There are nearly 2,000 B2B platforms in China, covering various industries and models, including matchmaking, self-operated, SaaS, private cloud deployment, niche industries, and platform-based models. Regardless of the type, everyone believes their platform is a panacea for all industries. However, after a year of visiting and studying various platforms, the author found that in fact, B2B, like B2C, has boundaries; not all categories are suitable for B2B, but most B2B practitioners seem unaware of this. Today, the author will discuss in depth where the category boundaries for B2B lie.

Before clarifying the category boundaries for B2B, let's first discuss the category boundaries for B2C.

  1. The core factor determining where consumers shop is not price, but the total cost of consumption, which includes the cost of goods, risk cost, time cost, etc. If you don't understand, you can search for "customer delivered value" online.
  2. For unplanned consumer goods (also known as physiological needs goods: thirsty, hungry, tired, sleepy, sick, etc.), consumers have extremely high requirements for logistics timeliness. If B2C platforms want to meet delivery requirements, it will lead to infinitely high distribution costs, and logistics costs will eat up all profits.
  3. The higher the frequency and the shorter the consumption cycle, the lower the value of the goods, and the higher the proportion of delivery cost per smallest unit to the total value. For example, mineral water is a typical product not suitable for online sales. Even if a bottle of Nongfu Spring is priced at 0.2 yuan online, consumers will still buy it offline. One reason is that online purchases cannot be delivered in time (time cost), and even if delivered in time, the logistics cost far exceeds the value of the product itself, making online sales meaningless. Therefore, the boundary for B2C is whether the profit from a single order can cover the delivery cost.

Can B2B solve the bottleneck of B2C? The answer is yes. The convenience store system uses physical proximity to counter the speed of online logistics. The time and logistics costs that plague B2C in FMCG do not exist in the retail industry because stores are close enough to consumers, and the time cost of shopping is acceptable. Stores can reduce logistics costs through bulk advance purchasing. Thus, the bottleneck of B2C does not exist in B2B. Where are the boundaries for FMCG B2B? In raw material B2B, such as the catering ingredients industry, stores purchase raw materials that chefs process to create added value. The main decision factors for store procurement are quality and low price. However, there is a significant difference between consumer goods B2B and raw material B2B: although platforms can efficiently deliver goods to stores, the procurement decision-maker is not the final consumer. Store owners purchase goods to "sell" directly, so they value not only price but also turnover. There are countless reasons why consumers decide to buy a product, but overall, there is a core concept everyone must understand: the higher the frequency of a product, the higher the brand awareness; the lower the frequency, the higher the dependence on channels. Since most FMCG products have high consumption frequency, branded products have a special advantage in retail stores. Therefore, the most ideal transaction target for B2B is best-selling A-class products. Here come the problems:

1. Existing stock cannot be moved

As mentioned in previous articles, most A-class brand manufacturers have relatively complete distribution systems. The traditional stock is too large, and there are too many rules (regional market protection, agency rights, strict anti-diversion measures, price protection, etc.). Moreover, due to doubts about new channel distribution capabilities, manufacturers are generally unwilling to give platforms the same treatment as regional distributors. Even if they do, platforms are not capable of maintaining the market like distributors. Therefore, the inability to list A-class products online is a common headache for all FMCG B2B platforms.

2. Incremental growth cannot be achieved

At present, most FMCG B2B platforms lack the capability for new product promotion. Market promotion and terminal visual maintenance are not the strengths of B2B platforms, nor are they the value of B2B platforms. The value of platforms lies in the efficient integration and utilization of information flow, logistics, and capital flow. New product promotion and market maintenance should be handled by more professional manufacturers or third parties through social division of labor. However, at this stage, both manufacturer awareness and such social infrastructure are lacking. Therefore, to independently promote new products, FMCG B2B platforms still have a long way to go. Since existing stock cannot be moved and incremental growth cannot be achieved, where is the value of platforms? Retail stores typically have 2,500-4,500 SKUs. A-class brands and categories with high brand awareness account for a high proportion of sales, but their SKUs are only a small part of the store. Most products and categories have relatively low consumption frequency and low brand awareness. For example, in the freshly squeezed coconut juice category, consumers recognize the category rather than the brand. Therefore, such products are more suitable for B2B. Categories like snacks, stationery, paper products, condiments, grains, and oils have this characteristic. Products that can naturally sell through in the terminal without deliberate promotion are the categories that B2B can handle. Therefore, the category boundary for FMCG B2B lies in whether the product can achieve natural sell-through at the terminal. All technologies that reconstruct the industry, such as big data, supply chain finance, online transactions, and centralized warehousing and distribution, are only effective within these boundaries. This is the underlying logic! -END- The best FMCG distributor learning platform in China Focusing on 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 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 eighteen 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]