---
title: "How Can Distributors Master Community Group Buying?"
description: "Community group buying has become popular, offering a relatively simple and clear business logic that makes the O2O model more reasonable and feasible. However, among the influx of new players, how can distributors find a more suitable pace and avoid detours? This article explores how distributors can leverage this new model by breaking down four key questions: what community group buying is, its value and significance for distributors, the advantages and disadvantages, and key points to consider."
author: "王军"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-11-16"
language: "en"
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---

# How Can Distributors Master Community Group Buying?

> Community group buying has become popular, offering a relatively simple and clear business logic that makes the O2O model more reasonable and feasible. However, among the influx of new players, how can distributors find a more suitable pace and avoid detours? This article explores how distributors can leverage this new model by breaking down four key questions: what community group buying is, its value and significance for distributors, the advantages and disadvantages, and key points to consider.

Community group buying has become popular, offering a relatively simple and clear business logic that makes the O2O model more reasonable and feasible. However, among the influx of new players, how can distributors find a more suitable pace and avoid detours? Just as FMCG B2B has entered the second half, everyone is still exploring and refining.

Today, I want to share a special topic related to community e-commerce: how distributor friends can leverage this new model. I will attempt to find some answers by breaking down the following four questions:

> 1. What is community group buying?
>
> 2. The value and significance of distributors doing community group buying
>
> 3. The advantages and disadvantages of distributors doing community group buying
>
> 4. Key points distributors need to pay attention to when doing community group buying

**This will help us see whether community group buying is a good fit for distributors or just another pitfall.**

First, let me state the conclusion: Community e-commerce is a model that every distributor, especially new distributors who are suffering from the payment terms of retail terminals, must pay close attention to. It is a very important means and tool for new distributors to build their own ecosystem.

Q
**First question:**
**What is community group buying?**
A
Through group leaders, WeChat groups are established to acquire and operate community consumers. Then, WeChat mini-programs are used for product pre-sales, and delivery is completed through self-pickup points.

Q
**Second question:**
**Why should distributors do community group buying?**
**—Is community group buying really a good business for distributors?**
A
**1. Through community group buying, increase the income of the small stores you serve, making the stores more sticky and improving your customer relationship!**

Let's look at the prerequisites for achieving this goal:
A: You need to have enough small store users for sales services, which will greatly accelerate your community group buying from 0 to 1. Because the small store owner is the group leader, and the small store is the self-pickup point.
B: You need a complete set of scripts to stimulate the group leader's recognition and enthusiasm. Since the closest contact path between distributors and small stores is through salespeople, an excellent salesperson needs the most influential standard scripts to promote and activate store owners.

B2B solves the efficiency and cost optimization of small store stocking, while community group buying brings new transaction increments. The combination of the two can better stick to small stores.

**2. Through community group buying, bring more product sales and profits.**

Here we need to talk about categories. In the early stages of community group buying, most platforms enter users through high-frequency fresh produce.

Is fresh produce the best choice?
The answer is yes.
Because it is pre-sale, the loss of fresh produce is minimized. Using fresh produce as a door opener, activating users with high frequency, and driving medium-frequency, especially low-frequency high-margin products, has been successfully verified.

The necessary condition here is the establishment of a fresh produce supply chain, product selection, and quality control.

**3. Through community group buying, solve the promotion of short-dated products.**

In the past, we had many helpless moments with short-dated product promotions. Now, we finally have the opportunity to reach consumers directly. Through price incentives, we can clearly tell consumers that although these are short-dated products, the discounts are very significant! Examples tell us that consumers with such needs will indeed pay for such products. Of course, we are talking about short-dated, not expired. Through community group buying, selling in whole pieces and large packages becomes a new channel for clearing short-dated products.

**4. Through community group buying, help manufacturers promote new products.**

Manufacturers' new products are the hardest to sell. Community group buying brings us new traffic and channels. Through promotional models like buy-one-get-one, we put new products into consumers' hands, letting the product quality speak for itself. Excellent new products, after consumer experience, will definitely have the opportunity to trigger repeat purchase demand! Therefore, we have a new channel to verify whether a new product is recognized by consumers, whether it is worth heavy investment as an agency, and to create this season's profit breakthrough. Plan before acting, and let consumers help you make choices.

**Four tangible benefits for distributors doing community group buying:**
> 1. Increase the income of the small stores you serve, making the stores more sticky and improving customer relationships
>
> 2. Increase sales and expand categories
>
> 3. Add a sales channel for short-dated products
>
> 4. Add a sales channel for new product promotions

**Now, let's talk about the underlying value beneath the surface:**
1. Obtain consumer user data, especially data around a residential community, and have a group that you can interact with anytime. Through data analysis, master the community user profile and consumption habits.
2. Through precise user profiles, reverse-engineer the category analysis of the community's stores, provide some data support for improving the store's product structure, and provide data references for distributors who want to further integrate and build their own small stores.
3. Continuously expand new categories, continuously break through product understanding, and gradually connect more virtual products and services.
4. Through the establishment of a fresh produce supply chain, strengthen and improve local city distribution capabilities, and build a stronger underlying moat.

**In one sentence: This seems like a traffic game, but in reality, it is about reconstructing or reshaping 'people/place/product' through community group buying, achieving an upgrade from people finding products to products finding people, and combining online and offline to reach end consumers, creating new retail channels while building a solid supply chain system.**

**Combining virtual and real, the future is promising. But to run this business model successfully, what awaits distributors is not the so-called 'low threshold' windfall; it must be a real business.**

Q
**Third question:**
**What are the advantages and disadvantages for distributors doing community group buying?**
A
**Advantages:**
1. Have natural small store customers and customer relationships, making it easy to quickly acquire seed users in the early stage.
2. Understand products and have sensitivity to product trends.
3. Have a supply chain system and city distribution capabilities.

**Disadvantages:**
1. Users and resources are concentrated in one or two cities, lacking financing capabilities.
2. Distributors mainly focused on FMCG lack experience in fresh produce supply chain.
3. Lack of internet e-commerce operations personnel.

The advantages and disadvantages are very distinct; it depends on how to find the core competitiveness and entry point.

Q
**Fourth question:**
**What are the key points distributors need to pay attention to when doing community group buying?**
A
Before doing community group buying, you must know the following:

**1. Need a system:**
Although it is said that you can just create a group, find a free micro mall, and send a few product links to start, in fact, you need a WeChat mini-program, combined with your B2B ordering platform, ERP, and warehouse WMS system. That is, this community group buying is actually a part of your entire sales management channel. Previously, sales were directed at small stores; now, through small stores, you acquire consumers. The information system needs to fully cover this process for efficient management, standardized replication, and data analysis.

**2. About multi-level distribution:**
Currently, WeChat officially supports up to two-level distribution. That is, group leader profit sharing is OK, but more levels would cross the red line. This is not the early days of WeChat business; as long as you follow national regulations, there is no problem.

**3. About 'group buying':**
We see that many local community group buying platforms, in order to quickly activate users, basically allow one person to form a group without actual group buying. This is not right. You must let consumers interact and share. Although we are limited by LBS self-pickup points, we still need to trigger consumer sharing and interaction. This is the essential action based on WeChat communities. Remember this. Pinduoduo has already played the sharing activation method very well, so I won't elaborate here.

**4. Product combination:**
Fully utilize the sales model of product combinations: use hot products to drive regular products; use traffic products to drive new products; make consumers feel more value while cleverly increasing gross margin and new product promotion capabilities.

**5. Point density:**
The value of points is extremely important, but for operations, what is more important is that points form coverage density to solve the best efficiency of the supply chain. This is the first point.
The second is that single-city coverage should be comprehensive, so that communities can share with each other, achieving true city-wide user group buying and self-pickup services. This is the standard complete form of a community group buying platform taking over a city.

**6. Operations and customer relationships:**
The core of a community is operations. It should be non-intrusive and warm. The group owner is responsible for maintaining order, promoting products, and neighborhood mutual aid, which requires great effort. This is the ideal state; in reality, the management of various groups varies. To solve this problem, there must be methods and techniques:
> A: Train group leaders with standard scripts and methods
>
> B: Early-stage professionals enter groups for case-based coaching
>
> C: Use AI chatbots for auxiliary management
>
> D: Set up professional departments and personnel for operational supervision.
>
> (Through actual operational cases, we can see that deeply operated groups have significantly higher sales than groups left unattended)

**7. Warehouse and distribution supply chain:**
The existing distributor city distribution warehouse coverage radius, cold chain, and sorting logic all need to be considered for upgrade plans. The costs of receiving, sorting, packaging, and delivery must be controlled within 5 points to have core competitiveness. This requires information system empowerment.

**8. Group size/unit price/operational lifeline:**
This is a very serious topic. Recently, there have been reports that the first wave of community e-commerce platform closures has begun. According to my understanding, it is not an isolated case. The reasons are nothing more than the imbalance between costs and benefits, and the failure to master the correct posture for development.

Let me talk about a few key nodes:
**First, how many people does a group need to support the healthy development of a point?** Generally speaking, look at the number of residents around the point. If there are more than 1,000 fixed residents within 500 meters, it is enough to support a small supermarket with fresh produce. I think a group should have at least 300 people to be appropriate;
**Second, unit price.** The fulcrum supporting this data is comprehensive, from product selection to pricing and group buying base. I just mentioned the important value of 'group buying'. Choosing combinations is key. The core principle is high-frequency driving low-frequency. For example:
Fresh produce as a high-frequency product for traffic and hot products, paired with frozen products and personalized small items, with daily new arrivals, is a scientific method to increase unit price in the early stage. Do not just put three or four vegetable and fruit hot products online directly, because consumers will only look at hot products, making the platform a channel that blindly pursues low prices. Combine high-margin, unbranded, price-insensitive products like small items, which are between gifts and daily non-essentials, suitable for community group buying platforms;
**Third, operational lifeline.**
The break-even point for each point is the foundation. After the incubation period, if a point cannot achieve 500 yuan in sales per day, you must specifically analyze the reasons and find problems in each link. The group leader rebate should not exceed 12%; customer relationships are your best weapon.

**9. Group leader selection—store owners and mothers:** Regarding whether to choose small store owners or mothers as group leaders, each has advantages and disadvantages: Mothers have high operational enthusiasm and invest more time, but they lack standard self-pickup points, and service stability is poor. They are suitable for developing users and operations. Small store owners have physical stores, with absolute advantages in customer acquisition and pre-warehousing, but they often do not invest enough energy in community operations.

Of course, I personally prefer small store owners, because the advantages and value of physical stores as points are irreplaceable. **But this is not important; in the future, everyone around you can be a group leader!** Because self-pickup points will definitely be shared in the future! Service functions will be diversified. Also, because the last 500 meters will have more scientific and advanced solutions in the future!

The above is intended to bring some valuable thinking to new distributors who are transforming and upgrading.

Postscript: Analysis of distributor transformation paths to New Distribution

New distributors will face different directions and paths when thinking about digital transformation. I always believe that the most suitable is the most feasible. Several current hot tracks are very much in line with the operating genes of distributors and have certain innate foundations:
> 1. Traditional distribution upgrades to B2B platforms through informatization
>
> 2. Downward channel exploration, controlling stores through franchise chains and other means: traditional chain convenience + unmanned smart retail.
>
> 3. Penetrating B2C e-commerce: operating community group buying through stores
>
> 4. Transforming into city distribution supply chain services: unified warehousing and shared distribution
>
> 5. Upstream OEM/ODM: forming a commodity customization procurement alliance

**In the current complex economic environment, the curse of 'change is dangerous, not changing is even more dangerous' always exists. Because every attempt and innovation will face the risk of trial and error. But fortunately, we are in the information age, which provides us with extremely efficient communication tools and knowledge acquisition channels—you are not fighting alone!**

**New Distribution, continuously exploring the truth, providing comprehensive service support for distributors' digital transformation!**

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