How Retail Tong Should Be Played

Whether e-commerce or offline, any business model must first have its commercial logic designed reasonably. That is, the inevitability, necessity, and key points of the business must be designed well. Without reasonable commercial logic to support it, a business model will inevitably be difficult to sustain and will eventually collapse.

Retail Tong and similar platforms, using e-commerce wholesale as a means, intend to leverage the efficiency value of the internet, build open platforms for many merchants and manufacturers, and provide matching services for 5 million B-end small shops.

Among these, there are three key points:

Platform efficiency: Including the platform's operational efficiency, logistics efficiency, and ecosystem efficiency;

Integration capability of merchants and manufacturers: As a trading platform, it is very important to include capable merchants and manufacturers with brand influence. This can better attract more B-end small shops to trade on the platform. To a certain extent, big brands represent market power and have a very important impact on small shops.

Stable, valuable, and sales-effective market network: This is the most critical point and the core of whether the platform can develop healthily and sustainably. In the current market environment, from a certain perspective, there is an oversupply of goods and a buyer's market. What the market lacks is not goods, but valuable sales channels.

Although most manufacturers are currently in a very painful transformation period, gradually shifting from relying solely on offline dealer channels to integrating online and offline development, many forward-looking manufacturers have clearly seen the rapid development trend of online channels and the value of the B2B model in the future transformation of FMCG channels.

For example, on December 16, JD's New通路 (New Path) business unit stated that it had fully built a team with supply chain and ground service capabilities, and launched a one-stop B2B ordering platform "JD掌柜宝" (JD Manager Bao) for small and medium stores nationwide. Currently, the products on 掌柜宝 are divided into categories such as food, beverages and instant drinks, alcoholic drinks, personal care, maternal and baby, office supplies, home furnishing and improvement, with a focus on food. The top three categories by proportion: food accounts for about 43%, followed by beverages and instant drinks at about 10.4%, and alcoholic drinks at about 8.2%. Dozens of brand manufacturers such as Coca-Cola and P&G have joined the platform.

Under these circumstances, the principles for manufacturers to choose a platform will inevitably focus on two final points: the platform's market scale and its market output capability.

Looking ahead, in 2017, B2B platforms will enter a period of fierce competition and will inevitably enter a survival-of-the-fittest elimination phase. Market scale and the closeness of the link between the platform and B-end small shops will surely become the core competitiveness of platform enterprises. Especially the closeness of the link between the platform and small shops is the most critical. Some platforms that have a certain market scale but lack close links with small shops, fail to form a stable market network, and have low market sales output capability will lose their competitive advantage.

How to form close links with small shops, establish a stable customer network, and build a network system with high sales output capability? The key is to grasp the core needs of small shops, effectively solve their core operational problems, help them improve their operational capabilities, and ultimately form a high degree of association, trust, and dependence.

Current situation of market small shops:

Lack of business thinking and operational skills. Most small shop owners open their shops but do not actually know how to operate. They sit and wait for goods, do not know how to select products, do not know how to manage the store, do not know how to promote, and sell whatever they can. Most are like this.
Do not know how to manage the store. They have no concept of layout, traffic flow design, or display. Some do not even keep accounts. There is no data on varieties, inventory, etc.
Therefore, under such circumstances, many small shops urgently need to improve their management and operational skills, and the owners' desire is very strong. Currently, WeChat training classes for small shops are very popular, which fully demonstrates this point.

Current environment of services for small shops: Manufacturers: They cannot serve all small shops. At most, they focus on their own products and do not pay attention to the overall operation of the store. Distributors: They generally only focus on replenishment and delivery of their own products and do not have the ability to pay attention to the overall operation of the store. Online e-commerce wholesale: At present, it is basically cooperation at the product level based on the existing management of the store. Such cooperation is of no value. If the store's operational capability and sales capability are not fundamentally improved, the cooperation established is very unreliable. Imagine, if the store does not know how to select products, how can it choose your products? If it has always had very low sales capability, how can it sell your products well? If you do not establish more connections with the store and gain more trust, how can it choose and trust your products more?

Ideas for integrating market small shops that should be established: Integrating market small shops is a complex systematic project that must be planned as a whole, carried out step by step, considered comprehensively, and planned for the long term, gradually building a valuable market network system.

Rectify stores: First, based on the actual situation of different stores, identify key problems, provide rectification suggestions, and improve the store's operational skills and capabilities in a short time, so that small shop owners can quickly feel the value and power of professional management.

Rectify products: Plan as a whole, guide and adjust the store's category management, provide suitable product solutions for different stores, help stores find suitable categories and optimally priced products, comprehensively and effectively improve the store's product management, and lay the foundation for better business improvement.

Provide continuous training, guidance, and control: Establish a mechanism to help store operators continuously improve their operational capabilities. This can be done through WeChat groups, providing professional guidance and regular training, which will also enhance effective connections with small shops. Help stores operate healthily and sustainably, establish more connections with stores, reflect the platform's value, and build more trust.

Outsource some back-office functions: Stores often have repetitive and tedious daily operations. These tasks can be integrated through a back-office information system to improve efficiency and accuracy. For example, category management and replenishment reminders can simplify store work, make stores dependent on the platform, and thus form actual control over the stores.

In specific implementation, the following steps can be taken:

Appropriate investment: Small shop owners are very practical. To gain their trust first, you must give them some sweeteners. Appropriate investment is necessary. For example, store signs, cash registers, back-office systems, etc. These can also be integrated. Of course, once the scale grows, fees can be charged.
Introduce operational techniques to quickly improve store operational capabilities. Let stores feel the contribution of technology to sales growth as soon as possible.
Integrate product resources and introduce products with more reasonable categories and suitable prices into stores.
Outsource some back-office functions, such as category management and replenishment, to simplify store work and make stores dependent, forming a stable cooperative relationship.
Establish corresponding training, assessment, guidance, and control mechanisms to maintain close contact with stores and help them continuously improve their management and operations.

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