---
title: "The Second Path for Distributor Transformation: Embracing B2B Platforms, Thriving Under the Big Tree"
description: "As business becomes increasingly difficult across the entire trade and distribution sector, distributors are seeking transformation. Beyond the three common paths, some are now partnering with national B2B platforms like JD New Channel's Joint Warehouse, gaining extra income, improved management, and expanded business opportunities."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-01-19"
categories: "Dealer Operations, Supply Chain & B2B"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/MvLlZwFwaSuogZPV3eesVQ"
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citation: "袁来. “The Second Path for Distributor Transformation: Embracing B2B Platforms, Thriving Under the Big Tree.” New Distribution, 2020-01-19. https://xinjignxiao.com/en/articles/the-second-path-for-distributor-transformation-embracing-b2b-platforms-t-d5a4c214/"
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---

# The Second Path for Distributor Transformation: Embracing B2B Platforms, Thriving Under the Big Tree

> As business becomes increasingly difficult across the entire trade and distribution sector, distributors are seeking transformation. Beyond the three common paths, some are now partnering with national B2B platforms like JD New Channel's Joint Warehouse, gaining extra income, improved management, and expanded business opportunities.

It is now a consensus across the entire trade and distribution sector that business is becoming increasingly difficult. With the economic downturn and the disappearance of demographic dividends, brand manufacturers are also entering a phase of slow or stagnant growth.
Against this backdrop, more and more distributors are seeking transformation and upgrading, adjusting their distribution methods. Previously, New Distribution reported on many excellent distributor transformation cases, but they generally fall into three categories:
**First, focusing on a single top-tier brand,** deepening cooperation, and through refined distribution, seeking efficiency from management, transforming into brand distributors; **Second, focusing on a specific category,** such as snacks, condiments, etc., through a multi-brand matrix, establishing a category supplier in the local market; **Third, centering on small stores,** extending multiple categories to become a full-category distributor.
These are the three common ways of transformation and upgrading. Of course, not only these, in the new era, New Distribution has found that some distributors are trying to actively embrace new supply chain B2B platforms. By cooperating with platforms, they become local service providers for the platform, which is gradually becoming a mainstream trend, and they have also gained considerable benefits from this round of cooperation.
The three transformation cases introduced today are about achieving a comeback and transformation in distribution business through cooperation with JD New Channel's Joint Warehouse. I hope these cases of cooperation with third-party national B2B platforms can provide readers with some inspiration and food for thought.
Before presenting the cases, let me briefly introduce what the JD New Channel Joint Warehouse project is.
In March 2018, JD New Channel announced the opening of new channels, introducing the role of distributors/wholesalers, and launching the Joint Warehouse project. The Joint Warehouse (cooperating distributors and wholesalers) undertakes the delivery of some self-operated orders from Zhanggui Bao within their coverage area, and also opens their own stores on JD Zhanggui Bao, becoming suppliers to JD Zhanggui Bao.
In this process, distributors and wholesalers become partners of New Channel, not only gaining additional "agency delivery" income, but also opening stores on JD Zhanggui Bao, and accessing New Channel's "agency" and "consignment" businesses, achieving a broader source of business.
**-01-**
**Business personnel's extra income rises from 200 yuan to 2000 yuan**
Zhang Huixiang, the owner of Deyi Non-staple Food Wholesale, started his distribution business in 2010, representing a single dairy brand. He currently has 11 employees, mainly distributing in the urban area of Linfen and surrounding townships and rural markets.
Mr. Zhang told New Distribution that around 2018, business in this traditional industry became increasingly difficult. For distributors like him who deliver to township and rural markets, distribution costs are very high. Around May 2018, by chance, he saw JD New Channel recruiting joint warehouses, so he proactively contacted the regional manager of New Channel to discuss cooperation.
The cooperation was a bit "bumpy" at the beginning, due to the cognition of small store owners and delivery personnel (vehicle sales, delivery plus sales) regarding online transactions. Mr. Zhang said that previously, delivery personnel would deliver goods, collect payment, and leave, and both store owners and employees were accustomed to this. But now, store owners have to pay first, and then delivery personnel deliver; delivery personnel also don't collect payment on the spot, feeling uneasy.
But Mr. Zhang persisted, even proactively going to the market to teach store owners how to use the Zhanggui Bao APP. He recalled that after the end of 2018, New Channel opened the "agency delivery" business, and then in April 2019, opened the "agency" (joint warehouse becomes a third-party agent for JD New Channel's self-operated products) and "consignment" (high-stickiness joint warehouses use their own personnel as a distribution team for New Channel's self-operated products) businesses. This significantly increased the income of delivery personnel. With additional commissions plus normal milk sales commissions, their income is much higher than that of local peers.
According to Mr. Zhang, business delivery personnel have gone from an extra income of 200-300 yuan per month at the beginning to 2000-3000 yuan per month now, which is considered a high salary in the local county market. Some business personnel can earn over 10,000 yuan in good times, and the company's staff turnover rate has greatly decreased. Not only that, this has also brought an extra income of over 20,000 yuan per month to the wholesale department.
In addition to the increase in income, when talking about changes in business, Mr. Zhang told New Distribution that there are two points in the cooperation with JD New Channel that have the most obvious impact on his business changes:
First, the richness of products has increased customer stickiness. With more products, employees can increase visit frequency, and the sales of his own distributed products have also increased. In 2019, sales increased by more than 30%;
Second, the "transparency" of management. In the past, employees would leave with a truckload of goods, maybe deliver to two or three stores and then go back to rest. Mr. Zhang had no idea about visit frequency, customer relationship maintenance, etc. Now, through the use of the "JD Ground Service" APP, Mr. Zhang can see in real time what employees are doing, where they are doing poorly, and adjust daily. This is very helpful for the management of sales personnel.
Efficient personnel management and product richness bring about stronger relationships between distributors and stores, which in turn brings business growth. These are the changes brought by embracing JD New Channel to the joint warehouse.
**-02-
**Leveraging the "JD" brand to enhance local influence**
Zhonghe Huichuang Supply Chain Company was established in 2016. The owner, She Yi, told New Distribution that he used to run convenience store businesses, with nearly dozens of directly operated and franchised convenience stores. At that time, to consider internal centralized procurement, he established a supply chain company. In the following two years, the company successively represented brands such as Pepsi, Luhua, and Unilever, and in low-tier cities like Guang'an, it could achieve annual sales of 20 million yuan.
She Yi, the owner of Zhonghe Huichuang Supply Chain Company
He got involved with JD New Channel in August 2018. Mr. She frankly said that his original intention was to "hug the big tree," leveraging the big brand to continuously enhance local influence.
After nearly 6 months of running-in, Zhonghe's business added 100,000 yuan in monthly income. Of course, besides the increase in income, JD New Channel also brought other changes:
1. Faster payment collection, effectively reducing capital pressure. In the past, terminal store payments were usually settled monthly or weekly; now, through the JD Zhanggui Bao APP, they are gradually guiding store owners to pay before delivery;
2. The "brand effect" of the agency delivery business. Originally, they only delivered to their own stores; later, they gradually started the "unified warehouse and distribution" business, delivering for other local wholesalers and distributors. When they cooperated with JD New Channel and became a joint warehouse, the past concerns of wholesalers about Zhonghe's strength were completely dispelled.
3. Improved ordering efficiency. In the past, stores used handwritten orders, which business personnel would bring back and submit to the warehouse the next morning, and the warehouse would then organize and prepare the goods. Now, stores can order directly through their phones, or business personnel can place orders on their behalf. The warehouse receives the order information and immediately organizes the goods. In some places, delivery can now be done within 8 hours.
Mr. She said that these were things he hadn't expected. The benefit of embracing the platform is being able to use the latest technological tools and the most advanced business methods, which is greatly beneficial for traditional distributors.
**-03-
**Enlarge the cake, increase stickiness, improve customer relationships**
The third case is Guo Jing Rice Industry, which is both a brand owner and a distributor in the Shenzhen area. The general manager, Ge Peng, is a second-generation successor. Ge Peng told New Distribution that around May 2018, Guo Jing Rice Industry began cooperating with JD New Channel, being both a joint warehouse in the Shenzhen area and a brand partner of JD New Channel.
In the past, Guo Jing Rice Industry's distribution in Shenzhen was difficult due to a single category, making it hard to expand outlets, and in a super first-tier city like Shenzhen, it was difficult to do direct-operated outlets. After cooperating with New Channel, Guo Jing Rice Industry, together with regional distributors, did agency, consignment, and agency delivery businesses, jointly operating direct outlets.
In a city like Shenzhen, distributors often find it difficult to fully cover an area, so New Channel works with local distributors and sub-distributors to enlarge the cake. The full-category operation of JD Zhanggui Bao can increase the stickiness between channel providers and stores, improve customer relationships. In this process, Guo Jing Rice Industry also achieved business diversification and improved operational efficiency.
**-04-
**Each takes what they need, win-win cooperation**
The above three cooperation cases, in the view of New Distribution, are "each takes what they need, win-win cooperation." For JD New Channel, it fully leverages the warehousing and distribution service resources of local distributors, avoiding repeated investment, making the distribution chain more efficient and economical; for distributors, through JD New Channel, while serving their own distribution and warehousing, they release resources and maximize benefits.
Distributors can gain additional distribution income, enabling better order density for their existing resources and improving cost efficiency; when expanding distribution categories, they can smooth out peak and trough seasons, increase order breadth, better serve small stores, and enhance business stickiness with stores.
Of course, in this process, JD New Channel's warehousing and distribution management capabilities, technology, operational efficiency, and even its ground service management can be exported and empowered to distributors. Distributors gain not only business opportunities but also the ability to improve management efficiency.
**Conclusion:**
In the past, distributor development often focused on manufacturers, channels, and terminal outlets. Few distributors looked at external changes, what changes were happening in the industry, especially the emergence of new supply chain systems.
When a "new species" appears and develops, there must be a reason and value for its existence. What distributors should do is actively observe and research, rather than reject or even resist.
In fact, the advantage of distributors is localized service and distribution capability, while the advantage of national platforms is the application of new technologies and the ability to scale distribution. The two can integrate with each other, complement each other's strengths, and use the platform's new technologies and methods to continuously expand their own business territory.
Only when resources and capabilities match can efficiency be maximized. Win-win cooperation is the way of business.
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## Citation metadata

- Publisher: New Distribution
- Author: 袁来
- Published: 2020-01-19
- Canonical: https://xinjignxiao.com/en/articles/the-second-path-for-distributor-transformation-embracing-b2b-platforms-t-d5a4c214/
- Original source: https://mp.weixin.qq.com/s/MvLlZwFwaSuogZPV3eesVQ

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