Follow and star ↑↑ [New Distribution] See how many friends are following industry trends with you In 2018, across the entire retail industry, "community group buying" was undoubtedly the hottest trend. Especially in the second half of the year, various hot reports on "community group buying" awakened many peers stuck in the FMCG dilemma. Almost everyone is looking for opportunities. "Community group buying" is the last straw that has been validated by successful cases, recognized by capital, and eagerly sought by peers. Of course, there are supporters and opponents. Here, I won't discuss who is right or wrong; I only know that social e-commerce is just beginning! Many people say "community group buying" is a capital battle with "low barriers and no competitive moats." Those who say this must be bystanders who have never done it. Here, I quote a statement from Mr. Liu Chunxiong in a speech: "Community group buying is a high-threshold operational skill." In my understanding, the threshold is not at the foot but at the "waist." Therefore, I especially remind regional FMCG B2B platforms and capable distributors: the protagonists of this "community group buying" battle should actually be distributors, and it must become one of the essential business methods for distributors. Community group buying can fully achieve your "regional breakthrough, channel breakthrough, category breakthrough, and profit space breakthrough," and with more support from brand manufacturers' "e-commerce departments," you will no longer be oppressed by upstream brand manufacturers and downstream large stores, but become the controller of redistributing benefits and cutting the cake. First, let me use this chart to explain the department structure of "community group buying" in a single city: From the organizational structure of "community group buying" above, it is almost the same as the B2B platform department that distributors are currently running. It requires people to develop business, be responsible for platform operations, negotiate with suppliers, be responsible for warehousing and distribution, and handle various after-sales issues. Of course, there are still many different "points" that we need to pay attention to. Let me share with you according to the specific work of each department. How much do distributors need to invest in community group buying, and where does the investment go? First, let's list the main areas where money will be spent: personnel, office, procurement, warehousing and distribution, and loss.

  1. For distributors starting social e-commerce, personnel need to add: 1 product selection and procurement specialist, 2 business development staff for opening groups, 1 operations staff, 1 warehousing and distribution manager, and 1 graphic designer/copywriter, totaling 6 additional staff. Other positions can be filled by existing personnel. In prefecture-level cities, the average salary should not exceed 5,000 yuan, so 6 people cost 30,000 yuan per month.
  2. Office: Use the original office, warehouse, and equipment. Some office equipment and consumables may be added, but this is basically negligible.
  3. Procurement: Mainly for purchasing sold goods or reserving inventory. The goods themselves are profitable, so a few tens of thousands of yuan in procurement reserve funds is enough. Most goods are paid for by customers in advance, and we have credit terms with upstream suppliers, so this can also be ignored.
  4. Warehousing and distribution: These are essential basic conditions for distributors. Community e-commerce does not require large warehouse space; most goods are received and sorted on the same day, which may temporarily increase sorting labor costs. Distribution: Distributors have vehicles. For community group buying, all goods usually need to be delivered to the group leader's network points before 12:00 noon. A vehicle can normally deliver to 10-15 network points per trip. If order volume is large, the number of delivery points will decrease. For now, let's uniformly calculate warehousing and distribution costs as 7% of business turnover, which is neither high nor low, depending on business volume, regional distribution, and warehousing and distribution management capabilities.
  5. Loss is a big topic. If done well, you can achieve zero loss; if done poorly, it can eat up all your gross profit and more. I'll discuss this later, not in detail here. I often joke with others: opening a standard convenience store requires an investment of about 500,000 yuan. How long would it take to become profitable? If you take that 500,000 yuan and open online stores covering 50 high-density residential communities, which method is faster, more economical, and more effective? Should distributors do community group buying alone or with partners and multiple shareholders? Why do I bring up this topic? Because when chatting with several distributor friends, they are hesitant and lack confidence, always thinking they need to find several local distributors to join forces and form a strong alliance. This is also my biggest concern, so I specifically want to discuss it. Most distributors started as mom-and-pop stores, accustomed to "working alone, managing money and spending by themselves, with messy accounts, not knowing if they are making or losing money, but in short: they have the final say." If you join together, who will submit to whom? Who listens to whom? Who trusts whom? Often making friends is easy, but doing business together truly tests one's breadth of mind and pattern. If things go poorly, they doubt your ability; if things go well, they start doubting your character. I'm not belittling anyone here; I just think it's unnecessary for social e-commerce. Don't create trouble for yourself, because it doesn't require much investment, won't conflict with peers' channels, and can help peers sell goods. Handle simple things simply; don't complicate simple matters. If you really feel you can't manage it alone, you can find a few young people around 30 years old to work together, jointly invest and partner, with you holding the majority stake and the young people holding minority stakes. When profitable, you can give more dividends. Young people get entrepreneurial opportunities, and since they are spending their own money, they will work hard. You also save worry, because it's hard for distributors to focus solely on social e-commerce at the beginning. "Social e-commerce" is a brand-new business, and you can't carry any baggage. Questions to Consider When Opening Groups 1. Are store owners or stay-at-home moms more suitable as group leaders? What are their respective advantages and disadvantages? 2. How can group leaders quickly attract people to the group, and what kind of people are your effective customers? Based on analysis of operational scores from various places, the following conclusions are drawn: Women account for 79.27% of purchases, meaning women are our main customer group. △ Age group data analysis chart Category purchase analysis: The main categories are "vegetables, fruits, meat, seafood, and high-value-for-money hot products." From the above data, it's clear who should be brought into the group and who are effective customers. Distributors should spend more energy on target customers, so they must understand women's needs and pain points. 3. How to choose the most economical and effective area for opening groups? Based on past experience in opening groups and operations, the approach in first- and second-tier cities is to lock in specific areas and logistics routes, focusing on urban consumer positioning and logistics costs. Don't scatter your efforts everywhere; otherwise, service capabilities cannot keep up. Consumers are emotional and perceptual. If they are hurt once and not handled well, performance drops by 50%. If another mistake occurs and after-sales is not handled well, few customers will remain. Finally, the group leader will lose hope, and the group will become dead. It's not easy to re-ignite the brand in that community. In third-, fourth-, and fifth-tier cities, because the city is small, the main consideration is logistics delivery and timeliness, ensuring all goods are delivered to group leaders before 11:30 AM. 4. How can group leaders increase user stickiness and achieve fission? Many community group buying companies, upon entering a new city, immediately hire 20 salespeople to spread across the city looking for group leaders. This is a typical capitalist approach. Without sufficient logistical support as a premise, such short-sightedness will inevitably lead to failure. I don't agree with this approach. In my view, when entering any new city, you should "go slow first, then fast," and cultivate internal skills. A generally safe approach is: first open two routes with 20 groups, focus on cultivating and serving them well, establish several model group leaders, and after these 20 groups are stable through a month of operation, then open new groups. Some old groups will inevitably become inactive, so you need to replace group leaders to keep them active. In actual operations, it's found that as long as product quality and service are good, many people who want to do this will proactively come to you. Moreover, some group leaders with "e-commerce experience" and community connections, who have been hurt by other groups and had to give up, will seek a reliable community group buying platform to cooperate with. For group leaders, the most concerning factors are: product quality, timely delivery, timely after-sales, product variety, guaranteed income, and a warm team. To promote a fission mechanism where group leaders introduce other group leaders, a group leader can be promoted to a "brigade leader" level, enjoying their own group leader income plus additional performance commissions from new group leaders they develop. Set commission levels: two-level model (legal, not pyramid scheme). For the content on opening groups, I'll share this much for now. Next, I'll share the operations part of community group buying. Operations Department 1. Which categories should be chosen at the start? What is the product selection logic? How to control gross profit margins? Because you are an FMCG distributor, it's easy to fall into the misconception that your products sell well, but in social e-commerce, that's not necessarily true. Low prices don't guarantee a rush to buy. The most important thing is to think from the consumer's perspective, based on daily household consumption habits and consumption cycles. As mentioned above, the main categories are: vegetables, fruits, meat, seafood, and high-value-for-money hot products. These are the most household-sticky products, needed almost daily. We should think more about the family's "kitchen, refrigerator, dining table, living room, and bathroom," women's love for eating and beauty, and children's nutrition and health, guiding customers to pursue a quality life of "delicious, healthy, and beautiful." One of the most headache-inducing problems when starting operations was: how to find more new products. Here, "new products" doesn't mean all products in the distributor's warehouse, but products that meet customer needs, and there shouldn't be too much overlap in products with the same function. Community group buying is not about having a rich assortment like a comprehensive supermarket, but about working on combinations of products across categories, functions, and assortments, achieving "quality products, accurate positioning, reasonable specifications, and scenario-based marketing." Additionally, products in each city have limitations, and consumers prefer to buy good things they can't usually get locally. If distributors are confident in quality control, I suggest starting with more non-standard fresh products and some daily necessities in standard products, keeping at least 30% of products different each day, and releasing about 5 new products daily. If the WeChat mini-program mall has categories, the number of SKUs can be maintained between 50 and 100 per day. If there are no categories, it's recommended to keep within 50 SKUs to avoid affecting the customer browsing and shopping experience. Here, I strongly suggest that distributors doing community group buying recruit operations staff, preferably local women who are family-oriented, with typical characteristics: good at cooking, excellent at raising children, very meticulous, proactive in chatting, knowledgeable about marketing and healthy living, love shopping in malls and supermarkets, and are sensitive to product quality and price. If they have e-commerce experience, even better. You might think these requirements are too demanding, but this person is indeed too important. Operations need to revolve around customers, and the company team revolves around operations. If the center deviates, the whole plate deviates. 2. How to quickly cultivate and solve group leaders' ability to sell in groups? In community group buying, there is usually a group leader group in each city, which is a group for interaction, communication, and training between the platform and group leaders. There is usually also a "muted group" where the platform publishes various images and copy materials. Group leaders need to get materials from this muted group and forward them to their own groups, saving group leaders a lot of time and energy, and standardizing product introductions and promotional copy. Currently, most first-, second-, and third-tier cities should have community group buying platforms. It's normal for a community to have 4-5 platforms, and customers may have multiple similar groups in WeChat. The group buying groups are constantly messaging all day. Obviously, customers have already muted the groups, so won't they miss the messages? Here, I'll share a simple method: group leaders can establish one-on-one relationships with customers for private promotion. Group leaders must be very familiar with their customers and build private relationships. Some excellent group leaders with 300-person groups can achieve a 30% daily order rate, selling over 3,000 yuan a day. But some group leaders only get a few orders a day. It's just a matter of dedication. We also often organize online learning exchanges and offline gatherings for group leaders, which increases the stickiness between group leaders and the company, and can drive a group of group leaders who want to do well to boost performance. Group leaders who cannot be activated should be decisively abandoned or replaced with a new group leader in the same community. Previously, you might think that a group leader's customers can only be people in the community, but in fact, group leaders can sell goods to relatives and friends across the city. Customers can choose their own pickup points when placing orders. In the future, group leaders may not have pickup points, and dedicated pickup points will handle receiving and picking up goods. There are many small tricks in selling. Training before releasing new products is also very important, otherwise you may face an awkward outcome. 3. How to use technology to solve category conflicts between the platform and convenience stores? Here, I want to emphasize the issue of convenience stores. Convenience stores are originally in business, and community group buying is also in business. They complement each other, but there are conflicts, especially in standard products. The platform has a price advantage, while convenience stores have higher costs and thus require higher profit margins. At this conflict point, you can use the backend to publish different products to different types of group leader online stores, solving the competing product conflict. The function can also publish different products for "different levels of communities, different populations, and different locations." For example: old communities, poor communities, high-end communities, office buildings, campuses, hospitals, etc., can receive different products. Consumers can only see products they need and can afford. Otherwise, those who can't afford will say the products are too expensive and high-end; high-end customers with spending power will think the products are too low-end and not interested. In plain terms, it's called "identity matching." 4. Operate online chain stores with the mindset of opening a chain of physical stores; otherwise, burning money won't retain people. When doing social e-commerce, you must consider: How long can community group buying last? What will the next stage of development and evolution look like? Everyone's thinking will differ, but one thing is certain: no matter how it evolves, families cannot do without daily necessities. I have an immature idea: in the future, excellent group leaders will become "online + offline" physical stores. As business grows, small spaces and small businesses can no longer meet demand, so they gradually become full-time store owners. Doing community group buying first solves the problem of basic traffic and stable income. Later, they can rent a small space on the first floor in the community and open their own community "online and offline" experience store. So my view is: when doing social e-commerce, treat the online store like a "physical store" and operate it with care, never "shoot and run." I believe this business is not entirely the capitalists' dish, just like the B2B platform. Everyone thought that when BAT capitalists came, the industry would be doomed. Now the facts are right in front of us: those who took big money died faster. So don't worry or fear. I think the spring of social e-commerce is just beginning. 5. How to stand out from competitors in the same industry? The biggest competitor is not others, but yourself! As long as you stick to the following points, you don't need to worry about even the strongest competitors:
  1. Social e-commerce is a commodity circulation transaction based on social relationships, not a simple buying and selling relationship.
  2. Do every community down-to-earth. Don't lose quality for quantity; otherwise, you'll lose as many as you make.
  3. Use the mindset of buying vegetables and fruits for your own family to help customers carefully select products, strictly control quality and service. Customers gained by price will be lost by price; customers who stay because of value are your true customers.
  4. Remember that any national platform has costs far higher than local startup teams. This is an inherent advantage that others cannot replicate.
  5. Treat the online store like a physical store, because your competitors are overly bloated; they will never outlive you or outdo you. 6. Data model for the break-even point of social e-commerce The following is a model designed based on data from the cities I operate in: Procurement Department 1. Never use a to B wholesale mindset for to C product procurement Originally, distributors served B-end customers. Stores selected products, stored them, and slowly sold them. The store owner was not responsible for whether they sold or not. If they didn't sell, they could return them. Now serving C-end customers, you cannot waste any limited window resource. You cannot let consumers feel that the platform's products are irrelevant to them, nor can you let customers feel that the platform's products are garbage. Ensure the quality of platform products. Our purpose is to help customers select satisfactory products and ensure that the products have a certain scale of sales. So the procurement department must search everywhere for suitable products, find stable and reliable suppliers, and ensure that after products are listed and sold, they can be supplied to the warehouse in time. Here, I strongly oppose: at the beginning, when product sales are uncertain, using a "buy first, sell later" approach. This will cause the warehouse to accumulate unlimited inventory. It's better to accept a slightly higher purchase price than to hold inventory. For stable and good-selling products, you can appropriately store a small amount of inventory. 2. How to achieve zero-cost inventory in social e-commerce? Appropriate product selection method: Find suitable products to list, negotiate cooperation rules with suppliers, and after confirming the cooperation mechanism, provide photos for pre-sale. Based on group buying order volume, notify suppliers to deliver to the warehouse at the agreed time. When negotiating with suppliers, it's best to receive a deposit and settlement cycle. If suppliers have problems, you can effectively fine them and not be too passive. Our fresh products such as "vegetables, fruits, seafood, and meat" are stocked based on sales volume. For fragile or non-standard products, I require suppliers to prepare 10% more to compensate for shortages. Never substitute inferior goods or short-weight customers. For products where standard weight is hard to control, mark "+ -" grams when selling to avoid unnecessary disputes. 3. Should non-standard products be purchased by your own people or contracted out by category? On this issue, I was also very conflicted. Having your own people purchase is particularly hard, and it doesn't guarantee 100% quality. Contracting seems to throw all problems to others, but contractors are profit-driven. When quality is similar, they often substitute inferior goods, ultimately hurting customers. Put yourself in the customer's shoes: if you buy fruit at a stall, would you allow the owner to pack it randomly? You would definitely pick items that look good, with bright colors and good taste. On the platform, customers have no choice at all; they trust us to choose the best products for them. In fact, every online purchase by a customer is a risk. Think about how important it is to purchase quality products. Retaining a customer is not easy, but losing one is instantaneous. So my approach is: except for large enterprises that can achieve excellent standardization, all non-standard product suppliers cannot be fully trusted, nor can you take shortcuts. You must strictly inspect each batch in front of the supplier, making them clearly aware of the platform's product selection standards. This is also a test and training for suppliers. If they pass a month of testing, you can discuss payment terms and reward/penalty clauses. Here, I especially remind about many fruit products. Often batches differ, sizes differ, and suppliers or procurement fail to notify operations in time, resulting in inconsistency between the sold product specifications and actual specifications. For example: pomelo 4 jin/piece, sold at 6 yuan/piece, but the new fruit on the market is 5 jin/piece, so you have to take a loss. If it's just a small loss, it's okay, but what if the market only has 3 jin/piece? So you must maintain close daily communication with your non-standard product suppliers, communicating about "sweetness/sourness, size specifications, and reserved inventory." Many suppliers are salespeople who only consider whether they can close a supply deal. As for quality and delivery, they only talk a good game. The actual results are unknown. If you frequently experiment on customers with uncertain products, you'll soon go out of business. I've suffered greatly in this regard. A supplier provided me with seafood airlifted from the sea to Chengdu, saying they cooperated with so-and-so, and the products were fresh and delicious. I'm a layman, and I believed them. The operations department also introduced the product well in the group leader group, and customer expectations were very high. Pre-sales were good, but when the products reached customers, we all exploded. High-quality customers were extremely disappointed with our platform. Even if we tried every means to remedy it, it was useless. Warehousing and Distribution Department 1. How to plan the timeliness of community group buying warehousing and distribution? 2. Quality control is one of the three core lifelines of community group buying Quality control issues are mainly found in five links. If problems occur, how can we still have a chance to remedy them? Customer Service Department 1. What types of problems usually appear in the group leader group?

When will the goods arrive? Or minor friction with the delivery driver; customer complaints due to missing items; customer complaints due to product quality issues; discrepancy between actual product and pictures, significant differences; too few products, insufficient variety, no new products, no promotions; difficulty attracting people, lack of interaction, poor sales performance, can't do it; others' groups have such good products, so cheap, and big promotions; seeing others do well, selling thousands a day, losing confidence; family matters requiring leave. 2. How to solve various problems in the group leader group? First, there must be excellent role models in the group, so that the poor can learn from the good and see hope.

Second, there should be "plants" in the group. When problems arise that are hard to solve, but you don't want them to spread, you need some positive energy to dilute conflicts and flood the screen.

If truly sensitive issues arise, you should first communicate one-on-one privately to stop the problem.

If a large-scale problem occurs, admit the mistake immediately and actively solve it quickly. If money can solve it, it's a small problem. Give customer service enough authority to handle problems. The faster the fire is extinguished, the smaller the loss.

Record it down; the same mistake cannot be made twice.

Set up more activity reward mechanisms and elimination mechanisms in the group leader group, so that those who do well get recognition and rewards. Those who consistently perform poorly should have their groups changed or closed; otherwise, it's a waste of company resources. 3. How to solve various complaints in the community group? Solving community group problems is similar to solving group leader group problems. You need a few more "plants" to keep negative voices in the group as low as possible. Solve problems privately, then use the plants to change the topic and discuss positive content, giving the group leader enough time to communicate effectively with the parties involved. Generally, as long as the group leader actively solves problems, there are basically no unsolvable problems. What basic conditions do regional distributors need to have for community group buying? Once the tip is adopted, a payment of 400-2000 yuan will be made.