Facing the wave of Internet+, affected distributors clearly know the advantages of the B2B model, but they still adopt a wait-and-see attitude. Zhongke Shangruan, with over a decade of experience in the retail industry, has found that there are many classic cases of successful regional B2B platforms, but there are also many distributors who stand by and watch. They do not lack the ability to integrate resources, but are constrained by their own ideas and fail to realize the power of working together. This is because the success of B2B in regional markets largely depends on regional distributors uniting, cooperating, and sharing resources.
For distributors who want to grow against the tide in the B2B flood, besides adapting to the dynamics, optimizing their own genes, and strengthening their distributor teams, they also need to think and plan in the following three aspects:
1. Competition Among Brands - Competition for Upstream Resources
There are many brands, and the current retail market is seeing overall sales decline. Following the right brand can improve risk resistance to some extent, but it does not guarantee protection against industry trends.
Distributors have four ways to take on agency:
- Choose a major brand to represent;
- Support a second-tier brand;
- Find a brand with high profit margins;
- Create their own OEM brand.
In an era where major brands are experiencing severe sales declines and brands are mixed, it is increasingly difficult to just pick any brand and push it. We (Zhongke Shangruan) have found through exchanges with some large distributors that they rarely look for new brands now, and are very careful in choosing which brands to represent. Some have even stripped away unprofitable products.
Here, we must mention that some distributors' practices are worth learning from. Some of those familiar to us have spontaneously united to form a small purchasing fund. Together, they scout for certain brand products and buy them outright if they look good; or their "small alliance" finds factories to produce goods and they apply their own labels. Then, these distributors use their respective channels to jointly promote. This not only yields high gross margins but also ensures brand control. It is a good option!
At Teacher Zhao Bo's Shanghai conference on the 22nd, in the sharing forum session of "Zhongke Shangruan," we invited senior distributor alliance leaders such as Yan from Tao Daqing to share on-site. There will be many practical cases. If interested, you can learn more.
2. Supply Chain Competition - Point vs. Surface Competition
- Complete product range;
- Fast delivery;
- Low prices;
- Genuine products.
Major national platforms do well in these four aspects. They have daily specials, weekly giveaways, complete product ranges, and fast delivery speeds, all with high-end three-dimensional warehouses and fully robotic picking. Distributors have almost no chance of winning at this level.
Here, let me provide a typical case. In Changsha, we talked with many large distributors in Gaoqiao Market. Very few distributors in Changsha have built their own platforms; it can almost be said none have. Because the shops are branded, and branded shop owners want complete stock and fast delivery when purchasing. No distributor can meet this demand, and they do not control the terminals. Instead, they choose to cooperate with the logistics centers of chain stores!
Nationally, cities like Changsha are rare. If distributors in all prefecture-level cities faced platform competition like that in first-tier cities, the whole country would have fallen long ago. Because the area is too large, internet companies are not fighting a local war. Distributors still have the opportunity to win this battle in regional markets. Therefore, in the increasingly competitive market environment, we advocate "King of the Region" - to unite and build platforms in their own regions.
Let me share a customer story from Xuchang:
As a typical distributor representative, the customer in Xuchang underwent three transformations, each bringing significant improvement:
- First transformation: "Self-operated B2B" - leveraging their own distributor endorsement to increase platform visibility, expand product SKUs, and defeat external platforms.
- Second transformation: "Unified warehousing and distribution" - using the influence of the B2B platform to encourage distributors to place goods in the warehouse. Now, no other distributor in the area dares to operate other platforms.
- Third transformation: "City platform" - uniting city distributors to strengthen the region. They open equity, share stores, share salespeople, and share the platform to develop together.
At Teacher Zhao Bo's Shanghai conference on the 22nd, in the sharing forum session of "Zhongke Shangruan," Zhongke Shangruan invited local operators to share on-site. "Operators," as the second person besides the boss, play the role of "little boss" in the enterprise's development. They are not professional managers; they have followed the boss for many years and have earned deep trust. They are young, have ideas, and have ability, only lacking a platform to show themselves and prove themselves.
3. Competition in To C Capability - The Battle for the City's Foundation
1. Build Your Own Brand Chain
Many distributors have tried to open chain stores, but the number of stores they operate is small, and even fewer are profitable. In our view, being a distributor and running a chain store are two different industries that require different industry experience and accumulation, and the team composition is also different.
We suggest that distributors with ideas can cooperate with professional convenience store management teams. A lean team working together to build a regional chain convenience store system often yields twice the results with half the effort.
In addition, at Teacher Zhao Bo's Shanghai conference on the 22nd, in the sharing forum session of "Zhongke Shangruan," Zhongke Shangruan also invited chain experts with over a decade of experience in the regional chain industry to share store opening experience and how to share it.
2. Build Your Own Online Mall
Distributors have a relatively poor understanding of the Internet and are not interested in the current popular online tactics. But in this Internet+ era, "Internet+ means endless resources and infinite possibilities." If we do not keep up, others will use this shortcoming to attack us. Not to mention that social e-commerce is so hot today. Seeing the overall market situation, we are also trying to guide distributors to transform in this direction. In the later stages of development, we will publish more real-time marketing data through this platform. This is a good direction.
Still at Teacher Zhao Bo's conference on the 22nd, our secret weapon will be released.
3. Build Your Own Warehouse Store
If the supply chain is compared to a pyramid, then warehousing and logistics must be the base. The speed of goods storage and distribution determines the fate of the store. Distributors know this well. Therefore, building your own warehouse store undoubtedly saves operating costs and is unquestionable. In the domestic market, many distributors are trying this, and there are many successful cases.
Considering the issues at the product sales level, the sales method of self-built warehouse stores has a wholesale nature, mainly concentrated during holidays! It achieves the lowest cost and maximizes benefits more comprehensively and thoroughly!
Retail industry bosses must clearly recognize that to empower the entire supply chain, integrate resources, and adapt to new retail development trends, building a B2B platform is one of the important ways.
In this process, transforming channel models through thinking, building a supply chain-centered system that links distributors and terminal stores to improve marketing efficiency and provide full-chain information services, distributors also need to take one step at a time and work steadily, because there is no shortcut on this road.
In short, in the Internet environment, establishing shared warehousing platforms, shared logistics platforms, and shared service platforms is an inevitable choice for FMCG companies. Platform transformation is both a challenge and an opportunity for distributor companies. Adapt to market changes, choose not to be a bystander, and perhaps you will be the next trendsetter!
At this practical summit forum, you will gain:
- Face-to-face exchanges with industry experts and leaders
- Practical dry goods on distributor management and operations for distributors, brand owners, and circulation enterprises
- Digital transformation solutions
- Innovation in platformization and operations
- The winning weapon for distributor decision-makers!
In 2018, let FMCG companies step out of traditional thinking and start a new journey!
On August 22, we are waiting for you in Shanghai!
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