Dear readers, I'm Yuan Lai from New Distribution. Recently, I visited B2b supply chain platforms in various places, all of which were built by distributors on top of their existing trading businesses. During my exchanges, one distributor boss's words struck me deeply. He emphasized: "Distributors venturing into B2b must never bet their entire livelihood on it. They should attempt the B2b supply chain platform business on the foundation of their existing trading operations, and even then, not rush into it with reckless abandon." After hearing this, I couldn't agree more. This article compiles the ten most core insights and recommendations I've gathered from visiting over a dozen cities and discussing B2b platforms. These are real feelings from the front lines, and I hope they can bring thoughts and inspiration to distributor bosses who are currently doing B2b or planning to do so. Business Mindset The B2b platform business is completely different from past businesses. I believe that distributors, whether currently engaged in B2b or about to start, already have a basic understanding. However, during my visits and exchanges, I felt that many bosses' mindsets have not fully shifted. Mainstream distributors' business is centered on brand agency. Category distributors' business is centered on category combination. B2b supply chain platform business is centered on store demand. Core responsible persons in each position of the B2b platform need daily reminders and emphasis on this. Resource Prioritization The profit logic for mainstream distributors is: task completion rebates + expense investment retention + product price differences + project execution rewards. The profit logic for B2b supply chain platforms is: product price differences + product turnover. Whether products are sourced correctly and whether prices are cheap not only determines whether the platform can turn losses into profits but also is key to whether stores are willing to continue purchasing. Whether activities are well-designed, whether salespeople are diligent, whether picking errors occur... Although these are also important, if you rank priorities, product sourcing and sales must be TOP1. Business Goals A pure B2b platform in a third- or fourth-tier city, frankly speaking, will find it hard to make the money that traditional distribution agency business could.
B2b platform + local community retail
B2b platform + **category (LKA supermarkets/BC supermarkets) whole-store output
B2b platform + special channel product supply chain services (schools/enterprises/institutions/canteens)
B2b platform + full-category distribution regional monopoly
B2b platform + catering circulation B2b platform
B2b platform + ... Once you build a local city's FMCG standard product supply chain network, upstream and downstream resources will gradually come closer to you. You can further expand your business based on your capabilities, endowments, and past accumulation. Organizational Structure Many distributors pay lip service to the importance of sourcing and sales, but in terms of staffing and resource allocation, it's often insufficient. When store business sales starts, they hire five or six people, divided into areas and routes. But for the sourcing position, they first hire one person, who also doubles as the trading order clerk. Since you recognize the importance of sourcing, it should be reflected in recruitment interviews, personnel quality, and capability training. With business sales as the core, it's still the logic of pushing products. Only with an organizational structure centered on sourcing can you truly shift to a store demand perspective. Advantage Categories When a distributor starts B2b from 0 to 1, the pursuit is definitely product "completeness," having every category. But in the 1 to 10 stage, you must establish advantage categories. It's important to let store owners have a strong and deep impression of your B2b platform: whether it's strong in snacks, paper products and oral care, or rice, flour, and seasonings. Without advantage categories, you often get dragged into endless platform price competition. Benchmark Stores Let's do the math: Suppose a B2b platform covers 5,000 stores with annual sales of 100 million. Among them, 300 stores (6% of total stores) purchase an average of 10,000 per month * 12 months = 36 million (36% of sales). One store with an average monthly purchase of 10,000 (need to pay attention to the number of SKUs purchased, not all beverages), excluding alcohol and tobacco purchases, accounts for about 1/3 of the store's total purchases. With a 1/3 share, you can become the store's core supplier. Tiered store management is the core of continuous business advancement. Store Research Having talked with so many B2b platforms, I'd like to share four suggestions on how to shift to a store-demand-centric business mindset: First, have sourcing staff visit stores one day a week; Second, if there's an opportunity, open one or two stores as employee training bases; Third, invite store owners to the company once a month for product seminars; Fourth, spend money on courses and training. Relative Advantage We are not building a "professional," "scientific," or "perfect" B2b supply chain platform. We don't compete comprehensively but establish relative advantages in some categories or even some stores. Continuous Improvement I suggest distributors break through one or two categories each year, and over a longer period, you can build your core competitiveness. Establish a 52-week product planning system by category. In product selection, no platform gets all 3,000 SKUs right from the start. Continuous improvement and iteration are basic business principles. Also, don't be too impatient, rushing into things. In the first month, 1,000 stores; in six months, 3,000 stores. Store registration isn't important, and even active store numbers aren't important. What matters is whether the SKU penetration rate of active stores is continuously increasing and whether category penetration is continuously improving. Not the Only Path B2b supply chain platforms are not the only way out for distributors. Don't become obsessed with B2b. Snack category operators Seasoning category operators Daily chemical category operators Instant retail O2O channel operators Core suppliers for KA systems Gift box customization operators ... There are many other business opportunities. It's just that today's business must shift from relationship-based to professional service-based. The above represents only my personal thoughts and summary, for reference only. I hope distributors and entrepreneurs go smoothly on the B2b path!