Many distributors, when considering entering B2B, prioritize starting with warehousing and distribution. This is partly because among all B2B segments, distributors are most familiar with warehousing and distribution, and also because they have disposable resources in this area. But is starting with warehousing and distribution truly the best approach for entering B2B? 1. Doing it alone lacks strength; alliances face alignment issues Warehousing and distribution investments are generally large, and profitability requires significant throughput. A distributor's own transaction volume often cannot meet the throughput of a large warehouse, so many distributors, when starting B2B, first consider allying with peers in the industry to jointly build a unified warehousing and distribution logistics system. However, after examining many markets, the author finds that alliances for unified warehousing and distribution may not be the best solution. Distributors may get along well when socializing at chamber of commerce events, but when they come together to work on a project, many issues surface: how much to invest, equity distribution, who manages, all requiring extensive negotiation and compromise to balance interests. Especially during losses, internal disputes, disagreements, and management conflicts expose the shortcomings of partnerships. So, cooperation is possible, but it's better to lay all cards on the table before starting. 2. Many distributors lack the capability to shift from mobile sales to order-based sales. If a distributor outsources logistics to a unified warehousing and distribution system, they must break their original business model, changing from mobile sales to order-based sales. However, in the north, many distributors use mobile sales with goods in rural areas. If they switch to order-based sales, they face three situations: First, the transportation issue for salespeople to reach rural areas. Second, without carrying goods, subsequent services like returns, exchanges, and stock transfers need coordination. Third, carrying goods for sales often involves gray income that disappears with order-based sales, so employees, especially veterans, resist internally. Distributors switching to order-based sales will face a long adjustment period. During this time, sales may decline, management may be chaotic, and many distributors give up halfway. More distributors think they can't do it and don't even try. Additionally, FMCG industry profits are very thin. Many salespeople's wages include not just sales commissions but also hidden compensation for driving and loading. Once this part is separated, either salespeople's wages decrease or distributor costs increase. For distributors with low sales and modest salaries, balancing team stability and profit becomes difficult. Of course, whether or not to do B2B, trying to shift from mobile sales to order-based sales is necessary, as mobile sales are costly and risky, and once sales reach a certain scale, growth cannot rely on adding more vehicles. 3. Only doing FMCG unified warehousing and distribution yields thin profits All distributor friends initially hope that unified warehousing and distribution can save costs through centralized logistics, deliver for others, and make money. But only after doing it do they realize that FMCG logistics alone isn't very profitable. First, standardized management increases costs; second, per capita efficiency is hard to improve significantly; third, the first orders received are often heavy goods like bottled water. These low-value-added items have weak willingness to pay. It's very hard to balance one's own profit with what users are willing to pay. Of course, China's logistics industry, especially the urban distribution market, is a trillion-yuan market and has been booming in recent years, widely favored by investors. Distributors have unique resources. If done well, urban distribution can be profitable, but that profit comes from improving service, adding value, and controlling costs. Unified warehousing and distribution can be done, but trying to achieve B2B through unified warehousing and distribution is simply wrong. 4. The logic of doing warehousing first, then a trading platform is flawed Some distributors think that even if warehousing doesn't make money, once all goods are in their warehouse, they can add an order platform on top, and then warehousing plus online orders naturally becomes B2B. But those who think this way overlook a fact: the owners of goods stored in your warehouse are very wary of you cutting off their path. If you handle both distribution and transactions, do you think they'll feel at ease? Also, the orders suppliers give you are mostly from salespeople's promotions. How much natural sales volume is there? Without salespeople, how much can distributors sell naturally? Distributors entering B2B can hardly achieve online transactions through unified warehousing and distribution. The core issues are: First, B2B must meet one-stop supply, requiring high-density warehousing of goods, which takes a long time to integrate. Second, unified warehousing and distribution inevitably leads to a matching platform. Numerous market cases have proven that in the FMCG sector (alcohol, food, beverages), matching platforms are not suitable, as detailed in previous articles. I won't repeat here. Moreover, unified warehousing and distribution and B2B are completely different things. Distributors should never treat them as sequential steps. For FMCG distributors doing B2B, to ensure complete product range, unified warehousing and distribution is hard to achieve; it can only be solved through unified procurement and distribution. The platform must have pricing power over goods to ensure flexibility in selling. So in the early stages of platform operation, when GMV is not high, there's no need for a large warehouse supported by WMS software. A warehouse of one to two thousand square meters might suffice. The core of B2B is supply chain organization. The value of a large warehouse is not saving costs but the ability to process orders at scale. So, wait until your traffic is large enough before building a big warehouse. As for how distributors should enter B2B, the author suggests starting with incremental growth, not existing business. What is incremental? Come to our FMCG + Internet Conference during the Chengdu Spring Sugar Fair in March, and I'll explain in detail at the event. -END-