---
title: "Distributors Must Follow These 4 Iron Rules to Avoid Transformation Traps!"
description: "Based on interviews with distributors at the Chengdu Sugar and Wine Fair, this article addresses their confusion about B2B e-commerce channel restructuring and provides a methodology for safe and stable internet transformation, emphasizing four key principles: staying true to one's core business, cost awareness, user-centric thinking, and sharing mindset."
author: "寇尚伟"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-04-16"
language: "en"
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# Distributors Must Follow These 4 Iron Rules to Avoid Transformation Traps!

> Based on interviews with distributors at the Chengdu Sugar and Wine Fair, this article addresses their confusion about B2B e-commerce channel restructuring and provides a methodology for safe and stable internet transformation, emphasizing four key principles: staying true to one's core business, cost awareness, user-centric thinking, and sharing mindset.

Introduction
Recently, during the Chengdu Sugar and Wine Fair, I visited a number of distributors and felt their widespread confusion, which mainly stems from the channel restructuring brought by B2B e-commerce. They suddenly don't know which way to go. More specifically, what confuses them is not whether to embrace the internet, but how to do so smoothly and safely.
"Not transforming means waiting to die; transforming means seeking death" is the current concern of most distributors. There are too many examples of traditional industries dying during transformation. After all, the internet is an unknown field for them, and a careless move could cost them everything. They lack methodological guidance on where and how to transform. I previously wrote an article analyzing six directions for distributor internet transformation: "terminalization, servitization, platformization, symbiosis, alliance, and direct sales." Interested readers can refer back to it; here I will focus on the "how to transform" issue.
Through conversations with some distributors who have successfully transformed, I found they share the following commonalities, which can serve as methodological guidance for distributor internet transformation.
1. Stay True to Your Core Business
This is the prerequisite and the most important point. No matter how you transform, it should be a rearrangement based on your original advantageous units. Deviating from this direction will lead to certain failure. I've learned that many distributors and even traditional enterprises often mythologize or demonize the internet, thinking it's a universal tool that can infinitely extend their business. For example, a beverage distributor might expand into alcohol, food, or even O2O. This is clearly misled by cross-industry thinking. Cross-industry is not about randomly adding internet elements, but about leveraging the internet to improve resource matching efficiency and reduce costs while staying true to your core business.
For instance, Che Bianli, which I interviewed, transformed into a third-party service provider based on its service capabilities in the electric vehicle industry. Wan Shang Gou transformed into a platform provider based on its logistics capabilities. Mr. Liu of Zhong Tiao Foods leveraged his advantage as president of the China Condiment Distributors Chamber of Commerce to transform into a brand owner. These successful cases strictly adhere to this principle.
2. Cost Awareness
What is the greatest value the internet as a tool brings to traditional industries? I believe it improves the matching efficiency of information and resources, achieving efficiency and cost reduction. Therefore, distributors' internet transformation should use this as a benchmark to measure whether the direction is correct. Specifically, compared to before the transformation, has the operating cost decreased or increased? If this goal is not achieved, the direction is wrong. Last winter was called the "O2O winter," and a large number of O2O startups died. The main reason was the lack of cost awareness. They used subsidy wars and heavy services to poach offline users, resulting in higher costs than traditional methods. In the end, they found users had no loyalty and fled once subsidies stopped. This cost-unconscious approach is something distributors should resolutely avoid. Cost orientation is the most intuitive way to judge the merits of a business model.
3. User-Centric Thinking
Since the second half of last year, a number of B2B e-commerce platforms have emerged in China, along with various transformation temptations, leaving distributors dazzled and unsure how to choose. Actually, it's simple: just ask yourself whether this platform or model creates value for your ultimate users. Who are distributors' ultimate users? Retailers, of course. A distributor's competitiveness is reflected in its service capability to terminals. If joining a platform not only fails to add service value but also brings extra burden to retailers, making them unhappy (in internet parlance, "poor user experience"), then such a platform or transformation approach can basically be passed over.
Some distinguish internet-era business thinking as user thinking (users use the product but may not pay) versus customer thinking (customers pay but may not use). In my view, this is a bit of a concept game. Regardless of the era, users are always paramount. Business capability is reflected in user service capability, and user service is realized through products.
4. Sharing Mindset
This point is also crucial. The industrial revolution improved production efficiency through scale and standardization, while the information revolution improves the matching efficiency of resources and information through information flow. Therefore, sharing mindset is the most important business thinking of this era, as proven by the success of Uber and Didi Chuxing. For distributors to embrace the internet, the most important thing is to embrace the sharing economy. Individual distributors exist in a distributed manner, and through sharing mindset, they can aggregate to generate enormous energy and growth space.
The essence of sharing mindset is the free matching of information and resources, with the ultimate goal of improving resource utilization and reducing waste in traditional production methods. For example, through a sharing platform, distributors can achieve centralized procurement, unified purchasing, unified storage, and unified sales, significantly reducing costs. In other words, previously distributors fought independently; now they are integrated through a platform, allowing resources and information to be exchanged and complemented, improving the previous vicious competition.
Another implication of sharing mindset is to tell distributors that the era of the bright moon alone has ended. The survival rule in the internet era is a galaxy of stars. You must establish a partner consciousness; there's no need to do everything yourself. Future promising business models will definitely be lightweight and crowdsourced. Distributor transformation is the same: just stay true to your core business and use internet means to integrate and graft external resources. Building your own platform or logistics will only exhaust and drag you down.
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