Introduction: Many B2B e-commerce platforms are finding themselves in a difficult position: the first 'B' (business) is mainly agents rather than enterprises, and the second 'B' (business) is increasingly costly and difficult to serve, with limited operational and profit margins and low scalability. Some platforms that were originally distributors can continue as distributors, just upgraded, but other new B2B e-commerce platforms are like dark clouds overhead, unsure of where tomorrow lies!
Manufacturers' Purpose in Using Channel Partners In fact, manufacturers of well-known products have certain requirements when utilizing channel partners. These requirements are based on achieving their own goals. We might only see that manufacturers simply want to use you for distribution!
But that's not necessarily the case.
A manufacturer is an operating entity and, as the starting point of the channel, also bears a certain role in managing the entire channel. This operation and management require manufacturers to use intermediaries for the functions we often mention, which are supported and stabilized by the following processes:
1. Commercial flow and product flow
2. Logistics and distribution
3. Capital
4. Information flow
These internal processes that manufacturers use in the channel enable the achievement of business goals, smooth management, and sustainable market development. Whether channel partners can be attracted and cooperate with manufacturers depends on whether these processes can be realized and satisfied to achieve the manufacturer's operational and management goals.
B2B's Functional Gaps for Enterprises Looking around, B2B e-commerce has flourished in the past two or three years, mostly driven by their own profit models. After all, starting a business requires development, and business requires profit. Well-known brands have developed over many years, and the existing market is already there. Where can B2B e-commerce find incremental growth? They need to develop, increase weighted distribution, drive sell-through, and generate various performance metrics. All these require B2B platforms to increase manpower, materials, financial resources, and, more importantly, capabilities. Many B2B e-commerce platforms are exploring and developing through trial and error. How many B2B platforms have strengths superior to the original models?
Of course, the above is only part of the story. There are also:
1. Weak commercial flow. Enterprises have long realized that the commercial capabilities of distributor tiers are weaker than their own. Therefore, many enterprises have spent years improving and building systems in this area. Even with significant investment and difficult operations and management, they implement deep distribution, channel refinement, direct supply, and distribution collaboration models. They take over the business negotiation capabilities with end customers and even consumers, and they take orders themselves. B2B e-commerce platforms may not realize that enterprises do not expect B2B platforms to exceed their expectations in this area, so they cannot attract enterprises in this regard. However, this is likely the most profitable aspect for B2B e-commerce.
Furthermore, the original distributor tier serves as a crucial reservoir for enterprises: a thousand distributors mean a thousand sales reservoirs! B2B e-commerce platforms may not consider how much of their warehousing capacity can meet manufacturers' requirements in this regard.
2. Logistics. In the mobile era, can logistics be significantly improved through B2B e-commerce? Yes, but only for large professional logistics companies! In fact, well-known enterprises experimented with outsourcing logistics to professional logistics providers over a decade ago: low cost, professional, and satisfactory service. B2B e-commerce has only two options: cooperate with logistics providers or build their own logistics. Cooperating with logistics providers eats into the already thin profits of B2B platforms, while building their own logistics makes enterprises skeptical of their capability and strength. So, enterprises do not have high expectations in this area.
3. Capital flow. Those who have run businesses know that enterprises place great importance on this. Wahaha is the most prominent example: each distributor must pay a deposit of at least several million up to ten million yuan, euphemistically called a deposit, but it is clearly an occupation of distributor funds. How much capital can B2B e-commerce platforms offer for enterprises to occupy?
4. Information flow. Enterprises leverage their strong distributor networks for information deployment. Various market information, consumer information, sales information, competitor information, and customer information flow continuously from customers or sales personnel across regions, enabling effective decision-making. Everyone knows why B2B e-commerce platforms create B2B software: they want this information to enter their systems, become their big data, become their profit model, and become their 'sheep's wool from pigs, paid by dogs' content. Enterprises are fully aware of this!
These are basic marketing common sense and simple analysis. Enterprises are only observing and not actively cooperating with B2B e-commerce. Even if they cooperate, they often treat B2B platforms as just another distributor, without additional support. Moreover, this is often done by sales personnel to meet their own sales targets, adding distributors within their authority, sometimes without even reporting it!
Furthermore, enterprises are well aware that if one 'B' (the manufacturer side) does not change, the other 'B' (the buyer side) is unlikely to see revolutionary improvements from B2B e-commerce. B2B e-commerce is just an intermediary link, so why would enterprises take the initiative to cozy up to B2B platforms?
B2B's Negative Impact on Enterprises Moreover, B2B e-commerce platforms may often feel inferior in front of enterprises: how low have you pushed the prices of the enterprise's products? The enterprise's well-managed market, with strict prevention of cross-region sales and severe penalties, may be disrupted by your cross-region sales!
Some B2B e-commerce platforms, in their rush to establish a presence, initially try to buy end customers. When they can no longer buy them, they directly poach the enterprise's salespeople. This way, they gain terminal resources and business capabilities, directly positioning themselves as competitors to the enterprise.
Additionally, current B2B platforms often serve two or even several competing enterprises. It is easy to imagine how dark the sales director's face would turn when you hold data from two competitors. Of course, traditional distributors and supermarkets also sell competing products, but the data then was not as comprehensive and vivid as the mobile internet data now, with promotional policies so clear... A screenshot can be sent to competitors, far from the cautious and timid approach of the past when competitors' policy discussions were conducted with phones on speaker!
In fact, the main reason enterprises do not use B2B e-commerce is likely their own operational considerations: they want to keep their operational status, policies, trends, and overall data under their control.
However, you can only bring limited sales growth, but the troubles, potential problems, and worries are numerous!
Of course, some enterprises should still consider cooperating with B2B e-commerce After all, B2B e-commerce is an external resource, may represent a new force, and may be a new sales model worth exploring. Moreover, if B2B e-commerce truly increases sales, improves the market, and is harmless, why close oneself off?
B2B e-commerce has achieved trial and error in new cooperation between Bs through mobile internet. Enterprises should pay attention. B2B has brought new participation and experience in the relationship, interests, operations, and management between two Bs, which is commendable. Participating can serve as a sample for deeper involvement in mobile internet and as research for improving effectiveness, efficiency, and profitability.
Blank markets can be safely left to B2B platforms!
For difficult markets, B2B e-commerce with mobile internet weapons should find it easier!
At a certain level, B2B platforms can organize the market through software systems, potentially serving as a weapon to differentiate from competitors.
In summary, if enterprises are truly interested and willing to cooperate with B2B e-commerce, that might be a sign of genuine market recognition! Otherwise, compared to traditional distributors, what is the difference between you and them, just wearing the cloak of mobile internet and new models, with similar internal operations and profitability?
Tan Changchun, committed to turning any product into a fast-moving consumer good. General Manager of Huaxia Jishi Marketing Consulting Company, Chief Consultant of the Group, Special Expert Consultant of Kotler Consulting Group, Project Director of TNS Market Research Consulting Company. Founder of the Integrated Marketing System. Renowned marketing expert and trainer;特邀讲师 for China Marketing Director Qualification Exam;特聘讲师 for "Frontier Lectures"; Gold Medal Lecturer of the Training Expert Group of "Sales and Market";特邀讲师 for marketing director classes at several top domestic universities.
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