During visits with distributors across the country in 2017, the New Distribution team found that almost all distributors shared a common feeling: business has been tough in the past two years. A distributor friend with annual sales of around 50 million yuan in food and beverages told New Distribution: The bigger the business, the less money it makes. As regulations tighten, labor costs rise. Everyone talks about B2B, but they don't know how to start or how much it can help their business. In the past, working harder and doing more tiring work could indeed earn some money, but manufacturers' tasks increase year by year while cost investments decline, leading to fines for unmet tasks and huge market investments to complete them, resulting in no profit at year-end. With the internet being so aggressive in the past two years, people have gradually reached a consensus: transformation is certain, but the path is not clear. Should we go up or down? Should we step with the left foot or the right foot first? We are confused and dare not move! After listening to this distributor friend's complaints, I summarize two points: First, costs rise and profits decline; second, the internet trend is changing, manufacturers are changing, and the market is changing, but we don't know how to change. Undoubtedly, when the entire business environment is deteriorating, distributors cannot stay immune. Especially those with transaction scales exceeding tens of millions, they need to accelerate the adjustment of their business models, embrace change, embrace the internet, and learn to use advanced technology and tools to further expand their business. For such large distributors to upgrade, New Distribution believes the best way at this stage is still local logistics services + B2B e-commerce. Today, New Distribution shares with distributor friends some specific ideas for transformation and upgrading: Warehousing and distribution as a service: Unified warehousing and distribution, establishing a warehousing and distribution platform. Warehousing and logistics are originally the "cost center" of distributors and cannot bring benefits. By jointly establishing a third-party professional warehousing and logistics company through regional distributors, the inventory of distributors can be managed uniformly and operated independently. The purpose of unified warehousing and distribution is not only to reduce logistics costs and improve management efficiency, but also to transform the warehouse from a cost center into a "service center" and "profit center". Business independence: When distributors do unified warehousing and distribution, they must separate it from their agency business because there is a fundamental logic: If you do services (logistics), do not touch transactions (agency). Unified warehousing and distribution and trade agency are two different things. The separation of service flow and business flow ensures that the warehousing and distribution platform can operate as an independent entity, allowing more distributors to enter the warehouse. If you do local logistics and the company also takes on external agency business, then all distributors will worry: Will you cut in? The above are some framework ideas for distributors doing unified warehousing and distribution. The key point is that unified warehousing and distribution is one thing, and trade business is another. Let me reiterate: if you do services, never touch transactions; if you do transactions, you cannot provide services. Some specific operational suggestions: For friends who want to do local logistics, first know that getting distributors to enter the warehouse for joint distribution is a very long process. Moreover, due to the huge business inertia of distributors, try not to do it all at once. Instead, implement it gradually in stages: 1. Unified warehousing: You can first jointly invest with several like-minded distributors to establish a supply chain management company, rent warehouses, introduce professional warehouse management information systems, and first put the shareholders' goods into the warehouse. After operating for a period, gradually bring distributors into the warehouse in batches, stages, with low prices and flexible cooperation methods. 2. Unified distribution: After the goods are in the warehouse, there is no need to hand over logistics immediately. They can first distribute independently for a period, and after they adjust their management and distribution models, then gradually move to joint distribution. 3. Transaction digitalization: The premise of transaction digitalization is not as simple as putting a B2B system to extract commissions. In fact, you cannot extract transaction commissions. Under the local logistics system, B2B is just an ordering tool. It doesn't matter to distributors what form orders take, but digitalization is significant for operators. Your warehouse receipt pledge, data pledge, and other supply chain financial products require online transactions to be realized. The problem is that if you have not created incremental value for distributors, do not extract any transaction commissions. Moreover, even if you do, you will soon be "flown orders" (bypassed). So instead, you might as well charge a symbolic fee or no fee, telling distributors that we only provide incremental services. How to achieve transaction digitalization? Consider cooperating with local banks to provide POS terminals to small shops. Based on the transaction flow of small shop POS, provide financial credit to small shops, allowing them to "interest-free" borrow from banks to order from the platform. When online orders gradually increase and transaction data becomes richer, banks can provide low-interest data pledge loans based on B2B transaction flow data, alleviating distributors' capital pressure. But the core behind this is actually to get distributors' goods into the warehouse and realize warehouse receipt pledge. 4: Encourage distributors to take on more products and let ambitious and capable old employees become business partners: Many distributors, after handing over warehousing and logistics, will have more energy and time to do market and product development. If some capable salespeople are ambitious and willing to start their own businesses, let them become "partners" in the distributor's new product agency, allowing distributors to achieve the entrepreneurial transformation of "marketing merchants" with low capital costs without investing too much in warehousing and logistics resources. 5. Encourage small shops to open more stores to increase income: When the supply chain company's traffic reaches a certain scale, the supply chain company can consider rebranding small shops, but the purpose of rebranding is not to control goods. Instead, it is to encourage shop owners with business awareness to open new stores and accept the platform's franchise, as well as professional guidance and management. When shop owners have more stores, they will be less able to manage them and will increasingly rely on the supply chain company's deep services. For distributors transforming, doing warehousing, city distribution, B2B, and convenience stores, the core is to do one thing well: service. Never touch transactions, and never open your own stores. The above are New Distribution's observations and thoughts on the transformation path for distributors to local logistics + B2B e-commerce. In the actual transformation process, distributors may encounter various specific problems due to different local conditions. Welcome friends to add the author's WeChat to discuss together. New Distribution is currently conducting a national survey on distributors' warehousing and logistics costs. The purpose is to fully understand the warehousing and logistics cost situation of distributors and provide constructive data for distributors doing local logistics. We welcome you to assist us in completing this survey. Distributor friends who participate in this questionnaire will receive a red packet of 5-10 yuan as a thank you. New Distribution will also share the full report with you. Participation method: scan the QR code below to fill in the questionnaire: -END-