Everyone is climbing over the distributor's wall. The mainstream trend of business development in the Internet era starts with "subtraction," which means removing more transaction costs. In the pre-Internet era, companies couldn't directly transact with customers, so establishing a pyramid-shaped distributor network was very necessary. For companies, this structure minimized transaction costs. Since the advent of the Internet, companies can directly connect with tens of thousands of consumers. We all know this well: if a company opens a store on Tmall, it can directly save the transaction costs that would have gone to distributors and pass the savings to customers. The money distributors used to earn is now split between the company and consumers. It can be said that the so-called business model innovation now is about companies and consumers sharing the distributors' interests, and even the terminals' interests. E-commerce is the most obvious example: it not only climbs over the distributor's wall but also bypasses the terminals, selling directly to consumers online. That's why even Walmart acquired Yihaodian to lay out its strategy, keeping a backup plan. It's not just e-commerce doing this; any company with foresight starts "climbing walls." By-Health began printing QR codes on its protein powder packaging, allowing consumers to bypass distributors and terminals to contact the company directly. When terminals discovered this underhanded trick and threatened to break up with By-Health, By-Health had already connected with over 1.3 million fans. After the breakup, terminals could only sell other brands? Shaking hands on stage, kicking feet under the table. Frankly, I understand the helplessness of these terminals. They largely rely on building up a company's brand. After they help sell products and cultivate the brand, the company eventually uses the brand's inherent advantages to squeeze distributors' profits. When it's not a brand, they beg you; when it becomes a brand, they squeeze your interests. What can you do? You can't not buy it; you have to continue selling this ungrateful brand. So terminals will find ways to introduce new brands to challenge the brands they helped cultivate. Some terminals even "hang a sheep's head and sell dog meat," using terminal layout and pricing as reference to make these ungrateful brands targets for new brands. On the surface, they give face to old brands, but in reality, they use them as "targets" to attack. Or initially, when a company's new product is hard to sell, they find a distributor to handle distribution for a province. Once the product becomes a brand, the company uses "channel flattening" as an excuse to reduce the distributor's territory to just one provincial capital city, establishing direct relationships with distributors in other cities. Thus, the original provincial distributor becomes a city distributor, on equal footing with other city distributors. The original provincial distributor's interests are cut significantly, and their status is reduced. Can they feel balanced? It can be said that from the start, the relationship between companies and distributors has been one of shaking hands on the table and kicking feet under the table. Now that business is tough, companies are playing the game of climbing walls. Distributors shouldn't complain; it's inevitable. Not only distributors, but even those once-glorious "terminal kings" are now facing difficulties. Although they can engage in so-called O2O, it's actually a grafting effort due to being too big to change. As a distributor, you should never engage in O2O. You don't need to open a physical store to raise costs and then do e-commerce. In the end, you'll find that while playing e-commerce, you're also supporting a physical store, carrying a burden. Prosumers The entire industrial structure is developing like a dumbbell: thin in the middle, thick at both ends. The thin middle means distributors are increasingly struggling; the thick ends mean resources are either moving toward manufacturers or toward terminals. At that time, distributors could choose one end to develop: either find a contract manufacturer to make their own brand, or invest in terminals and build their own. Unfortunately, many chain supermarkets bypassed middlemen and directly connected with manufacturers via ERP. That is, from then on, both ends were already squeezing distributors. Today, even this dumbbell is gradually disappearing. Consumers not only buy directly from manufacturers, but they also become "prosumers." What is a "prosumer"? It means consumers directly participate in product design and customization. In this way, manufacturers can even receive deposits first, or even use crowdfunding. These consumers can even become shareholders and agents of the manufacturer. These agents differ from traditional distributors: traditional distributors have no use demand for the product itself, while these individual agents have both resale demand and personal use demand. This is different from traditional distributors. For example, Amway's agents are also Amway's consumers. Today, the originally clear roles have become mixed. A person can simultaneously be a consumer, shareholder, and agent. It is these many mixed-role individuals that form a modern company. Distributors should not remain stuck in their original roles, like "carving a mark on the boat to find a lost sword." In the near future, the distributor industry is destined to disappear. You score zero, they score negative. Distributors, unlike terminals, cannot access consumer databases. Nor do they have core production like manufacturers. Terminal advantages are currently all pushing toward O2O. In fact, O2O is a last resort because these former terminal advantages are not easily abandoned by traditional companies. So they graft new things onto these traditional advantages. For example, Suning's e-commerce is built on its so-called chain advantages, but Suning lost to JD.com, a pure e-commerce company without chain store advantages. The fact is that Suning's e-commerce not only has to support its e-commerce team but also its physical store team. It can't do pure e-commerce like JD.com with full effort. Past advantages have become burdens in the Internet era. The manufacturer's advantage is its core production technology, but in a difficult economic environment, manufacturers need more production orders to survive. So not many can engage in "prosumer" consumption with consumers. Most manufacturers have many workers to support and focus on current output. They prefer to act rather than think. From this, you understand that in this era, if the middleman's advantage is zero, then the terminal's and manufacturer's advantages are negative. Comparatively, in this new era, middlemen actually have an advantage over manufacturers and terminals: they have no historical baggage and can enter Internet business light-footed. Higher capability requirements Distributors can find manufacturers to do OEM for their innovative products, changing the original upstream relationship into a new employment relationship. Distributors don't have to carry the heavy shell of terminal resources to do O2O. Instead, they can shed the cost of physical store rent and directly pass savings to consumers. Distributors can almost travel light. The difference is that distributors can no longer rely on capital advantages for simple resale. The bankruptcy of Haifuxin declared that this capital-intensive, low-return distributor model has reached a dead end. Distributors face a more technically demanding resource integration. Lazy thinking is the main dilemma for distributors. The distributor industry will disappear. This is bad news for distributors with rigid thinking, but undoubtedly a huge opportunity for those ambitious to start anew. 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