In recent years, amid channel reform explorations, the Baijiu industry has seen numerous business models based on "reducing intermediate links to lower costs." They operate with high profiles and considerable influence. Mr. Zeng Xiangwen states that "reducing channel links to lower costs" does not hold up in reality. If anyone claims this as a business opportunity and starts a company on that basis, they are lying. ◆Where are the redundant links waiting for you to cut? Under market competition, no existing channel link is redundant. The reasoning is simple: a company's instinct is to maximize its own interests and chase high profits. No company would tolerate employees with high pay but low contribution; similarly, how could they tolerate channel members who demand much but deliver little? Every company has the urge to burn bridges, and valueless redundant channel members are quickly squeezed out. In fact, apart from government-monopolized franchise sectors, redundant channel members cannot exist. ◆Does reducing middlemen lower or raise channel costs? Taking stock, the assertion that "reducing channel links lowers costs" is unreliable. Hypermarkets are considered models of low prices and direct supply. However, their low prices stem from supply chain management, off-business investment of cash flow, policy subsidies, and marketing management—not from cutting intermediate links. Direct selling models claim to reduce middlemen. Yet why are the retail prices of their products far higher than peers, and why are the average incomes of practitioners extremely low? Clearly, the costs of direct selling models are higher than those of hypermarkets. E-commerce and O2O also claim to reduce intermediate links and pass savings to consumers, but their real costs are not low. Most of their low prices rely on "counterfeit goods with low costs, fake rankings and transaction volumes, burning money on subsidies and illegal below-cost dumping, tax incentives, and cutting promotional expenses regardless of consequences." Their costs are also higher than traditional commerce. Why doesn't removing intermediate links lower channel costs? First, the number of channel members is inversely proportional to total channel costs. Intermediate links exist precisely to lower channel costs. Removing them may well raise costs. Second, the specialization and scale of intermediate links ensure that total channel costs decrease. Companies prefer to recruit distributors rather than sell directly from the factory. A manufacturer's flagship store mainly serves brand value; its actual operating costs are certainly higher than those of distributor-to-retailer models. When consumers travel far for medical treatment, they implicitly bear all costs of identifying doctors, transportation, and accommodation. Although they don't share the hospital director's salary, pharmacy manager's wages, or store rent, their expenses are certainly higher. Adding a hospital link allows doctors to specialize and scale their functions. Although an extra link is added between doctor and patient, patients actually reduce their costs. Farmers would rather sell vegetables at 1 yuan at the field than deliver them to supermarkets themselves, because self-delivery could cost 50 yuan per jin. Only by selling to middlemen at 1 yuan can city residents buy vegetables at 3 yuan. Each removed link may lose professionalism—for example, a pharmacy selling drugs directly to patients is less professional than a hospital, forcing patients to bear the responsibility of diagnosing themselves—and may lose scale advantages: express logistics costs are certainly higher than the costs of distributing from national hypermarkets to terminal stores. As property prices rise and urban management imposes more restrictions on community property, consumers' costs of picking up online purchases are rising, and the convenience of receiving packages is declining. It's astonishing: intermediate links seem removable, yet channel costs often become higher! ◆The problem lies with "consumers + fraudsters" So why does the lie of "reducing channel links to lower costs" gain traction? The problem lies with consumers—their cognitive biases, combined with fraudsters exploiting these biases, create a perfect match. It must be exploited, and producers and operators have no choice but to exploit it. First, consider consumers. Consumers love bargains and hope channel costs are free, but channel costs objectively occur and must be passed on to consumers. Product costs inherently include production costs and channel costs. However, most consumers are only willing to pay production costs, not channel costs. Patients are willing to pay for "useful" tangible drugs and diagnostic tests, but not for "doctors who just talk." Diners are willing to pay for "useful" tangible dishes, but not to bear minimum consumption—which actually covers rent and utilities. Thus, hospitals must keep registration fees low and drug prices high, embedding doctor compensation into drug and test fees. Many doctor-patient conflicts arise from this, harming both doctors and patients. Restaurants must raise dish prices and drive away customers who occupy seats for half an hour over one beer, leading to countless disputes. Next, consider fraudsters. Facing such consumers, the proper business path is to build brands, winning consumers through product quality, service image, and corporate reputation. However, some operators find the proper path too costly and seek shortcuts: they disguise high prices as low prices, or when lowering quality to cut prices, they fabricate lies and attribute the low prices to other reasons. Thus, they hit upon the excuse of "reducing channel links." Unable to compete on brand, they compete on price; unable to achieve cost-based low prices, they weave lie-based low prices. ◆Question: What is the real way to lower channel costs? Answer: From a "social cost" perspective, the government is certainly the biggest problem—rule by man, enforcement flexibility, high taxes, monopolies, administrative costs, land policies, real estate, labor contract law, and lack of social security all inflate channel costs. The lack of credible evaluation institutions in society forces companies to "run a society" themselves, which has a particularly large impact on costs. However, companies are powerless over "social costs." As a company, the only way to reduce costs is to lower channel transaction costs and management costs. We recommend three methods to lower channel transaction and management costs. 1. Zeng's Light Marketing: "Frictionless Channels + Automated Management" (1) Channels are "product sales pathways + market resources that consolidate brand asset appreciation"; (2) Frictionless channels: consistency in customer positioning, consistency and complementarity in brand promises, seamless management integration, etc. Main tool: Zeng's 5V Model. (3) Three-dimensional layout of light marketing: Time layout: Channels should precede the brand by half a step. Too early leads to inventory piling up in channels, spending money to prove incompetence, leaving legacy problems, and then erroneous responses like price cuts and promotions, which move further away from the goal. Too late leaves consumer purchase desire idle and competitors growing stronger. Don't believe in hunger marketing. Space layout: Balance consumer convenience and consumer perceived value. Business format layout: Such as consumer formats and sales formats, online and offline. (4) Light marketing channel combinations: "Value-function" combinations, role combinations, promotion channels, consumer education channels, clearance channels... (5) Channel collaborative marketing: Choice between feudal system or centralization, strategic planning of service capabilities. 2. Industry 4.0 (1) Downsizing Marketing workshop-ization + production assembly lines + intelligent robots + IoT + decision modeling reduce workers; white-collar and gold-collar workers are no longer needed. For example, Foxconn's intelligent robots replace workers and also line leaders, team leaders, and quality inspectors. Not only are costs lower, but political risks, social risks, and scapegoat risks are also avoided... Around 4.0 new tools, re-evaluate human value, re-evaluate job value, and re-examine value chains to achieve management reduction. Companies compete on who builds better models, not on the intelligence or physical strength of operators. Operators lose their jobs too! (2) Automation reduces transaction costs Companies evolve from "systems assisting people" to "people assisting systems." Finance, shipping-payment-reconciliation, customer points rewards, member discounts, distributor performance rebates, logistics, retail, restaurant services... From factory to "consumption place + sales place," all management controls and decision action instructions are automatically completed by intelligent agents. Industry 4.0 uses a higher-level intelligent system to uniformly integrate, optimize, and manage all links of the entire product industry chain. (3) Intelligence eliminates work errors and saves education costs Each channel link can summarize and learn on its own, surpassing humans. When intelligent robots play chess against humans, the robot will ultimately win: the more game records, the more games played, the more the robot accumulates, the more countermeasures it has. Moreover, robots do not make wrong judgments due to emotions, mentality, stress, fatigue, divorce, or heartbreak. This year, China's stock market was almost crashed by financial intelligent trading systems... Therefore, reduce human thinking and judgment. Intelligent machines execute creatively, while ordinary employees execute passively, following instructions. Robots improve themselves through sample accumulation and rich information. Although humans also have an "experience curve," it is negatively affected by responsibility, incentives, turnover, memory, and other factors. Kotler's "Marketing Science," "Marketing Models," and Professor Lilien's "Marketing Engineering" have long laid the foundation. (4) Information collection, transmission, and costs have recently dropped significantly, thereby reducing the cost of applying intelligent technology to channel management. The IoT is the most important source of information collection. Its development is affected by the cost, transmission speed, and coverage of wireless internet. These are maturing. 3. Walmart's Seamless Cross-Channel Performance Management The clever Procter & Gamble company conceived a "cross-enterprise seamless integration" management plan, which was rejected by Kmart, the world's largest retailer at the time, so they were eager to meet Walmart. The leaders of P&G and Kmart had close personal ties and had jointly fought against Walmart, so for a long time, the conflict between P&G and Walmart was very sharp—Pritchett couldn't even see Sam Walton. In July 1987, Pritchett invited Walton to Spring Lake, Arkansas—a landmark meeting. Within three months, P&G and Walmart formed a collaborative team, using computers to share information. P&G used Walmart's sales and inventory data to improve production and shipping efficiency. Both companies' finance, distribution, production, and other functional departments formed dedicated teams sent to Walmart for collaborative management. In 1989, Walmart began supply chain management for P&G's diaper products, building a JUST-IN-TIME automatic ordering and delivery system. Walmart no longer engaged in specific logistics activities; both parties no longer negotiated terms for each transaction (such as distribution and pricing), shortening the entire business process from purchasing, storage, sorting, and replenishment to sales; financial settlement was no longer in material forms like checks but completed through computers, terminals, and other electronic devices. The "bullwhip effect" in the supply chain was eliminated. P&G's transaction costs fell; with the MMI system, formulating and implementing marketing plans became very easy; the automatic ordering system made reducing inventory costs and risks possible; the production alliance strategy improved factory productivity, built a flexible production system, cut raw material procurement costs, and reduced opportunity losses from price fluctuations; by eliminating intermediate distribution links, distribution costs were saved. Walmart also reduced transaction costs: compressed inventory costs and risks; reduced indirect expenses from paperless trade; lowered labor costs from personnel reorganization and reallocation; and cut multi-link distribution costs. Years later, Walmart became number one, and Kmart was out. This article has been authorized for publication by the author. In early July, our platform will organize the third B-end e-commerce study tour, visiting domestic B-end e-commerce platforms that offer lessons for distributor transformation. Interested friends can long-press the QR code below to register. Organization format

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