The prevalence of JD.com and Taobao has made the concept of platforms follow market trends, even becoming wildly popular. I've met several distributors with sales in the tens of millions who talk about platforms and trends constantly. When asked about their plans, they only offer vague notions of becoming bigger and stronger. When we are still a pig, we shouldn't pretend to be a tiger; no matter how big the pig is, the bigger it is, the more dangerous it becomes. Distributors should especially heed this warning! What is a platform? Generally speaking, a platform builds channels between merchants and users, merchants and merchants, and users and users, and this channel has positive incentive characteristics: the more transactions on one side, the more it stimulates rapid growth on the other side. Just like the "telephone effect": the more people use telephones, the stronger the incentive for others to join. More importantly, this efficient self-replication adds almost negligible cost to the platform, which is the charm of platforms. What is a platform in the distribution model? In essence, it is building a connection platform similar to that between manufacturers and consumers, manufacturers and manufacturers, and consumers and consumers, and this platform must have the following two traits:

  1. (Regional) uniqueness or absolute advantage;
  2. Costs do not increase with the number of transactions, or increase very little. Obviously, if this can be achieved, consumers will come to this platform first when buying things, and manufacturers entering this regional market would face near-certain failure without leveraging this force. This is a living upgraded version of a portal distributor, and it is what countless distributors dream of. Those fallen distributor platforms Cruelly, more distributors fail on the second trait: costs do not increase with transaction volume, or increase very little. Expanding a physical platform without increasing costs seems to defy common sense. So some distributors choose to imitate Taobao or Tmall, setting up websites or developing software. There was a distributor in Fujian who, having made some money early on, spent a large sum on a store information navigation system software without understanding anything, but lacked the ability to promote it and had to give up halfway. A distributor in Nanjing developed a store product display and demonstration software and equipped their outlets with it by rewarding them with tablets for purchases. But because they couldn't solve the problems of later maintenance and updates, the software ended in failure. Outsiders doing insider work, and platforms rushed into, mostly end in a hasty retreat. So, for distributors, does a platform in the distribution model simply not exist? I want to emphasize that physical platforms cannot be achieved overnight by imitating virtual economy platforms; the physical economy has its own operating rules and characteristics. In the information age, instead of blindly pursuing bigness and strength, it's better to subdivide the distribution link, focus on areas where information is most easily distorted and services are not fully satisfied, persist, form barriers and advantages, and create a unique platform for the distribution model. Three major directions for distributor platforms We will only make tentative introductions from three aspects: after-sales service, warehousing, and sales. If you position yourself as an after-sales service platform, consider whether your stores can become platforms providing supporting services for various products, and whether your subordinate outlets can become service tentacles. For example, can home appliance installation or repair services also provide similar services for brands you don't distribute? Can you extend to related products like lighting? How to support and settle the linked services of subordinate outlets? When you position yourself as a service platform, you must become a gathering platform for regional electricians and plumbers, a collection platform for other similar products' online deliveries, and a contracting platform for after-sales services. You need to use existing technological means to connect them, not invest in software development. If you position yourself as a warehousing platform, think about what capabilities you have to become one. Is my rental cost advantageous? Is my warehouse management most efficient? Is my warehouse manager the relative I brought from my hometown or a professionally hired outsider? Is my ratio of in-transit to in-stock goods optimal? Are my warehouse shipments and receivables reasonable? Your money now should not be spent on hiring professional store guides or excellent salespeople, or building the most beautiful stores, but on professional warehouse management talent. You need to study how to make more manufacturers willing to "rent" a small space in your warehouse, with you radiating to the region; how to make more subordinate outlets find you first when they need brands; and how to arrange and place goods to accommodate more brands in your warehouse. Believe me, the warehouse is the root of all evil for distributors, but you can also sweep out gold from the warehouse. Of course, the premise is that you need to find people to learn to use certain professional software efficiently. If you position yourself as a sales platform, you must be willing to spend heavily on expanding sales outlets, rather than waiting for manufacturers to help you open up territory; you must work to turn these outlets, and even the outlets behind them (many industries and outlets are connected by relatives), into your loyal fans; you must think about whether to make every effort to establish customer files when consumers enter the store, or add them to your consumer groups; you must think about whether consumers trust a professional, well-trained distributor staff more than a delivery guy mixing rice and air conditioners; you must think about how to display more products in your store, and how physical and virtual products can coexist harmoniously. To do these well, you may need to use mature external software or manufacturers' store software, rather than developing your own. For distributors, wanting to build a platform like JD.com or Taobao that yields huge profits with little investment, or physical platforms like Gome or Suning, actually goes beyond the distributor's path of making money from price differences; it is another business model. This model has two irreconcilable internal conflicts with the distributor system: First, distributors operate on regional distribution, forming profitability through regional protection or differentiated operations; platforms, on the other hand, need borderless sales expansion, with marginal costs reduced or even ignored as the basis for profitability. Second, distributors' profits must come from consumers, while platform profit models often have third parties pay, sharing the sellers' interests and compressing sellers' space. This is a very dangerous signal, and it is also a point of criticism and debate in e-commerce built on virtual platform models. Gome and Suning took the lead, JD.com and Taobao took it to the extreme, and latecomers surpassed them. This fear may destroy physical platforms and may even hollow out virtual platforms. When everyone is greedy, learn to fear; when everyone is fearful, start to be greedy. This investment quote from Buffett is also quite suitable for distributors' platform thinking in positioning. This article was published in the March 2015 issue of "Sales and Marketing" magazine, channel edition. -END- Content selection Reply with the following keywords to categorize and read related articles: Sales supervisor, second-tier management, regional manager, distributor management, new channels, city manager, competition, 2015, manufacturer-dealer game, product stagnation, terminal visit management, route management, deep distribution, internal management, sales skills, profit improvement, recruitment, distribution, daily management, team motivation, channel promotion, sales misunderstandings, new product launch, township market, new product pricing, sales target achievement, closing orders, market visit inspection, baijiu, beer, sales increase, agency products, cross-region sales, KA, terminal merchandising, new market, market operation, learning, book recommendations, inventory management, new salespeople, consumer promotion, execution, old products, expired product handling, model market, investment attraction, new media, distributor development, performance assessment, assessment, annual planning, shopping guide, morning meeting, display, transformation, inventory pressure, holidays, distributor cost control, channel operation, marketing theory and laws, brand truth, ordering meeting, team management, training, debriefing, debriefing report.