increasingly perfect channels, how to quickly discover and meet the needs of terminals and consumers, how to efficiently integrate and utilize regional market resources, and thus maximize the value output of the industry chain, has become an urgent problem for the entire FMCG industry. So, who can play the role of regional resource integrator? Piduoduo believes that it is precisely the distributors who bear the responsibility for regional market channel development and management. As the link connecting upstream and downstream resources in the industry chain, distributors themselves are platforms, just not yet fully platformized. As long as distributors fully recognize and leverage their platform value, they can gradually shift from a simple agency sales role to becoming regional market operators, and thus become true platform operators. Distributor + Internet = Platform Operator A platform operator is one that acts as a market resource allocation platform, based on resources such as personnel, logistics, warehousing, and capital, integrating upstream product resources and downstream terminal resources, extending more service content oriented by consumption, and meeting the diversified needs of the market as much as possible. So, how can distributors achieve the transformation to platform operators? In this regard, Piduoduo took the lead in advocating and practicing the distributed e-commerce model. Based on the distributor's operating area, through the '+Internet' approach, it builds a localized B2B terminal procurement platform. The platform is open, and all distributors in the region can join or settle in. By moving offline transactions online, it gradually achieves 'unified storage, unified transportation, unified procurement, and unified transactions,' achieving the goals of improving efficiency, reducing costs, saving expenses, and expanding sales. Each local platform operates independently, undergoing Internet-based transformation according to its own operating model, products, and processes. Compared with traditional e-commerce, the advantages of distributed e-commerce are: First, distributors are the core operators of the platform, not the targets of 'disintermediation.' In other words, distributed e-commerce will not subvert the existing distribution pattern of the FMCG industry. After 30 years of development, the FMCG industry has formed a relatively stable distribution model with regional and hierarchical divisions among first-tier brands. 'Disintermediation' means destroying the existing distribution channel structure and price system, which would not only cause distributors to fight desperately but also provoke resistance from brand manufacturers. Distributed e-commerce does not have such problems. Second, distributed e-commerce is a self-transformation for distributors. Distributors have innate platform genes. On one hand, they already control a portion of the supply; on the other hand, they control the retail terminals in the local market. Therefore, during the platformization process, distributors can quickly introduce retail terminals and convert offline stock into online traffic. In other words, the 'users' and 'traffic' problems that are hardest for traditional e-commerce to solve become natural for distributors. Third, the channel service function of distributors is irreplaceable. Distributors not only play the role of platform suppliers but are also the best candidates for platform service providers. Whether in traditional distribution or e-commerce distribution models, a series of after-sales services must be provided to retail terminals, along with related marketing activities such as shelf placement, display, promotion, merchandising, and returns/exchanges. These tasks have always been the 'duty' of distributors, so they are more familiar with them than anyone else. It can be seen that distributors have the opportunity and ability to undergo '+Internet' transformation and become platform operators in regional markets. Piduoduo's distributed e-commerce is undoubtedly the best path for distributors' Internet+ transformation! Building Platforms to Achieve Diversified Profit Models Through platform transformation and building distributed e-commerce, distributors not only solve the problems of high labor, storage, and management costs under traditional vehicle sales and visit sales models, but also, based on the platform's media and channel characteristics, can shift from solely earning product purchase-sale price differences to diversified profit models. Under the traditional agency model, distributors only earn the price difference between purchase and sale. However, the gross profit margins in FMCG are generally low, and coupled with the high-cost, low-efficiency, multi-link distribution model, there is almost no profit. The value of distributed e-commerce lies precisely in using Internet technology tools and operational thinking to achieve intensive operations, effectively reduce operating costs, improve operational efficiency, and on this basis, explore new profit points. First, self-operated product price differences. Through the platform distribution model of distributed e-commerce, distributors can take on more brand agencies with the same vehicles and personnel, leveraging product portfolios to maximize benefits. Second, warehousing and logistics custody commissions. Through centralized warehousing and distribution, they can provide warehousing and distribution services to platform suppliers and charge certain commissions. Given the huge volume of the B-end, this part of the revenue is also considerable. Third, marketing service fees. Through the platform, they can provide manufacturers with various marketing services such as regional market recruitment, distribution, and sales promotion, charging fees for these services. Manufacturers are very willing to pay for this. Fourth, media and advertising revenue. The platform is not only a channel but also has media attributes. Through online APP advertising, promotional information push, and new media communication, they can carry out brand communication and promotion and charge related fees. Fifth, platform transaction commission. The platform provides online transactions and services for suppliers and shares terminal customer resources. This can not only optimize existing stock but also create incremental growth, and the platform benefits by taking a commission on transactions. In addition, the platform can also provide financial services and other support to all parties, helping distributors gradually achieve diversified profits. Based on the 'Four No's,' Platforms Are Not Built by Burning Money It should be noted that distributors building distributed e-commerce is not just about establishing an ordering platform; it is an overall solution based on Internet+. This also determines that distributed e-commerce is fundamentally different from traditional e-commerce in terms of operating models. In this regard, Mr. Liu Chunxiong, strategic advisor to Piduoduo, pointed out that although B-end is also e-commerce, it represents a new e-commerce logic. In the operation process, it must truly achieve the 'Four No's': no burning money, no price disruption, no subsidies, and no hijacking. If the 'Four No's' are not achieved, it indicates that the logic is flawed, so no matter what you do, it is wrong! And these 'Four No's' are precisely the most distinctive features of distributed e-commerce! Why can't you burn money? Because the B-end volume is too large, burning money is a bottomless pit, and no matter how much money you burn, you cannot burn out an oligopoly. Why can't you disrupt prices? Because price disruption cannot force others to cooperate. Once prices are disrupted, it hurts not others but yourself. Why can't you subsidize? Because subsidies can only bring short-term traffic increases but cannot cultivate terminal customer loyalty. Why can't you hijack? Because the platform is co-built by distributors. Those who hijack cannot build a platform; the logic is completely wrong! To this end, Piduoduo, based on the 'Four No's,' does not pursue channel monopoly through self-built warehousing, logistics, or teams. Instead, it uses the concept of the sharing economy to enhance the professional service level of channel intermediaries, achieve optimal allocation of channel resources, and build a localized supply chain ecosystem. In this process, Piduoduo not only provides distributors with a reliable and stable technology platform but also supports it with a strong operating system. During platform introduction, through research on distributors and their markets, sorting out channel networks, optimizing product structures, adjusting team organizations, and adopting the method of 'solutions + tools + training + coaching,' it gradually improves distributors' operational capabilities, ensuring smooth market launch and steady progress. Finally, the author gives everyone a piece of advice: Distributor Internet+ is not just about establishing an ordering platform; it tests the operational capabilities and skills of distributors. It requires formulating specific operational plans and promotion rhythms based on the characteristics of the local market and the company's actual situation. The latter is the key to determining the success or failure of the platform! ****************- END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors 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 operations | 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 | 016 Distributor B2B transformation | [Long press QR code to follow]