---
title: "Pros and Cons: Should Distributors Do Private Domain?"
description: "This article discusses whether distributors should engage in private domain operations. It presents two approaches: direct team operations and collaboration with small B partners, highlighting the value beyond sales, such as consumer education, precise marketing, and optimizing product mix."
author: "任文青Andy"
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published: "2022-06-22"
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# Pros and Cons: Should Distributors Do Private Domain?

> This article discusses whether distributors should engage in private domain operations. It presents two approaches: direct team operations and collaboration with small B partners, highlighting the value beyond sales, such as consumer education, precise marketing, and optimizing product mix.

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Today we explore a topic: Should distributors do private domain?
Some people think that private domain is a hot topic, but it is a bit far from distributors! The core positioning of distributors is to serve terminals well, not to operate consumers.
However, the sudden recurrence of the epidemic in the first half of this year caused great difficulties for distributors' businesses. To cope with the decline in sales caused by epidemic lockdowns, some distributors began to try to solve part of the sales problem through private domain. In recent exchanges in different forms, distributors from different regions shared their practices and thoughts.
We found that private domain is not as irrelevant to distributors as many people think. In fact, many distributors may seriously underestimate the value of private domain!
So, what is the value of private domain? How to do private domain? Should distributors do private domain? Today's sharing hopes to bring you some inspiration.
**1**
During the epidemic, distributors' ways of doing private domain can be roughly divided into two types.
**The first type:全员营销, team directly operates private domain.**
For example, Zibo distributor Mr. Yan told us in a recent New Distribution live broadcast that since March, Zibo has experienced two waves of the epidemic, causing great difficulties to his business.
Conventional channels were affected, and sales in one and a half months were only equivalent to 10 days of normal sales, but various expenses did not decrease.
What to do?
Mr. Yan is an agent for Tsingtao Beer. He thought that conventional consumption scenarios disappeared, but demand still existed. So he led his team to try to deliver products directly to consumers' homes through Moments and group chats.
He chose distinctive, niche, and high-end beers, combined them into packages to match the home consumption scenario. In more than a month, he pulled 40-50 groups and sold 3,000-4,000 sets of high-end product combinations.
Mr. Yan admitted that compared with catering stores, the sales generated by private domain were not large, but it brought unexpected value.
First, these specialty products did not sell well in traditional channels. Through private domain, they completed consumer education and also cultivated a group of members for the company.
Second, it found a sales channel for high-priced and specialty products, explored personalized services, and enriched and optimized the company's product matrix.
Third, a rich product matrix will also consolidate the company's long-term partnership with upstream brands.
Not only that, private domain operations also brought Mr. Yan the possibility of expanding new business formats. He envisioned that in the future, he might open community stores to provide personalized and specialty services to consumers.
This is the first way to do private domain.
**2**
**The second type: cooperate with third parties (small B) to jointly operate private domain.**
Beijing distributor Ms. Gao shared her approach with us.
The epidemic broke out in Beijing at the end of April, and Ms. Gao's company was in Chaoyang District, the center of the epidemic. Under the epidemic, she thought a lot and made many attempts, one of which was to sell products directly to consumers.
Unlike Mr. Yan, she thought about whether she could unite terminal stores to do private domain together. She believed this logic was feasible.
First, the products are ready-made, and distribution is normally done, so no additional costs are needed.
Second, in recent years, with industry development, terminal store owners are familiar with system ordering and community marketing, and they even have their own WeChat groups.
Why not unite terminal stores to tap into consumer value?
Ms. Gao arranged dedicated personnel to be responsible, operating communities with small B, obtaining consumer orders, giving profits to small B, and letting them help complete fulfillment. On average, products have a 30-point profit margin, of which 15 points are given to them. After a period of trial, Ms. Gao believes this is a direction worth continuing to explore.
Because its value is obvious.
First, precise cost investment, such as new product tasting, buy-one-get-one activities, etc., can quantify input-output and obtain accurate feedback through private domain.
Second, different from products in circulation channels, private domain can help adjust product structure and optimize product matrix.
Third, large-age-stock products, if not handled well, can affect channels and price system. Private domain is a very healthy channel for handling large-age-stock products.
**In fact, Ms. Gao's approach is not an isolated case.**
Two distributors in Shenyang, Mr. Liu and Mr. Yang, also made similar attempts coincidentally.
It is worth noting that in addition to terminal stores, they also adopted a way of cooperating with property management to develop private domain.
Why property management?
Property management is a natural touchpoint connecting community residents. Epidemic lockdowns made home consumption a major consumption scenario, so using property management as a lever can gather a large amount of traffic in a short time.
What is the value of jointly operating private domain with small B?
Mr. Liu has clear thinking.
He believes that at least at this stage, the main value of private domain is not to generate sales. In addition to the private domain value mentioned earlier, Mr. Liu specifically mentioned feeding back to omnichannel sales.
What does that mean?
In addition to traditional channels, Mr. Liu's layout is relatively comprehensive, including Douyin e-commerce, O2O, and community group buying. He treats private domain as part of the omnichannel sales territory. Omnichannel layout can reduce risks and help optimize the company's overall efficiency.
Moreover, in traditional channels, if new products are delivered to terminals and do not sell well, subsequent handling is troublesome, and the cost of trial and error in product selection is high. **Through private domain directly connecting consumers, the trial-and-error cost of product selection can be greatly reduced.**
Not only that, holding a large number of private domain communities that can directly connect consumers can also enhance his bargaining power when cooperating with upstream brands.
**3**
Several distributor bosses in the cases all mentioned that sales are not the main value of current private domain operations.
Why do many people think that private domain is far from distributors? Because private domain does not contribute much to performance.
This is a fact.
Of course, it is reasonable to have such an idea, because when mentioning private domain, people naturally associate it with traffic, repurchase, and sales.
Mr. Liu Chunxiong pointed out that **FMCG private domain should not be pure e-commerce logic, but omnichannel marketing logic.**
Pure e-commerce logic only treats private domain as traffic to promote and sell goods. Under this logic, distributors have no reason to do private domain, after all, serving terminals well and maintaining channels is the right path.
But from the perspective of omnichannel marketing logic, it is completely different.
Doing private domain is not to compete with terminal stores for business.
Whether it is exploring personalized services, precise investment of new product promotion costs, or reducing trial-and-error costs of product selection, coordinating omnichannel sales, etc., **the value of private domain lies not in short-term, single-point sales, but in long-term, overall marketing.**
This is also the convergent understanding of several distributor bosses after doing private domain.
But we also have to admit that distributors trying private domain during the epidemic is partly forced by the situation. It must be known that if it were not for the epidemic, distributors would have enough to serve terminals and maintain channels, and they would not have time or energy to do things connecting consumers.
At the beginning of the 2020 epidemic, many distributors tried private domain, but because the market recovered quickly, they did not continue to deepen in this field.
So, will it be the same this time?
**4**
This needs to be looked at separately.
There are two ways to do private domain. The first is direct operation by oneself, which is actually a continuation of some distributors' practices during the 2020 epidemic.
This approach is closer to the original connotation of private domain, and it does have value in consumer education, exploring personalized services, and assisting brand marketing, but it is still retail logic. When business gradually returns to normal and regular business is overwhelming, will distributors still have the energy to continue operating?
This is a question.
In contrast, the second approach, cooperating with third parties (small B) to jointly operate private domain, may have more imagination space from the perspective of the entire channel and business model.
**First, from the perspective of distributors' own development.**
Under the normalization of the epidemic, how will the future develop? Distributors are thinking. In the past, people thought more about whether to introduce new categories or act as agents for a new brand?
Now many distributors are thinking about **how to go down to consumers through terminals?**
This is partly due to the epidemic, but in fact, it is also an inevitable stage of industry development.
On the one hand, channels are fragmented, online and offline are constantly integrating, and consumer purchase touchpoints are everywhere. For many distributors, sticking to traditional business models and just being a relay station is increasingly risky.
On the other hand, the popularization and application of various tools have lowered the threshold for industry digitalization, making it easier for distributors to connect with consumers.
In this case, from serving B to connecting C naturally becomes something distributors think about.
**Second, from the perspective of distributors' own positioning.**
What role do distributors play in the channel chain?
In the past, holding terminals and relying only on distribution could live well. But now distributors must play a service role and do a good job in brand operation services.
**To do brand operation well, it is not enough to just reach terminals; you must be able to achieve effective communication and interaction with consumers.** This is something Mr. Liu from Shenyang thought clearly.
For him, doing private domain is not so much a temporary attempt under the epidemic, but a long-term layout to achieve the goal of becoming an independent brand operator.
**In addition, from the perspective of channel development stage.**
With deep distribution, brands can only reach terminals, which has reached its peak in the pre-digital era. Can we directly connect B-end, open the toC link, and cooperate deeply with brands to achieve digital distribution and sales promotion? This is the problem that bC integration aims to solve.
Cooperating with third parties (small B) to jointly operate private domain is an important part of bC integration. Mr. Liu Chunxiong calls it shared private domain, that is, distributors and small B operate together and share profits.
From the distributor's position, we can also call it second-degree private domain.
No matter what it is called, once the model matures, through the lever of small B, the C-end consumers leveraged will be very considerable, and ultimately become an important sales outlet. This is logically valid.
**5**
Of course, there are many practical issues in jointly operating shared private domain with small B, such as how to formulate a reasonable profit-sharing model? How to find more effective tools to improve operational efficiency?
These need to be solved through exploration.
In fact, should distributors do private domain? At this stage, it is still a controversial topic.
Some industry insiders believe that the vast majority of distributors cannot do private domain. Not only distributors of conventional beverages and food categories. Even distributors in maternal and infant and baijiu categories have consumer reach and operation led by brand owners, who guide distributors to execute private domain step by step.
**The role positioning of distributors determines that they cannot have C-end operation thinking. Distributors' thinking is sales thinking, small B service thinking, and delivery efficiency thinking.**
However, an interesting phenomenon is that the distributors we know who do private domain are, without exception, large merchants with annual sales of over 100 million yuan. Whether in thinking about the future or exploring model innovation, they are the best among their peers.
Of course, compared with other distributors, they are also better in terms of trial-and-error tolerance and long-term patience.
Should private domain be done?
What do you think about this issue? As a distributor, do you have any plans or attempts to do private domain?
Welcome to leave a message to express your views.
**From July 12 to 14, the 2022 (7th) China FMCG Channel Innovation Conference will be held in Chengdu.** At that time, practical mentors from brand owners, distributors, and digital service providers, as well as industry experts, will gather to exchange topics such as **distributor model transformation, BC integration, and private domain**.
If you are interested in these topics, don't miss it!
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