Introduction: Previously, Feiyu published a post titled "B2B Platforms Have Too Many Pitfalls, Distributors Need a 'Nine Yin Manual'" which sparked discussion among many friends. Some even felt that finally there was an article speaking for distributors and telling them what to do. Here, the author shares his views on this matter. Those who haven't seen that article can click "Read Original" at the end of this post.

I. Digging into the Distributor's Background Before discussing this topic, I need to say some things that might make many distributors uncomfortable:

1. Currently, the so-called networks of most distributors below the third-tier market in China are brought about by branded products. Without branded products, distributors would have no network.

2. The era when distributors could make money by relying on regional overall consumption power improvement, natural market growth, and selling goods with policy support is over, especially this year.

3. Many distributors still hold a fluke mentality and are highly speculative. They think that finding a good brand, or having a big brand bring along several small brands, can increase sales and profits. However, under this model, most distributors' current sales results are: the main brand fails to complete tasks, and small brands cannot sell.

Over the years, I have been on the market and met many distributors. I found that more than 80% of distributors rose by relying on the "opportunity" of representing a certain product and growing with it, earning their first pot of gold. The so-called hard work back then was just physical effort, not real wisdom. They don't have over ten years of operational experience; rather, they have used one experience for over ten years! When they find that their experience no longer works, they start to panic and feel they are about to be revolutionized.

To sum up the reasons: they have many brands but none are strong; the market is large but not deep; they are small local bullies who don't do terminal sales or service, just sell goods to make money. With this model, anyone with capital can take over your product in the local market.

I personally sympathize with Chinese FMCG distributors. They are squeezed by manufacturers and terminals, doing the hard work of porters, earning so little that it's not enough for a family's annual expenses. But business is cold and ruthless; it doesn't guarantee returns just because you put in effort. So in the future, doing business requires not only hard work but also professionalism, operating and managing in a professional way.

II: It Doesn't Matter What Kind of B2B Platform Distributors Use; Improving Their Own Management and Operations Is Fundamental Let's talk about whether distributors should participate in B2B and whether they should invest:

From the overall trend of social development, the division of labor is inevitable. As a distributor, you must clearly recognize your position and value in the entire supply chain.

Distributors should first figure out what they can gain from representing a platform or joining one. If it's profit, that's just the result. What can you actually gain on the platform?

a. Incremental coverage of channel outlets; b. Efficiency improvement and cost reduction from centralized distribution; c. Helping small and medium supermarkets achieve quick ordering and digital management of inventory; d. True data management of terminal information; e. Reducing losses from blind distribution; f. Opportunities for horizontal growth through multi-brand operations;

These are things that most small and medium distributors previously needed to spend high costs and energy to do well.

Another thing to clarify: putting your products on a platform doesn't mean you can cut your staff. You might think you can reduce costs through online ordering, but in fact, you can't cut your staff. Any online platform solves the problem of high-speed information flow, but offline services still need to be done by people. Some might ask: Then why should I go on a B2B platform?

Don't rush. Let me first calculate two accounts for everyone:

1. Cost of vehicle sales: A box truck costs about 350 yuan per day (fuel: 60; personnel wages: 2 people 200; depreciation + insurance + maintenance: 100). This doesn't include warehouse, administrative, water, electricity, and other overhead costs, nor hidden costs like accident risks. If a salesperson goes out and the transaction amount doesn't exceed 5,000 yuan, basically they didn't make money that day. If there are returns, it's basically a total loss.

2. Transaction efficiency: In a day at stores, the actual effective working time (sales negotiation and terminal merchandising) for a salesperson is mostly no more than 3 hours. Where does the rest of the time go? I've counted that a vehicle can complete about 10-20 orders a day. During visits, the time spent on sales negotiation and terminal merchandising is very little; most is spent on the road, loading/unloading, and accounting—non-productive time.

Some might say: My tricycle costs less than 50 yuan a day (depreciation + electricity). If a salesperson sells 1,000 yuan a day, I break even; 2,000, I make money; 3,000, I profit. Those costs you mentioned don't apply to me.

But what I want to say is: If you only sell in the urban area, that's fine. But how far can your tricycle go? How much goods can it carry? How many types of goods? How many people are willing to deliver by tricycle? Aren't you going to do the township market?

Distributors, before consumers buy your product at the terminal, you have to take back expired products, replace defective ones, and manage slow-moving ones. So, before consumers buy, the goods are always yours. All previous steps are costs. For costs, anything that can be cut or compressed should be compressed!

So let's see what costs can be cut or compressed:

As long as it's a link unrelated to the transaction, you can hand it over to more professional people. I've suggested to many distributors:

Quickly contract out your vehicles to second-tier wholesalers or professional delivery personnel. We only need to control two things:

1. The agency rights for products in the local area. 2. The terminal transaction link.

As for warehousing, distribution, etc., if there are more professional people willing to do it, hand it over to them.

And our salespeople should quickly transform their functions, from "selling goods" to "doing terminal merchandising around consumers buying", doing new product distribution, key items, high-margin product promotion, negotiating stock pressure at important time points, and blocking competitors at the terminal.

Without loading/unloading and accounting, and even large circulation products are ordered online naturally, the salesperson's work efficiency and time have greatly improved, thereby enhancing overall terminal work efficiency.

These are things distributors need to do in the future development trend, whether they join B2B platforms or not. But now that there are more professional and efficient models, why not adopt them?

For agents of small and medium brands, platforms bring incremental outlets; for big brands, they bring higher efficiency optimization and thorough division of labor.

Efficiency improvement brings not only cost reduction and profit increase. Just as Ford improved the assembly line, changing America and then the global competitive landscape, distributors changing transaction methods and efficiency through B2B brings not only profit but also a ticket to the future in the Internet era.

If distributors only see the immediate benefits and adopt a trial mindset, it's better not to do it at all.

Some might say: I can do it, but only if I don't have to spend money. I won't do anything that costs money.

Haha, that's fine. You can even not join a platform and just sell on it, or sell on multiple platforms. You can also do the above things well. You can choose a free platform, but I tell you:

1. With a try-and-see attitude, no one can succeed in anything; 2. Any business can fail; don't give up eating for fear of choking; 3. The Internet is unclear to everyone; it's not just distributors investing; platforms may invest even more resources; 4. As I said, free is always the most expensive. If you're free, the platform won't invest resources in your market. You're not a beauty, so why would they chase after you to help and give you money? 5. Market opportunities: if you seize them, you seize them; if not, they pass. Feiyu seized the self-media opportunity and became popular. The self-media dividend has passed; there won't be a second Feiyu in China.

Distributors are not stupid. No one can continue a business that doesn't make money. No one would cooperate with B2B platforms if they don't make money. Since investment carries risk, failure doesn't mean paid platforms are unreliable. The story of "Little Horse Crossing the River" doesn't need to be taught to distributors; they understand.

The competitive environment in the Chinese market is no longer an era of natural growth driven by population and consumption power. Consumption upgrade, economic weakness, and channel dimension reduction and iteration are all problems distributors must face, with no time even to think.

If you don't participate in optimizing your operation model, then wait to be gradually marginalized. Wait for the new generation of distributors born in the 80s, 90s, and 00s to grow up and use Internet tools to revolutionize the old generation. The market environment is always dynamic. Not only distributors and platform companies are moving, but manufacturers are also moving. If you don't keep up with the times, manufacturers will definitely flirt with distributors who have better networks, more capital, and more development momentum.

Having said so much, most distributors may still be unmoved. This is like queuing. Successful distributors facing a huge existing market will be cautious, but new distributors at the tail, when they see a new window, will immediately queue up. Although there are risks, compared to waiting for opportunities, some are willing to try.

B2B has now opened a window. Brother Feiyu says to the queuing distributors: Wait, go after others have bought tickets, or when there's a free ride. I say: Go boldly, don't fear trial and error, iterate quickly, and strive to get this entry ticket. Who do you think is right?

When a new window appears, it's normal to have different voices and mindsets. Incumbent stakeholders and those at the tail have different attitudes toward the new window. Whether to do it or not is up to you.

I think a post-90s distributor @楚潇 in the B-end e-commerce group said it well:

Those who board at the first stop may not be the safest, but they are definitely the first to board.

Finally, my advice to distributors: Since you're going to do B2B platforms, you must do the following:

1. Transform the team's function from selling goods to selling services; 2. Professional management and operations; 3. An open and cooperative mindset; 4. Have the courage to fight with your back to the river and burn your boats.

This public account has a B-end e-commerce distributor exchange group. Interested friends can long-press the QR code below to add the editor to learn about platforms and exchange operational insights:

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