1 “ Self-Operation Down Platform fulfillment costs are extremely high; burning money cannot buy operational efficiency Currently, all self-operated FMCG platforms in China face a common problem: the fulfillment cost for orders in the extremely low-margin FMCG industry is too high, and logistics is like a bottomless pit that eats up all platform profits. Take first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen: the fulfillment cost per order for third-party logistics is about 20-30 yuan per order (600 yuan per truck), but the average order value is generally 500-1000 yuan per order (about 10,000-20,000 per truck). This means the delivery cost rate per order reaches 2-4%. If you add the fixed costs of warehouse backend, the fulfillment cost per order exceeds 8-10%. What does 8-10% mean? The average gross margin in the FMCG food and beverage industry is only about 15%, so logistics alone can eat up most of the product profit. Moreover, self-operated platforms generally find it difficult to obtain agency rights for A-class products, meaning the average gross margin on goods purchased from second-tier distributors is only about 4-6% at best. To cultivate small stores' habit of ordering online, platforms typically offer 3-5% promotional discounts to stores. Therefore, self-operated platforms delivering small orders to small stores basically lose money on every order; the more they deliver, the more they lose. Some might ask: why can Yishang achieve a delivery cost rate of about 3.5%, while other platforms cannot? Because Yishang is purely logistics; all distributor orders cooperating with Yishang in the local area are delivered by Yishang. If they only delivered low-value heavy goods like mineral water and beverages, it would be impossible to achieve logistics costs below 7-8%. However, a large number of high-value goods help raise the total value per truck. Additionally, order density is much higher than typical platforms. So overall, despite lower charges, through scale logistics and refined operations, they can compress overall logistics costs to about 3.5%. But self-operated FMCG B2B platforms cannot match Yishang's logistics system in terms of order scale, order value, or order density. Therefore, it is extremely difficult for self-operated platforms to achieve Yishang's logistics delivery cost rate. So, can they eliminate distributors, obtain agency rights, or profit through product mix? I think achieving this is very difficult at present. First, self-operated platforms mostly lack the ability to independently promote new products from first-tier brands. Unless a first-tier brand truly cannot find a distributor in certain markets, no company will easily grant product agency rights to a self-operated platform. Moreover, in terms of cooperation, large manufacturers prefer a monogamous relationship: if the platform sells their products, they don't want the platform to promote other new products, which conflicts with platform operations. In summary, self-operated platforms will eventually become super second-tier distributors in regional markets. How should this super second-tier distributor profit? With such high operating costs, self-operated platforms have almost no chance of achieving profitability through scale orders of A-class products and efficient operations. As for supply chain finance, that is a consideration for later. I think for self-operated platforms to truly profit, they ultimately need to control store procurement downward, reduce mutual gaming, and avoid the current situation where stores only buy cheap goods, don't promote or stock up, or buy from whoever offers the biggest discounts. Through deep trusteeship of convenience stores, they can make stores accept goods at prices not lower than or slightly higher than market prices. By optimizing and upgrading terminal stores, they can generate price premiums through quality service, thereby achieving a virtuous cycle in the supply chain. Yes, that is the Meiyijia model. If self-operated platforms do not control store procurement, they cannot make stores stock A-class goods at relatively higher costs. Then there is no healthy turnover, and they will eventually be bled dry by logistics that never profits. But controlling store procurement requires providing corresponding value to stores. Of course, retail is also a deep industry, and profiting in it is not easy. In short, China's consumer goods distribution field is characterized by extremely high costs and extremely low profits. Without squeezing the entire supply chain to the bone, making money is indeed not easy. 2 “ Matching Up Having discussed self-operation, let's talk about matching. For FMCG matching platforms, the book profit point lies in charging transaction commissions. However, the current problem is that platforms cannot move existing transactions online, or existing transactions are unwilling to let the platform charge commissions. Moreover, both ends of customers have stable, long-term one-to-one supply relationships. Once transactions stabilize, order skimming occurs. So, if self-operated platforms lose money, matching platforms simply cannot move existing (A-class) products online. Since matching platforms do not touch goods, they cannot control procurement. Therefore, all matching platforms opening convenience stores is not an optimal solution. For matching platforms, the downward path is personally not viable. The true value of matching platforms lies in industry restructuring: by restructuring original processes and interaction methods in information, transactions, logistics, and capital, they can achieve efficiency improvements and cost reductions. Because matching platforms are light enough, they have the potential for rapid national expansion. Through ground promotion or third-party partners, they can install the app on the phones of small and medium store owners nationwide. Then, they help small and medium-quality brands that lack the strength to build national distribution networks use the app to display product information directly to store owners, achieving large-scale brand awareness. Finally, through third-party warehousing and distribution, orders are delivered to designated stores. This process involves restructuring existing commercial distribution. Alibaba is using this method to restructure the FMCG industry: by building warehousing and distribution systems through third-party city logistics, letting manufacturers join the platform, and having city partners assist with product placement and promotion, ultimately enabling small and medium brands to achieve large-scale, low-cost, and rapid distribution. Of course, not only Alibaba; Zhanghe Tianxia's Cloud Factory also cooperates directly with manufacturers and uses local service stations to quickly penetrate products into small and medium stores. Any industry revolution starts with rapid efficiency improvements. The application of technologies and models such as scale order processing, big data, supply chain finance, and unified warehousing and distribution will bring a leap in efficiency to the entire FMCG supply chain. The impact on the FMCG supply chain is more like a disruptive revolution. I believe that in the near future, China's mainstream FMCG supply chain will definitely be an efficient operating system supported by technology, centered on efficiency, led by data, and based on finance. -END- The best FMCG distributor learning platform in China Focuses on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Sales | 015 Internet, Brands | 016 Distributor B2B Transformation | [Long press QR code to follow]