Summary: Alibaba and JD.com entering B2B e-commerce has made many distributors worry: will middlemen be replaced? Will second-tier distributors disappear? My answer is: rest assured, they will not disappear. Distributors are irreplaceable. One of the values of distributors is that in many things, they can achieve goals more efficiently than manufacturers. ...

Alibaba and JD.com entering B2B e-commerce has made many distributors worry: will middlemen be replaced? Will second-tier distributors disappear? My answer is: rest assured, they will not disappear.

Distributors are irreplaceable

Distributor Value #1

In many things, distributors can achieve goals more efficiently than manufacturers.

In the manufacturer-distributor game, many distributors believe their core value lies in their downstream network and social connections, which is also the trump card they use to challenge manufacturers. In fact, saying manufacturers absolutely cannot do these things is overestimating oneself.

When the channel advocated intensive cultivation and deep distribution, capable manufacturers had already proven with action that developing outlets is more efficient for manufacturers than for distributors; as for social connections, as long as you are willing to spend money, who can't make a few friends?

So, when distributors play the game with manufacturers, using their downstream network as a threat and social background as endorsement, it's fine for verbal sparring, but if it comes to real action, distributors will definitely suffer. Therefore, rational distributors do not tell manufacturers that only they can do the job, but rather make manufacturers understand: you can do my job, but you definitely won't do it as well as I do. Remember, downstream networks and messy social connections are not exclusive.

So, the first core value of distributors is comparative value, not absolute value. Next time you take a manufacturer's salesperson on a market visit, you won't say: "Look, Lao Zhao and I have the best relationship; I don't worry about stocking any amount, and collecting payment is just a phone call away!" Instead, you should say to the salesperson: "From Changsha to the townships under Li County, my per-piece freight cost can be as low as 3 mao 2; the cheapest logistics company currently charges 6 mao 5 per piece. If you manufacturers did it, how much would it cost?"

Distributor Value #2

Being able to represent consumers in negotiations with manufacturers, becoming the representative of regional market consumers.

Many distributors, having delved too deep into street-smart tactics, have basically forgotten this value mission.

Manufacturers, distributors, and consumers form a stable triangular relationship. When one party grows too powerful, the other two can join forces to check the third, especially the alliance between distributors and consumers, as the sum of two sides of a triangle is greater than the third side. When a conflict arises between a manufacturer and a single consumer, the manufacturer can abandon that consumer, but it cannot easily abandon a distributor that gathers many consumers. The role of the distributor is to neither let the manufacturer act arbitrarily nor let consumers go too far.

We see many consumer complaints where distributors directly refer consumers to manufacturers, partly to save themselves trouble and partly to avoid getting involved. In the end, the manufacturer faces the consumer alone, and the manufacturer is happy to play tai chi, dragging the consumer until they are exhausted. The resentment remains in the regional market and will eventually fall on a specific distributor in that market, and in the end, the distributor suffers.

Distributors are too small as individuals and lack risk resistance, which is the main reason they give up representing consumers in negotiations with manufacturers. More importantly, being a consumer representative seems to offer no profit. Now that the internet has arrived, if distributors do not focus on developing consumer membership systems to change the past situation of selling one order at a time; if they do not use the internet to build regional community interaction systems, such as irregular community activities with consumption themes; if they do not use the long-tail low-cost effect of the internet to become the true voice of consumers in the regional market, then being removed by manufacturers is only a matter of time.

Distributor Value #3

Using professional ability to screen products and reduce consumers' purchase risk.

This is also the main reason I have always opposed WeChat business. Everyone has the need to buy, but not everyone has the qualification to sell.

When Taobao rose, it was a bit of a gray area; now WeChat business is rehashing leftovers, which can only be said to be making money without using much brain.

I have always emphasized that professionals should do professional things. The so-called sharing economy is about sharing the spare time or idle resources of professionals, so that the services consumers enjoy do not become distorted. It is not about using the superficial skills of non-professionals to make consumers make do.

This is like everyone has the ability to speak, but to speak wittily, eloquently, and make people willing to spend money and time to sit and listen, to earn a living by one's mouth, requires ten years of hard study; otherwise, my friend, you'd better find another job!

When consumers buy most products, they lack professional judgment. And the manufacturer's assurances are not enough to guarantee they won't abandon morality for profit. Distributors, having been immersed in the industry for years and making a living from it, have sufficient professional ability to expose those manufacturers with "a golden exterior but a ruined interior."

Having distributors with professional sales qualifications screen products actually reduces consumers' purchase risk. However, many distributors have given up improving their professional abilities, doing whatever makes money, whatever makes money fast, forgetting the original mission of distributors, and only wanting to profit from both ends, which naturally ends up pleasing neither side!

All distributor businesses must return to value itself; otherwise, what difference is there between you and a Taobao store or WeChat business?

Distributor Value #4

The monk may run away, but the temple remains; distributors are the credit collateral and quality guarantee of the regional market.

After 2010, most physical stores complained that business was hard and e-commerce impact was too great. The reason is that offline distributors were brought to another stage by online stores, where all the rules of the game were set by online stores. Offline physical stores were completely passive and beaten; how could they compete?

China has the saying "century-old store," which mostly refers to the front shop and back factory, an integrated manufacturing and sales entity. Such old stores have reputation and prestige; companies cherish their brand like birds cherish their feathers. Consumers recognize the brand's accumulation and precipitation in the local area and believe it won't be a "basket-carrying" business that moves after one shot.

However, because production and sales functions are not separated, such enterprises find it hard to grow big. In a fully competitive market environment, the integrated production-sales model is particularly inefficient, which is the historical reason for the birth of the distributor group.

In other words, distributors are separated from the manufacturer's functional system. So distributors must understand: which part of the "century-old store" function do they share? China is a country transitioning from a society of acquaintances to a society of strangers, but the acquaintance economy is rooted in the bones. Physical stores in regional markets are indeed meant to bear the credit collateral of acquaintances and the quality guarantee of physical stores.

"If I cheat you, even if this 3,000 yuan is all profit, how many 3,000 yuan does my investment in this physical store amount to? I can deceive you for a moment, but not for a lifetime; the monk may run away, but the temple remains. If I really cheat you, we'll see each other often in this county town; if you speak ill of me to others, how can I do business in the future? Is it necessary for me to take such a big risk just to earn your 3,000 yuan? Rest assured, if you buy anything from me, I can't run away; my store sign is hanging there, that's my face!" This is a scene I witnessed where a store distributor, after collecting payment, was earnestly "brainwashing" the consumer.

Source: China Beauty (ID: cctop100)

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