---
title: "Why Do Most Distributors Fail at Transitioning to Unified Warehousing and Distribution? Because They Got It Wrong from the Start!"
description: "Distributors are struggling, a consensus across the industry. With sales peaking and external growth constrained, internal cost reduction and efficiency improvement have become key focuses: 800,000 distributors/second-tier wholesalers correspond to 800,000 warehouses and millions of delivery vehicles, which is unreasonable from both commercial and economic perspectives. In recent years, many local governments have also intervened in warehousing and distribution, planning logistics parks and encouraging distributors or entrepreneurs to undertake unified warehousing and distribution (统仓统配) and other intensive, scaled operations..."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-05-06"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/a4EPnlyb_KT8JAZoQCyb2A"
translation: "https://xinjignxiao.com/zh/articles/%E8%BD%AC%E5%9E%8B%E7%BB%9F%E4%BB%93%E7%BB%9F%E9%85%8D%E9%9A%BE%E6%88%90%E5%8A%9F-%E9%82%A3%E6%98%AF%E5%9B%A0%E4%B8%BA%E5%A4%A7%E9%83%A8%E5%88%86%E7%BB%8F%E9%94%80%E5%95%86%E4%BB%8E%E4%B8%80%E5%BC%80%E5%A7%8B%E5%B0%B1%E5%81%9A%E9%94%99%E4%BA%86-76b0d663.md"
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# Why Do Most Distributors Fail at Transitioning to Unified Warehousing and Distribution? Because They Got It Wrong from the Start!

> Distributors are struggling, a consensus across the industry. With sales peaking and external growth constrained, internal cost reduction and efficiency improvement have become key focuses: 800,000 distributors/second-tier wholesalers correspond to 800,000 warehouses and millions of delivery vehicles, which is unreasonable from both commercial and economic perspectives. In recent years, many local governments have also intervened in warehousing and distribution, planning logistics parks and encouraging distributors or entrepreneurs to undertake unified warehousing and distribution (统仓统配) and other intensive, scaled operations...

**Distributors are having a hard time, which has become a consensus across the industry.**
When industry sales peak and external growth is constrained, internal cost reduction and efficiency improvement become the focus for distributors: 800,000 distributors/second-tier wholesalers correspond to 800,000 warehouses and millions of delivery vehicles. From both commercial and economic perspectives, this is completely unreasonable.
In recent years, many local governments have also extended their "hands" into warehousing and distribution, planning logistics parks and encouraging distributors with business acumen or entrepreneurial individuals to start unified warehousing and distribution (统仓统配) and other intensive, scaled warehousing and distribution operations.
Many distributors, facing their own operational difficulties and seeing peers in other regions running unified warehousing and distribution business with great enthusiasm, are also eager to try and enter the field. But how is the actual operation? The taste is known only to those who have tried it.
**Looking through the surface to the essence, behind unified warehousing and distribution is scaled commodity management, where quantitative change triggers qualitative change, leading to a transformation of the entire operational system.**
**Let me give a simple example: A distributor manages 5 brands and 20 SKUs, with manual handling and manual inspection in a 2,000m² warehouse. Workers can memorize the location of every product. For distribution, fixed periodic route delivery is no problem. But once managing 100 or 500 brands, with SKUs in the thousands, manual handling and inspection in a 10,000m² warehouse cannot be accomplished simply by relying on workers.**
Distributors transitioning to unified warehousing and distribution must not think that it is as simple as turning 10 warehouses into 1, or 50 vehicles into 5. **Turning 10 warehouses into 1 means the goods from all 10 warehouses are placed in one warehouse. Will the products get mixed up? How to adjust for peak and off-peak seasons? Turning 50 vehicles into 5 means the goods from 50 vehicles are all piled onto 5 vehicles. How to ensure timely delivery? How to make routes efficient?**
So, should distributors still do unified warehousing and distribution? If so, how exactly should they do it? And how can unified warehousing and distribution help distributors grow their business? Especially after the pandemic, will contactless delivery become a new industry trend? How should traditional distributors respond?
To address these questions, New Distribution recently co-hosted a sharing session with BEST Inc. on the topic "In the Post-Pandemic Era, How Can Unified Warehousing and Distribution Become a Booster for Distributors to Grow Their Business?" **The following is part of the live broadcast content:**
Shu Bo, Director of Warehousing and Distribution at BEST Inc., stated that traditional distributors integrate commercial flow, logistics, information flow, and capital flow into one, from warehouses and delivery vehicles to warehouse keepers, drivers, salespeople, and finance... The functional chain is lengthy, and costs remain high. Distributors often invest a lot of money and energy trying to improve logistics, but lacking professional and comprehensive supply chain system support, most efforts are superficial and yield half the results with twice the effort.
Shu Bo introduced that BEST Supply Chain's unified warehousing and co-distribution business, based on spatial integration and information integration and sharing, centralizes warehousing and distribution for same-type or different-type goods in the same demand area, achieving a "**four shares and one same**" model: "**shared warehousing and distribution center, shared delivery tools, shared network information, shared network resources, and same-route same-line delivery**." Currently, this unified warehousing and co-distribution business has been implemented in 41 key cities across 27 provinces, with over 200 distributor clients already operating in the warehouses.
Why can BEST Supply Chain's unified warehousing and co-distribution truly help distributors improve logistics efficiency, enhance operational quality, and reduce costs? Shu Bo believes that **system support and high-level operations are the core**.
BEST uses various supply chain and logistics information systems developed with 100% proprietary intellectual property to digitally manage its vast warehouse network. With the support of cloud-based WMS, TMS systems, and big data analytics applications, BEST can provide customers with visual data across the entire logistics chain, as well as solutions such as "distribution-driven warehousing" and "warehousing-driven distribution," seamlessly connecting warehousing and distribution, plus intelligent scheduling of delivery routes, maximizing logistics efficiency and reducing costs.
When distributors' businesses grow larger, warehouse areas expand, SKUs increase, delivery scenarios become more complex, time requirements become higher, and customer demands become more personalized, in addition to the support of BEST's powerful digital systems, rich and mature practical and operational management experience is also key to the success of unified warehousing and co-distribution projects.
The development of FMCG distributors and urban distribution has gone through self-operated distribution, third-party distribution, and shared warehousing/distribution resources, and is bound to develop into the professional operation stage of unified warehousing and co-distribution and "shared warehousing, shared routes."
Now, BEST Supply Chain's core competitiveness established in this field can be applied to your business immediately! For more business details, please consult:
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