My family was once one of the largest distributors of a beer brand in the Yangtze River Delta, a true 'middleman'. On paper, we made 1.5 yuan profit per box of beer sold, but to grab customers, we often sold at cost, or even at a loss, subsidizing 0.5 yuan per box! We relied on the brand giving us a small rebate per box at year-end if we sold enough... Later, the brand got smarter and gave rebates in beer instead of cash... and then there was nothing.

Don't worry! I'm not complaining, nor am I writing a business commentary on 'beer'. Instead, I'm using this real case to reflect the current situation of most Chinese agents, wholesalers, and distributors.

It's often said that the internet hits physical stores hardest, but that's because physical stores are good at talking. Agents are honest but bad at shouting! If anything, the internet's first victims are 'middlemen'. Listen to the ads of a used-car platform: 'Person-to-person, no middleman to take a cut... No middleman!!!'

Indeed, with the rise of e-commerce, brands and manufacturers have bypassed middlemen and opened flagship stores on Tmall. Retailers, with their channel advantages, have gone directly to manufacturers for OEM, doing so-called C2M. The middlemen who once helped both sides conquer the market suddenly became orphans with no one to care for them.

Recently, I was invited to the 6th China Eyewear Agents Summit, attended by a group of such 'orphans'. Although some, having been large before, still looked prosperous, many more felt physically exhausted, and some were even struggling to survive. Facing this predicament, I really wanted to speak truthfully in my keynote on 'Internet+', but I feared offending industry leaders and provoking the old-timers, ending up criticized by all. So I said some grand words and left early.

In fact, as middlemen, doing nothing now is like digging our own graves. If we compromise and continue to curry favor with upstream and downstream, we're surviving on our knees, and not necessarily for long. So how to break this 'middleman dilemma'? I've summarized two points, hoping the orphaned middlemen can see them.

First, shift from 'selling goods' to 'selling services'.

In the era of Internet+ and consumption upgrade, consumer demands are subtly changing and upgrading every day. Consumers are like demanding little demons; the more you satisfy them, the greedier they become, utterly fearless. So, whether upstream retailers or downstream manufacturers, even if they initially leveraged the internet to connect directly with consumers, over time, to satisfy increasingly greedy consumers, they will inevitably extend their business and management chains.

However, we know that for a company to develop efficiently and quickly, it must shorten its management chain and become more focused, otherwise it will be dragged down by a distorted business model. A vivid example is IBM selling off its PC business.

From this, we can see a huge opportunity.

For instance, Ele.me built a food ordering platform, meeting people's delivery needs and improving order efficiency for scattered restaurants. But if Ele.me kept extending its business chain—not only as a platform but also opening restaurants and doing logistics—what would happen? Similarly, if the scattered restaurants that supply Ele.me also started their own delivery platforms and logistics, what would be the result?

Yes, to do something is to leave something undone. Between Ele.me and restaurants, there's an intersection: logistics. Thus, professional third-party delivery logistics becomes their common need. And what is logistics? It's a service!

When I returned to my company from the 6th China Eyewear Agents Summit, dozens of agents from across the country followed me, expressing willingness to become local partners for our 'Eyesee' mobile optometry service, jointly developing this Internet+ consumption upgrade project. They were willing to completely abandon their traditional agency and wholesale business. Why?

Because they know that this way they don't have to hold inventory or risk huge transformation investments. They only need to handle the 'service' part based on the full orders dispatched by Eyesee headquarters, and earn more stable and higher income than before.

At the same time, they know that a brand like ours wouldn't be foolish enough to extend its business chain directly to their doorstep. Because when there are thousands or tens of thousands of optometry vehicles nationwide, if all were company-owned, the company would bear enormous operational risks and management costs. Even if it could earn more profit, it would be eaten up by unreliable risks and management costs. It makes no sense!

Yes, as middlemen, there's no need to become competitors with our former 'brothers' upstream and downstream, all turning into 'retailers'—that's a bloody red ocean, not a safe haven. Instead, we should leverage our existing 'customer relationships' and become their indispensable service providers.

Second, shift from 'selling goods' to 'R&D'.

Most Chinese manufacturers lack R&D capabilities; they make what others make or do OEM. That is, even if manufacturers turn into retailers, they still sell homogeneous products, competing on price. When retail falls into price wars, it means product value is undervalued or no longer has indispensable user value.

What is business? Business is the process of value exchange. If your product value isn't unique or indispensable, what happens? You'll be gradually submerged in a red ocean, and the end is death! It's just a matter of sooner or later.

As middlemen, besides warehouses and salespeople, our assets are relatively light compared to factories. So it's easier for us to turn around. Middlemen don't need to worry about whether they understand the internet; as long as you understand consumers and know what they'll want in the future, that's enough.

In the business world, the most valuable thing is grasping 'demand'. As middlemen, we're industry insiders, closer to users than factories, more global in perspective than retailers, and more market-savvy than dedicated R&D teams. Yes, that's our advantage!

When I decided to return to China from the European and American eyewear markets, I spent two years familiarizing myself with the Chinese eyewear market. In my heart, I knew it wasn't just to 'know yourself and know your enemy', but to understand what Chinese consumers really need in eyewear. Once you know the demand, whether you open physical stores, online stores, or optometry vehicles doesn't matter. Because a good product is like a magnet, drawing users to you.

After getting familiar with the market, I spent another four or five years developing products and applying for many patents before fully committing to the market. The result is what you see now: the first patented eyewear product accounts for over 50% of our total sales.

So, as middlemen facing the internet era, since we can't avoid it, let's face the challenge, think creatively, combine our understanding of the market, start anew, develop products that the market truly wants now and in the future, and once again unite factories and retailers to deliver products to the end market.

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