---
title: "Is the Logic of Distributors Doing Unified Warehousing and Distribution Valid?"
description: "A recent article criticizing FMCG B2B has sparked discussion, pointing out the conflict between distributor functions and unified warehousing and distribution. This piece argues that while the theoretical logic is sound, timing is crucial, and with the right external catalysts, unified warehousing and distribution can succeed."
author: "廖磊"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-09-27"
language: "en"
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# Is the Logic of Distributors Doing Unified Warehousing and Distribution Valid?

> A recent article criticizing FMCG B2B has sparked discussion, pointing out the conflict between distributor functions and unified warehousing and distribution. This piece argues that while the theoretical logic is sound, timing is crucial, and with the right external catalysts, unified warehousing and distribution can succeed.

Click to read the original article for details.
Recently, an article criticizing FMCG B2B has been widely shared online, sparking numerous comments. The article objectively analyzed a few failed cases, pointing out that the conflict between distributor functions and unified warehousing and distribution is a practical difficulty, and that traditional warehousing and distribution efficiency requires an overall evolutionary solution. These viewpoints are all correct, especially when there is no successful case to prove otherwise. So what will become of unified warehousing and distribution? Today, we will discuss this topic again.
Timing Determines Success or Failure
In business theory, the logic is correct, but in reality, it may not succeed. This is not because the logic itself is wrong, but because of timing issues. We Chinese say that to achieve success, one needs "heaven's time, earthly advantage, and human harmony," with heaven's time being the most important. Seeing a trend but rushing in before the timing is ripe often turns "brave warriors" into "martyrs." Looking back at the twenty-year development of e-commerce may give us some insights.
Twenty years ago, when China's internet was still in the PC stage, domestic companies began to learn and replicate American e-commerce companies like Amazon and eBay. In a short time, countless e-commerce companies emerged, the most representative being 8848, Dangdang, China Yellow Pages, EachNet, etc. At the end of 1999, just as the internet boom was peaking, more than 370 B2C online companies were born in China. By 2000, this number had grown to 700. However, with the burst of the internet bubble in 2000 and the sharp decline of the NASDAQ, a batch of e-commerce companies like 8848 went bankrupt. By 2001, only three or four remained in people's memory. Subsequently, e-commerce experienced a relatively long "ice age." But with the cultivation and growth of e-commerce consumer groups, the rapid development of domestic infrastructure, and the implementation of national industrial support policies, e-commerce soon flourished again, becoming a major force driving commercial transformation.
Advanced business logic foresees the future of business development, but doing things at the right time is the way of business.
The Practical Logic of Unified Warehousing and Distribution
If the theoretical logic is not problematic, then is there a problem with the practical logic? Let's first look at a chart.
This is a statistical chart from a survey of distributors. 80% of distributors showed interest in third-party warehousing and distribution logistics. In reality, distributors' self-built warehousing and logistics systems have limited room for control capability improvement and cost reduction, hence their strong interest in professional third-party warehousing and logistics.
Unified warehousing and distribution is a highly professional project with extremely high operational requirements. Distributors are not worried about their channel networks being controlled by others, because distribution channels themselves are public social resources, and no one has control over them. Moreover, third-party warehousing and logistics do not interfere with distributors' operations. The business functions of distributors' sales teams are not weakened, and they will not lose sales channels. Therefore, in reality, there will not be a phenomenon where the postman (warehousing party) and the girlfriend (customer) hold hands. Distributors are concerned about whether third-party warehousing and logistics companies can do the job well according to their business processes without affecting their business.
My personal view: **If theoretical logic and practical logic do not conflict, then commercial transformation can definitely succeed.**
Internal Evolution Needs External Factors as Catalysts
**Three external market factors:**
> 1. Market pressure in all industries is particularly high, making it uneconomical to invest in self-built warehousing and logistics;
>
> 2. Commercial real estate is getting more expensive, and warehousing costs are rising rapidly, sharply compressing distributors' profit margins;
>
> 3. Unified warehousing and distribution is one of the few realistic options.
Transformation requires the overall evolution of the commercial market, which is driven by market competition. However, if a thing relies solely on its own internal forces for self-innovation, the process is often lengthy. It needs an external factor as a catalyst, and this catalyst must be something that can replace the original and be superior to it, significantly reducing costs and improving efficiency.
With the catalysis of external factors like unified warehousing and distribution, and reliable commercial operations, it can quickly help the internal market undergo transformation and bring about a sweeping revolution.
In Business, There Is No Right or Wrong, Only Winning or Losing
The essence of business is transaction premium, and the essence of capital is the pursuit of huge profits. When capital is underdeveloped, business develops gradually according to market rules. As the capital market grows, new business areas quickly gather capital power, intensifying competition.
From the rise of the concept of shared bikes to the fall of many operators, the fault lies not in logic or capital, but in the social environment not being ready to accept it. The sudden wave of shared bikes triggered many problems incompatible with social rules. Driven by capital, shared bike companies entered a high-intensity race against time, strengthening themselves. When the wind died down and everything settled, the leaders survived, and the laggards were eliminated. The e-commerce industry, food delivery industry, and ride-hailing industry are all the same: the victor becomes king, the loser is out, with no right or wrong.
However, the business scenario of unified warehousing and distribution is complex, and the window period is long. Brutal and rapid tactics are not suitable for the finely polished unified warehousing and distribution. "Speed" is not the core competitive factor. Whoever has a solid foundation and can go far will be the winner.
What Is Meant to Come Will Always Come
As a new thing that has only been noticed in recent years, unified warehousing and distribution will always be accompanied by different voices of doubt, criticism, and disdain. The entry points for unified warehousing and distribution are diverse, but I personally believe that large distributors doing FMCG unified warehousing and distribution are the best subjects. First, they understand the FMCG industry and know its pain points deeply; second, they have prestige in the industry circle, making it easy to obtain product resources and control channel resources; third, they have traffic to support them, so even in the immature stage of operation, they can continue. When the overall evolution environment of the FMCG industry matures and the warehousing and distribution business model has taken shape, unified warehousing and distribution in the same city will usher in a spring of vigorous development.
**We firmly believe that what is meant to come will always come, and it will definitely come.**
On October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the "2018 FMCG City Distribution Logistics Conference." At that time, we will invite industry experts, FMCG warehousing and distribution specialists, and distributors who have transformed to unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, under the theme "New Distribution, New City Distribution." We hope it will bring you different inspiration and thinking!
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