E-commerce prices are so low that distributors can't understand them
“A product I pay 72 yuan for is sold on an e-commerce platform for 67 yuan, not even including shipping.”
“For a certain snack brand, our purchase price is over 5 yuan per unit, retail sells for 8-10 yuan, but after platform subsidies, a single pack is only 4 yuan or so. Store owners directly show our sales reps the purchase page.”
Recently, I sat down with a few distributor friends to talk about e-commerce. The strongest feeling was that online prices are sometimes so low they're hard to comprehend.
Some products' final online prices are already lower than the normal wholesale price for offline distributors. Distributors buy at the manufacturer's supply price, operate according to regional policies, and provide delivery, returns, and service as required by terminal customers. But when consumers and stores open their phones, they see that no amount of service can offset such a huge price gap.
“Normally, as a distributor, our payment price is already low, but on the platform, someone sells it even cheaper than our payment price. And that's not even counting shipping, carton costs, labor, and after-sales.”
This leaves many distributors feeling powerless when facing online e-commerce.
Stores ask: “Why is it cheaper online than what you charge me?” Consumers also think: “Is offline overpriced?”
In the past, distributors could build trust through regional presence, delivery, service, and relationships, but now a single platform screenshot can shatter that trust.
Why are e-commerce prices so cheap?
Many people see low e-commerce prices and assume it's because platforms subsidize them, bringing overall prices down.
But that's only one factor, because platform subsidies are limited. The root cause of many low-priced goods is actually a problem in the entire channel sales system.
One important reason is that manufacturers' price control hasn't kept up.
In the past, manufacturers' core market was offline, which was relatively easy to control. With regional divisions, each region's distributors were relatively fixed, and as long as headquarters enforced strong control and strictly prevented cross-region selling and price chaos, large-scale price collapse was unlikely.
Even if some cross-region selling occurred, it wasn't hard to trace via box codes or bottle codes. Moreover, most distributors are deeply rooted in local markets; if outside goods came in, they could track them quickly and report upward.
But on e-commerce platforms, goods are shipped nationwide from all over the country. As long as one merchant sells at a low price, the price quickly gets amplified.
Especially for high-volume, best-selling products that already sell well offline and have high consumer awareness, once the price drops, volume easily follows.
Low online prices usually fall into two categories.
The first is brand-owned e-commerce teams that have sales KPIs, plus promotions like 618 and Double 11, signing top livestreamers, and stacking various mechanisms, naturally driving prices down.
Of course, most brands have some price control and set a guide price online, requiring not to go below a certain level.
But platforms have too many tricks: spec changes, bundle changes, activity subsidies, coupon stacking. Although there's no direct low price, the consumer's final out-of-pocket price is very low.
So, brand e-commerce teams must have a professional price audit mechanism to avoid problems from the internal price structure.
The second and most common scenario is many distributors selling at low prices to complete tasks.
“After the manufacturer sets sales targets, if you can't meet them, you might lose subsequent quarterly rebates, annual rebates, and expense reimbursements.”
“For example, if the quarterly sales target is 10 million yuan, completing it gives a 5% rebate. If you don't find a way to complete the task, you won't get that 500,000 yuan rebate. The goods are already in stock, offline can't absorb them, so the only option is to dump them online.”
One distributor friend put it bluntly: “We opened a store on an e-commerce platform, and order volume is huge—at peak times over 6,000 orders a day—but we're completely losing money. First, prices are low; second, shipping, cartons, labor, and after-sales all cost money. The purpose is just to meet the manufacturer's sales targets.”
Moreover, distributors selling at low prices online are hard for manufacturers to control. A distributor told me there are many ways to avoid detection, such as “buy n items, ship n+1 items,” where customers communicate directly with customer service and use mis-shipment to send extra items. This doesn't violate platform rules, but the unit price drops.
So, low e-commerce prices in FMCG are the result, but the driving factors behind them aren't just platforms; they're also problems in the entire sales system.
In the traditional sales system, manufacturers typically set annual growth targets, and the pressure is passed down to distributors. But in today's environment, it's already hard for distributors to maintain existing volume without decline. For tasks they can't complete, they can only dispose of goods at low prices.
This forms a vicious cycle: manufacturers want growth, distributors need to complete tasks, and e-commerce needs low-priced goods to attract traffic. In the end, all the pressure falls on prices.
Online low prices are now hitting offline business in reverse
“If low prices were only seen by consumers, it wouldn't be a big deal. The problem is that many small stores now use e-commerce as a price comparison platform,” shared a beverage distributor.
In the past, distributors supplying stores also faced price comparisons, but they were basically within the local market, or on some large B2b platforms, where price differences weren't huge. With relationships and service, they could convince store owners.
But now it's different.
Store business is also tough. Snack stores, discount stores, and convenience stores are everywhere, stealing business fiercely.
At this point, relationships don't matter much; any price difference means more room to survive. When sales reps visit stores, owners open various apps—traditional e-commerce platforms, B2b platforms—compare prices first, then talk business.
Even if the low price comes from outside goods without offline service or fast delivery, it still becomes the basis for stores to negotiate with distributors.
“Online sells at this price, why are you charging me more?” This is a real conversation many sales reps have with customers.
It's hard to respond to that.
Delivery, credit terms, returns, relationships, display, promotions, after-sales, rush delivery—distributors don't just deliver goods; they also maintain and serve stores.
But in the face of low platform prices, these routine services are easily overlooked by stores. Stores see a lower price, and no matter how much distributors explain, customers feel they're paying more by buying from you.
This is the most damaging part of online price chaos: it changes offline customers' perception of prices.
In the past, stores judged whether a supply price was reasonable based on local market conditions; now they might judge based on a screenshot of a platform order price.
Once this perception forms, it's terrifying.
If distributors don't lower prices, customers think they're expensive; if they follow the price cuts, their gross margins disappear. Worse, some products still have normal profit margins offline, but because online prices are persistently low, stores are unwilling to restock at the original price.
For brands, this impact is equally dangerous.
After consumers see low prices online, they gradually form a new price perception. A product that could sell at a normal price offline, after long-term low online prices, consumers will think it should be that cheap. Over time, it becomes increasingly difficult for brands to pull offline prices back up.
This is why many distributors now particularly resent online price chaos. It's not that they reject e-commerce, but that low online prices are squeezing the already thin offline profits.
So, what online low prices truly erode is not just distributors' business, but the entire offline price system.
Store trust is weakened, channel profits are compressed, brand price perception is dragged down, and the value distributors built through regional service, terminal maintenance, and local delivery is continuously diluted by a single low-price screenshot.