---
title: "Is the Logic of Distributors Doing Unified Warehousing and Distribution Valid?"
description: "Recently, Mr. Yang Yonghua's article 'FMCG B2B Companies with Successful Logic, 90% Have Gone Bankrupt' was widely reposted online and sparked extensive comments. The article objectively analyzed individual failure 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 holistic evolutionary solutions. These viewpoints are correct, especially in the absence of successful case evidence. So what will become of unified warehousing and distribution? Today, we will discuss this topic again. Timing determines success or failure. Business theory..."
author: "廖磊"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-06-29"
language: "en"
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# Is the Logic of Distributors Doing Unified Warehousing and Distribution Valid?

> Recently, Mr. Yang Yonghua's article 'FMCG B2B Companies with Successful Logic, 90% Have Gone Bankrupt' was widely reposted online and sparked extensive comments. The article objectively analyzed individual failure 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 holistic evolutionary solutions. These viewpoints are correct, especially in the absence of successful case evidence. So what will become of unified warehousing and distribution? Today, we will discuss this topic again. Timing determines success or failure. Business theory...

Recently, Mr. Yang Yonghua's article 'FMCG B2B Companies with Successful Logic, 90% Have Gone Bankrupt' was widely reposted online and sparked extensive comments. The article objectively analyzed individual failure 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 holistic evolutionary solutions. These viewpoints are correct, especially in the absence of successful case evidence. So what will become of unified warehousing and distribution? Today, we will discuss this topic again.

Timing determines success or failure.
Business theory logic is correct, but in reality it is not successful. This is not a mistake in logic itself, but a matter of timing. We Chinese say that to achieve success, one needs 'timeliness, geographical advantage, and harmony among people,' with timeliness being the first priority. Seeing the trend but the timing is not ripe, and rushing to be the first mover often turns 'brave warriors' into 'martyrs.' Looking back at the twenty-year development of e-commerce may bring us some inspiration.

Twenty years ago, when China's internet was still in the PC stage, we 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 approaching, more than 370 B2C companies were born in China. By 2000, that number had grown to 700. However, with the burst of the internet bubble in 2000 and the sharp decline of 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 quickly prospered again and became a major force driving commercial transformation.

Advanced business logic foresees the future of business development, but being timely is the way of business.

The practical logic of unified warehousing and distribution.
If the theoretical logic is not a problem, then is there a problem with practical logic? Let's first look at a chart.

This is a statistical chart from a distributor survey. 80% of distributors showed interest in third-party warehousing and logistics. In reality, distributors' self-built warehousing and logistics systems have limited room for control capability improvement and cost reduction, so they show 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 the distribution channel itself is a public social resource, and no one has control over it. Moreover, third-party warehousing and logistics do not intervene in distributors' operations, and the business functions of distributors' sales teams are not weakened, so they will not lose sales channels. Therefore, in reality, there will not be a phenomenon where the postman (warehousing party) holds hands with the girlfriend (customer). What distributors worry about is whether the third-party warehousing and logistics enterprise 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 motivation for evolution requires external factors as inducements.
**Three external market factors:**
> 1. Market pressure in all industries is particularly high, and investing funds to build self-owned warehousing and logistics is uneconomical;
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> 2. Commercial real estate is getting more expensive, and warehousing costs are rising rapidly, sharply compressing distributors' profit margins;
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> 3. Unified warehousing and distribution is one of the few realistic options.

Transformation requires the overall evolution of the commercial market, which is the result of 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 an inducement. This inducing factor must be something that can replace the original and be superior to it, significantly reducing costs and improving efficiency.

With the catalysis of external inducing factors like unified warehousing and distribution, and reliable commercial operations, it will quickly help the internal market of commerce undergo innovation and transformation, bringing about a devastating and sweeping change.

Business has no right or wrong, only win or lose.
The essence of business is transaction premium, and the essence of capital is the pursuit of huge profits. When capital is underdeveloped, business will develop gradually according to market rules. As the capital market grows, new business areas will quickly gather capital forces, intensifying competition.

From the rise of the concept of shared bikes to the fall of many operators, the fault is 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 that were not in harmony with social rules. Driven by capital, shared bike companies entered a high-intensity track of life-and-death speed, strengthening themselves. When the wind has stopped and everything has settled, the leader survives, and the laggards are eliminated. The e-commerce industry, food delivery industry, and ride-hailing industry are all the same: the victor is the king, the winner takes all, with no right or wrong.

However, in the field of unified warehousing and distribution, the business scenarios are complex, and the window period is long. Brutal and rapid tactics are not suitable for 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 destined 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 such as doubt, criticism, and disdain. The entry points for unified warehousing and distribution are diverse, but in my personal opinion, large distributors doing FMCG unified warehousing and distribution are the best subjects. First, they understand the FMCG industry and know the industry's pain points; second, they have prestige in the industry circle, making it easy to obtain product resources and control channel resources; third, they have traffic as support, 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 destined to come will always come, and it will definitely come.**

From August 22 to 24, the '2018 China Digital Innovation Conference (2018FDIC)' with the theme 'Finding New Engines for Growth' will be held in Shanghai, hosted by the China FMCG Industry Association and organized by New Distribution!

This conference will last for 3 days, focusing on two major themes: marketing and supply chain, with six parallel forums on brand, channel, communication, B2B, same-city logistics, and innovative retail. We will invite industry bigwigs, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.

We will invite more than 500 executives from FMCG companies, 200+ CEOs from the B2B industry, and 1000+ major FMCG distributors to gather together to discuss how the FMCG industry can use digital tools to achieve its own rapid growth again in the context of the digital era. This conference will build a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information, understand the best application practices, and master more practical transformation skills.

Proposed invited companies
Conference time
August 22-24, 2018
Conference location
Shanghai Baohua Marriott Hotel
Conference content
August 22: Full-day check-in
Afternoon 14:00-17:30
Distributor same-city logistics parallel forum
Evening 18:30-21:00
New Distribution Night Bigwig Dinner
August 23: Theme: Marketing Digital Innovation
Morning 9:00-12:00
Marketing Digital Innovation Main Forum
Afternoon 14:00-17:30
Brand, Channel, Communication Parallel Forums
August 24: Theme: FMCG Supply Chain Digital Upgrade
Full day: FMCG Supply Chain Conference
Registration method
The registration channel is now open. Long press the QR code below or click 'Read Original' to register. The special early bird ticket countdown is only 2 days left, enjoying a half-price discount, and will return to the original price on July 1!
Registration consultation
Ticket inquiries:
Media cooperation inquiries:
Highlights of New Distribution's previous conferences
Click the link below to review the first, second, third, and fourth FMCG + Internet conferences:
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