--- title: "The Awkward Transformation of Wholesalers" description: "Since 2015, the traditional industry has faced a sharp downturn due to economic deterioration, e-commerce impact, and rising costs, leading to the notion that wholesalers are useless. This article discusses five transformation paths for distributors, focusing on the diagnostic B2B platform model as a practical solution, and predicts the future competitive landscape for wholesalers." author: "戎尘书生" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2016-08-29" language: "en" canonical: "https://xinjignxiao.com/en/articles/the-awkward-transformation-of-wholesalers-6e3ca056/" markdown: "https://xinjignxiao.com/en/articles/the-awkward-transformation-of-wholesalers-6e3ca056.md" original_source: "https://mp.weixin.qq.com/s/5taOhrZh_K-rQdHQ1Oz4GA" translation: "https://xinjignxiao.com/zh/articles/%E8%B0%88%E6%89%B9%E5%8F%91%E5%95%86%E7%9A%84%E5%B0%B4%E5%B0%AC%E8%BD%AC%E5%9E%8B-6e3ca056.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-awkward-transformation-of-wholesalers-6e3ca056/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # The Awkward Transformation of Wholesalers > Since 2015, the traditional industry has faced a sharp downturn due to economic deterioration, e-commerce impact, and rising costs, leading to the notion that wholesalers are useless. This article discusses five transformation paths for distributors, focusing on the diagnostic B2B platform model as a practical solution, and predicts the future competitive landscape for wholesalers. Since 2015, the traditional industry has taken a sharp turn for the worse... The economic environment continues to deteriorate, e-commerce is impacting, and costs are rising. These three mountains are pressing down on traditional industry players, making it hard to breathe. The new economy is clamoring to remove intermediate links, from factory direct to consumers. The theory that wholesalers are useless has become mainstream, especially for second-tier wholesalers, who are deemed doomed without suspense... Is the survival path that distributors have relied on for many years really about to be broken? Many people are talking about transformation, and there are many opinions on how to do it. I have been reading works by practical experts, and combined with my own thinking, I currently recognize the following five transformation paths for distributors: 1. Product upgrading. 2. Distributors use diagnostic B2B wholesale platforms to simplify procurement and amplify sales. 3. Internal platformization of the company, giving employees entrepreneurial or quasi-entrepreneurial opportunities. 4. Cross-shareholding with core upstream suppliers or core downstream customers. 5. Help retailers attract traffic (traditional retailers must rely on wholesalers to transform), and revitalize retail stores. The transformation paths are clear, but why haven't most people started yet? The reasons are: 1. Most people haven't been exposed to these ideas. 2. Those who have been exposed are still pondering whether these proposals are correct. If not, what is the right way to transform? They can't seem to think of better methods themselves. 3. Looking closely at the five transformation paths, they seem unremarkable. They all seem like clichés, but each one is not easy to implement! Only the second one, using a B2B wholesale website, is quick and not too complex, but it doesn't really solve the customer's pain point: customers can solve ordering problems with a phone call, so why must they log onto your "crappy website"? It's just asking for trouble! So: on the surface, there are five transformation paths, but on closer inspection, none of them work! What to do? At this time, the diagnostic B2B platform model popular among European and American wholesalers comes to China: each buyer logs onto the platform and can know what defects their store has: 1. What products sell well in the entire market but they don't carry? 2. What products have good total profit but they don't carry? 3. What products have fast sales growth but they don't carry? 4. What products have poor momentum and should be phased out, but they haven't eliminated them in time? 5. What products have a high output-to-input ratio but they don't carry? 6. What products have good profit margins but they don't carry? 7. What products will soon be hot sellers but they haven't purchased yet? ... There are many more diagnostic functions, all based on real data, pointing directly at the buyer's shortcomings: Why have I ignored these core business indicators that deserve attention? Despite the many benefits, distributors are still hesitant: thinking of online stores, they think of Alibaba and Taobao. Taobao back then left us with only half a life. We won't trust this thing with the remaining half. I'll never be fooled again! Besides, we don't have time to deal with so many images. How does the diagnostic B2B platform position itself? They say their positioning is: help distributors, amplify the power of wholesalers! They also use a vivid metaphor: **If Taobao is a big wooden hammer that breaks the legs of traditional industry, then the diagnostic B2B platform is a flying tool that makes the legs of traditional industry stronger or even grows wings.** Many images on the diagnostic B2B platform are not as exquisite as those on Taobao. Their explanation is: B2B (experts showing experts) and Taobao (experts showing laymen) have completely different transaction objects and underlying operational logic. On B2B, customers can roughly imagine what a brand's product looks like, for example: Kuangshen basketball, Zhonghua pencil, Hero pen, etc. Everyone basically knows the quality, price, and appearance, so there's no need to spend much time making exquisite images. Therefore, most merchants on B2B do not pursue image quality! Moreover, the platform encourages merchants to share images, descriptions, and product videos with each other (which is absolutely prohibited on Taobao, with severe consequences if caught), saving everyone a lot of work time. B2B does not rely on exquisite images, bragging, or deception, but on the trust foundation built through past cooperation between merchants, trust in known product brands, minimizing the maintenance workload of online stores, presenting real data and everything, and reducing falsehoods! So maintaining a B2B platform store takes only a fraction of the work compared to a similar Taobao store. Alright, alright! Since it's so good, let's use it! But most people can't recruit staff; they can't even find enough regular salespeople. Although this thing is good, it still seems far from me! So, a very small number of distributors will use diagnostic B2B platforms to transform. Smarter distributors will first use it for procurement to observe whether this model is good. If it's good, then they'll do it! Most distributors still think about doing things as before and ignore it. Anyway, they're old, and if business is really bad, they'll just close down... Age, mindset, foundation, and other factors determine that everyone acts differently. How many distributors can successfully transform and survive this wave of internet impact is still a big unknown! So some people predict: the ultimate competitive landscape for distributors in many industries will emerge in 6-8 years. **Valuable surviving wholesalers: about 30 or more per provincial market per industry (varies slightly by industry); 2-3 in prefecture-level markets (same as above); 1-2 in county-level markets (same as above).** Prefecture and county wholesalers face difficulties; their opportunity lies in: arming themselves with platforms, implementing a platform visit-sales + delivery model. Intensive cultivation, dominating the local market, quickly seizing market share from peers, thereby bringing the local endgame early. Various voices discuss the end, retreat, and way out for the distributor group... Everyone says different things, opinions vary, and it's all a mess! **Distributors: in an awkward transformation period, it is ongoing...** -END- The best FMCG distributor learning platform in China Dedicated to providing professional, practical, and actionable 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 the 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 18 skills | **013** KA operation methods and strategies | **014** First lesson for new salespeople | **015** Internet, brands | **016** Distributor B2B transformation | [Long press QR code to follow] --- ## Copyright and AI use This article is sourced from New Distribution. 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