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With PC internet, mobile internet, e-commerce, big data technology, and other new technologies and platforms, consumer behavior, business operations, and business models are undergoing profound changes. The transformation of traditional channels is also inevitable.

First, let's look at how the traditional distributor community will change.

1. More distributors are thinking big, starting small, and infusing internet thinking.

Don't mock that "internet thinking" has become a cliché used for showing off. In the process of the internet changing the world, work, life, and commerce, business forces in China and worldwide are all feeling their way forward.

Although the dust has not settled, any internet-like thinking, behavior, or practice that can make traditional business more efficient and effective can be called internet thinking. We need to start small and use it pragmatically.

1.1 Mobile internet is closely integrated with meticulous channel sales behavior.

For example, introducing handheld terminals (phones) with functions such as mobile ordering, visit tracking, and GPS positioning. Salespeople can record how many stores they visited on their sales route, how many SKUs they distributed, and how many orders they took—orders are transmitted to the backend in real time, and the system immediately generates rankings of each salesperson's visit terminals and order quantities. Who is good or bad, who is diligent or lazy, is clear at a glance. The traditional monthly evaluation and performance management system can now be broken down to daily units. This smaller unit, like a day, forms a smaller process control module that is easier to manage and less prone to errors. The warehouse can also prepare and pick orders immediately based on the orders—note, this is like the backend sorting center of an e-commerce company.

This will greatly improve the distributor's operational efficiency in logistics distribution, order fulfillment rate, and personnel productivity.

1.2 Backend sorting, separating people from vehicles.

Previously, we used a vehicle sales model: one vehicle, one driver, and one salesperson (sometimes the driver doubled as the salesperson). On the sales route, wherever the vehicle stopped, they would ask the store or stores whether they wanted to order or replenish. Or, they would first call the stores from a previously collected store database to confirm demand, then arrange vehicle sales... Because orders and the specific SKU items within orders were not clear, costs were high, efficiency was low, and accuracy was poor.

Now, with people and vehicles separated, salespeople use mobile ordering systems to take orders in the front. As order data is transmitted to the backend in real time, the warehouse sorting center backs up orders, prepares orders, sorts and packs the goods for Zhang San, Li Si, Wang Er Mazi, etc., and labels them before delivery. Based on route planning, the goods to be delivered first are placed at the back of the vehicle—the vehicle follows the salespeople, efficiently delivering along the way.

This is progress!

2. A large number of traditional distributors will transform into service-oriented enterprises focused on offline execution.

Whether it's companies that do their own logistics and distribution or those that entrust traditional third-party logistics, they all face this dilemma: in the e-commerce era, a pair of socks worth a few yuan on Taobao can be delivered within 24 hours, and from the moment of ordering, the processing status is clear, even allowing self-set delivery times down to the day and hour... In contrast, we spend no less on logistics and distribution, but we lose goods and suffer damage. Why can't we achieve that?

What I mean to say is: traditional enterprises will not only soon say goodbye to the traditional logistics companies they are still cooperating with, but in the near future, they will also say goodbye to those distributors that have transformed into logistics and distribution providers, or those that only have warehousing, logistics, and distribution functions but still take the full distributor margin and full rebates.

Distributors who have been trying to transform for years will face a new transformation—toward service-oriented distributors focused on offline execution, such as those with promotional and publicity capabilities, or those capable of delivering to consumers' homes.

3. Traditional distributors will compete more with terminal stores.

Even if traditional distributors transform into service-oriented distributors for offline execution and organize "express-style" delivery teams, they will find that the numerous community supermarkets, convenience stores, and other terminal stores are competing with them for business—and they have advantages such as nearby delivery and even consumer self-pickup.

To achieve this transformation, traditional distributors must first break the old and establish the new, by integrating, acquiring, or cooperating with competitive stores to improve their competitiveness in the new distributor role.

4. A large number of traditional distributors will disappear.

Consumers' online shopping on PC or mobile devices can be understood as placing orders via the internet. Extending this to terminals placing orders directly with enterprises via the internet is not a difficult or distant future.

Now, terminals and consumers can place orders directly with manufacturers via the internet. Why do we need so many middleman distributors to share the spoils and count money?

Therefore, a large number of traditional distributors will disappear as a result.

5. More distributors are engaging in online distribution and starting O2O practices.

By-Health has never authorized any online distributor to sell any of its products, but on Alibaba's Taobao and Tmall, a quick search can find thousands of online merchants selling By-Health products. Rough estimates put these sales at around 30 million yuan. Friends, this was in 2011, when By-Health's total sales were just over 300 million yuan.

Where did the 10% of By-Health products sold on Taobao come from? Offline distributors! That is, in fact, a considerable number of our distributors, especially the new generation, have almost innate business intuition and acumen, sensing changes in life and business, and taking the lead in laying out and practicing on e-commerce platforms—this "taking the lead" is even ahead of upstream enterprises or without their permission.

Now, many traditional distributors have tasted the sweetness of embracing the internet and e-commerce, and some have even shifted their business focus to online distribution and building their own e-commerce brands.

Proactively embracing and practicing change, as well as the successful demonstrations and guidance of pioneers, will also lead more distributors to become e-commerce operators and new-type distributors that integrate online and offline.

Having done offline for years and now online, if these distributors also build a "2" in the middle, O2O-type distributors will appear more around us.

However, it is worth noting that the distributors transforming in this direction are mostly new-generation distributors, or the children and successors of old distributors. Many traditional distributors who are middle-aged or elderly find it difficult to adapt to this change, whether in vision, entrepreneurial spirit, or innovative practice.

6. With transformations different from the past, the distributor community is experiencing new differentiation.

Ten years ago, the distributor transformation we discussed was: transform upward—into manufacturing, making their own products, or through OEM to build their own brands; transform downward—into traditional retailers; transform into niche areas—into logistics providers... Now, these options are still available to distributors.

But as we mentioned earlier, new transformation directions have emerged that are in line with future trends. Because of these new directions, some traditional distributors and those who have transformed traditionally will inevitably say goodbye to the so-called traditional, leading to new differentiation within the distributor community, and this differentiation may even have regional characteristics.

For example, if we want to find health product distributors, we now face traditional distributors, service-oriented distributors focused on execution, and online distributors. If we want to find online distributors, given the borderless nature of online shopping, we will break through the regional restrictions of traditional distribution cooperation and go to Guangzhou, Dongguan, Shenzhen in the Pearl River Delta; Shanghai, Hangzhou, Nanjing in the Yangtze River Delta; or even Beijing to find partners, because the best health product online distributors in China are mostly concentrated in these areas.

The new era has put forward new capability requirements for traditional enterprises, including distributors. Our past so-called core competitiveness has become sparse and elusive due to the renewal and upgrading of new capability requirements.

It sounds like we are in the most beautiful era, experiencing the worst experiences. But Li Zhengquan wants to remind every distributor friend: the essence of business is the same as it was 10 or 20 years ago; only new technologies and new platforms have changed the way we play.

So, don't cling to the value you may assume in the enterprise's channel chain, such as being a capital provider, logistics provider, distributor, or reseller. It's time to change.

Otherwise, if you don't change your game, the new game will finish you off!

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About us: WeChat name: FMCG Distributor Professional Consulting Management Account introduction: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal affairs.

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