For manufacturers, traditional distributors are like a chamber pot, and distributors are willing to play that role. For years, the chamber pot has accompanied manufacturers through endless nights, as manufacturers have always been 'kidney-deficient' and needed it every night. But one day, the internet's 'hormones' cured the manufacturers' deficiency, and the frequency of using the chamber pot decreased, making the chamber pot anxious.

Distributors' anxiety is not unfounded: they have no products, no brands, no markets—everything belongs to others, making them seem like 'people with nothing.' But does that mean distributors have no value? Obviously not. What is the value of distributors? Just three words: supply chain. So, how do distributors relate to the supply chain? Let's take a look.

1. Distributors play with capital flow: Centralized procurement, buying in bulk at lower prices, then selling separately—essentially a wholesale-retail model based on capital.

2. Distributors play with logistics: Large volumes of goods mean lower logistics costs, and the two ends of transportation are relatively fixed: from the factory to the warehouse, then from the warehouse to retail stores.

3. Distributors play with information flow: They know about manufacturers' distribution meetings; others can't know, don't need to know, and even if they know, it's useless because they can't achieve the volume.

In essence, distributors exploit 'four asymmetries': volume asymmetry, capital asymmetry, logistics asymmetry, and information asymmetry. Conversely, it is precisely these four asymmetries that distributors resolve, creating value for both upstream and downstream and solving this contradiction. The supply chain, after all, is about four flows: commercial flow, capital flow, logistics flow, and information flow. Whether you can achieve 'integration of the four flows' depends on your skill.

Of course, distributors also do many 'dirty laundry' tasks for manufacturers: who else will absorb inventory pressure, take the blame, or do year-end report padding? Those accustomed to lazy habits won't adapt to DIY; those used to having cars and drivers will find it hard without them. In fact, in the past, manufacturers also ran the distributors' households, and the distributors' supply chains were managed behind the scenes by manufacturers. Distributors simply obeyed and made money. If your product is not good, that's another story.

However, as long as standardized mass production exists, distributors will not disappear, though their numbers may decrease and the layers may shorten. In B2B business, going upstream means vertical integration, and going downstream means diversification. If you go upstream without vertical integration, you won't have enough money or energy; if you go downstream, you need diversification, otherwise you can't survive because the average order value is too low.

From the perspective of this round of retail e-commerce, it has indeed caused great trouble for distributors, even threatening their survival. The reason is that the internet, on the basis of solving information asymmetry, has integrated distributors and retailers, merging their functions. This has greatly transformed or even reconstructed the supply chain based on product distribution, with a strong impact. Currently, self-operated e-commerce has a far greater impact on traditional distributors than platform-based e-commerce. This is because self-operated e-commerce achieves better coordination in supply chain aspects such as inventory planning, inventory fill rate, order lead time, inventory turnover, logistics delivery efficiency, and cloud warehousing, and it avoids issues like profit redistribution and internal conflicts.

Balancing supply chain cost and timeliness is the core of the core, and this is where retail e-commerce and traditional distributors compete. Since the traditional product distribution chain is too long, with multiple layers after several cuts, new B2B-type distributors have emerged. The original 'duet' relationship has become a 'three-way drama.'

Traditional distributors were just hit on the head by retail e-commerce, and as they staggered to their feet, they found that retail e-commerce also isn't making money. So they lamented: 'If you're not making money, why did you drag us down and make us lose money too?' Before they could fully recover, their fellow distributors also rose up, starting B2B operations and insisting on recruiting them, threatening: 'Either be revolutionized by them, or join them to revolutionize others.' How did they suddenly become Lu Junyi in the Water Margin? Alas, distributors have a hard time: 'This era is crazy, walls of Chu songs on all sides, internet people are all wolves, if you don't fight back, you'll be forgotten, so just follow the internet, become outlaws, and be kings.'

Of course, among traditional distributors, some chamber pots have turned into golden ones. Since last year, Wuliangye has launched a distributor shareholding plan: According to reports, based on Wuliangye's announcement, among the five targeted placement recipients, Junxiang Wuliangye No. 1 will subscribe to no more than 18 million shares in cash, with funds not exceeding 420 million yuan. Among the subscribers of Junxiang Wuliangye No. 1, distributors such as Beijing Chaopi Trading, Yinqi Group, and Shenzhen Eternity Supply Chain are prominently listed. It used to be just a romance, but now it seems there's a possibility of marriage.

Will continue another time...

Source: Shenzhen Supply Chain (ID: lihaiping56)