Author|Liu Chunxiong Source|Liu's Forum (ID:liuchunxiong1964) A B2B platform executive posted on social media that they would open self-operated stores, another B2B peer commented that the pitfalls are getting bigger, and I added that they are filling small pits with big ones. I am not familiar with this B2B platform and bear no ill will; I am just commenting on the matter. In the first half of 2017, B2B platforms hit a bottleneck, and I believe that in 2016, most B2B platforms were constantly digging pitfalls. 01 Let me analyze how some platforms dig pitfalls. Most B2B platforms initially aimed to do matchmaking, which was the situation in 2015. But in 2016, they fully shifted to self-operated, so much so that B2B expert Zhao Bo repeatedly said in groups that "the matchmaking logic is not feasible." Entrepreneurs initially had no funds, so starting with matchmaking was most suitable for their actual situation. The reversal typically occurred after entrepreneurs obtained financing. B2B matchmaking is extremely difficult. Matchmaking with manufacturers? Why would manufacturers trust you? Matchmaking with merchants? Merchants are the most suspicious, making cooperation hard to achieve. Since matchmaking is difficult and they have funds, isn't it reasonable to do self-operated? In some industries, such as leisure food, ingredients, stationery, frozen products, and condiments, due to low industry concentration, weak brand power, and overly long channels, there is indeed room for self-operated. However, the channel hierarchy in FMCG is basically already optimal, so doing self-operated is essentially playing the role of a second-tier distributor. Self-operated may be the first pitfall in FMCG B2B. This article mainly discusses the B2B model in the FMCG industry. Believe it or not, we will draw conclusions in a few years. 02 **The wishful thinking of self-operated B2B is to "integrate the supply chain with traffic." Teacher Fang Gang said: B2B cannot replace marketing attributes. Integrating the supply chain with self-operated is essentially replacing distributors. If this statement were told to channel experts, they would not believe it, but capital believes it. Capital, which "started with C-end thinking," believes in traffic. To increase traffic, B2B platforms, without having validated their model, had to develop more markets. With more markets and more traffic, capital seems easier to obtain. But the platform is hanging by a thread, because if capital hesitates even slightly and funds are not connected, all markets will collapse. This is the second pitfall of B2B: running traffic without validating the model. 03 Although traffic increased, it was diluted across multiple markets. Once traffic is diluted, delivery becomes difficult. Delivery costs do not depend on traffic, but on order density and average order value. This means that the more "local strongmen" you are, the lower your delivery costs. As mentioned earlier, self-operated is like a second-tier distributor, and the secret for second-tier distributors to get orders is low prices. To achieve order density and average order value, you need heavy promotions and burn a lot of money. Moreover, burning money still has no stickiness. This is the third pitfall of B2B platforms. 04 How to increase order density and average order value without "burning money"? Some thought of terminal integration. Some call it terminal integration, others use the new term "franchised stores." I think the term "franchising" is very vivid; it reminds me of Qing dynasty dramas. Before B2B appeared, small terminals had already been "franchised" by countless manufacturers. Would they care about being franchised again? Look at the storefronts of small shops; whoever pays gets their brand hung. Wei Zhe once said, B2B is rational. Since the goods are the same, of course you buy from whoever is cheaper, and you won't stay loyal just because of franchising. This is the fourth pitfall of B2B platforms. 05 To solve the stickiness problem of franchised stores, some thought of "terminal sales promotion," which is quite clever. In other words, using C-end methods to solve B-end difficulties. In the early days of B2B, I had this idea. I called it "using R (retailer) 2C to solve B2B problems." After a while, I gave up. Not because the logic was flawed; the logic was fine. The key is that everything has a timing issue. The timing for R2C success may be after B2B. Wanda's Feifan.com is currently the largest R2C in China. I think one reason it is not successful is that the timing is not right. To use an analogy, it's like raising a grandson before raising a son. So, using R2C to solve B2B problems might be the fifth pitfall of B2B. Of course, maybe my judgment on the timing of R2C is wrong. 06 "Franchised stores" are difficult, so some simply do "self-operated," as nothing is more sticky than self-operated. Since you are doing self-operated, it has nothing to do with B2B, unless you treat retail as a strategic business unit (SBU). Using self-operated to save B2B is impossible. To use an analogy, this is like using retail to solve wholesale problems. The volume of wholesale is too large. If retail could solve wholesale problems, the main business would not be B2B but retail. This is the sixth pitfall of B2B platforms. 07 Not everyone has fallen into all six pitfalls. Don't be afraid of pitfalls; success is about filling them, but it depends on whether you have the ability to fill them. Don't be afraid of filling pits; just be afraid of filling small pits with big ones, one after another. The reason B2B platforms have so many pitfalls in a short time is that everyone is too impatient and wants to run out quickly. In fact, B2B is not like C-end where one player dominates, nor does it extend across industries like C-end. Once you fill the first pit, there won't be so many later. -END-