We often say 'Heaven rewards the diligent.' When the external environment and technology remain unchanged or changes are insufficient to stir the senses, diligence is necessary. But when the environment and technology change rapidly, relying solely on diligence cannot achieve set goals and may even be counterproductive. In the Internet era, we need more thinking and must closely combine diligence with insight. Should we stay complacent or boldly transform? The new retail era is about to fully arrive, but current distributors handle logistics, commercial flow, information flow, and capital flow personally, and the complex affairs prevent them from focusing on commercial flow and improving service. Today, competition is increasingly fierce; those who can surpass and defeat distributors are not only competitors in the same industry, but cross-industry competition is also coming. More and more capital giants want to replace the intermediate links. National platforms such as JD New Access and Alibaba Retail Link have emerged one after another, and regional platforms like Wanshanggou, which rely on Yishang Logistics, are rapidly rising. Undoubtedly, they are all racing to capture channels and occupy terminal territory. The development and progress of the times have made distributors suffer the pain of transformation. Is it innovation or transformation? Should we continue with the original thinking step by step, or dare to accept the pain of drastic reform? The answer is self-evident! (Yijia Logistics receives a large number of visitors every day) As a distributor, choosing the right corporate positioning and development strategy is often more important than choosing a good product or opening a new channel. If you define yourself as a seller of goods, it is not very meaningful. The core value of a distributor lies in operating people through products, focusing on user experience, deeply analyzing the habits of the target audience, and becoming a new-era same-city life service provider that consumers rely on. The skills of a distributor can basically be summarized into three moves, which can be called the three axes: sales, capital advance, and logistics. Among them, sales is the distributor's market development based on upstream products and brands, local market research and understanding, and various hardware resources to establish channel influence; capital advance is using one's own capital advantage to buy out the manufacturer's product ownership and relieve the manufacturer's cash flow pressure; logistics is delivering products to customers after sales are completed according to demand. However, logistics has become a pain point that distributors find difficult to solve: they invest a lot of energy, costs remain high, and service cannot be guaranteed. There are many links in logistics distribution; products are moved an average of 5 to 8 times from production to consumers. Individual distributors are restricted by manufacturers and cannot sell competing products, making resource integration difficult. Multi-frequency, small-batch distribution costs are high. Distributors operate independently, delivering single products with low full-load rates, leading to persistently high costs. At the same time, distributors lack information systems and have problems in waybill management, cost monitoring, inventory management, shelf-life management, and inbound/outbound warehouse management, so customer service cannot be improved. For example, many mom-and-pop stores previously ordered by phone via business cards, but now many platforms are launching online ordering services, and one-stop procurement is a major trend. The new procurement model has eliminated the opaque gray interest chain. In the future, integration through logistics is entirely feasible, but the current incompatibility of interests and concepts makes the road still bumpy. But whoever can accomplish this will have a differentiated advantage. There will also be a 'Three Links and One Express' in B2B In 2016, Jack Ma proposed new retail, and based on our own business advantages, we proposed the concept of new city distribution. Yijia Logistics is based on Yihai Kerry Group's Golden Arowana rice, flour, and oil business, expanding to brand owners, distributors, B2B platforms, and chain terminals, integrating them onto a public platform. Through IT technology, intensive management, and unified warehousing and distribution, we achieve sharing of forklifts, shelves, and even the entire logistics system, to build a third-party smart logistics public platform for FMCG. We are characterized by city-wide full-channel distribution, extending services such as trunk transportation, finance, railway transshipment, and shipping agency, providing customers with professional one-stop city distribution services and full supply chain logistics solutions. Integrate resources to compress logistics costs. Currently, Yijia Logistics' Guangzhou distribution center can integrate more than 4,000 SKUs, of which Golden Arowana has more than 1,000 SKUs, and other brand manufacturers can reach 3,000 SKUs. When only Golden Arowana business was on this distribution platform, one truck needed to deliver to 13 stores per day to complete the delivery. After integrating other products, with fixed costs unchanged, each truck now only needs to deliver to 3 stores, greatly improving efficiency. Previously, when the platform only handled Golden Arowana products, the peak and off-peak seasons were very obvious. When Yijia Logistics added more brands, especially beverage products, the peak and off-peak seasons complemented each other, and warehouses and vehicles were shared, effectively reducing logistics costs. Therefore, the way to reduce logistics costs now is not how many products a truck delivers, but the distribution channels match, and the more SKUs the system matches, the greater the opportunity to compress logistics costs. In the industry, the logistics cost for operating 1,000 SKUs is about 3%, for 5,000 SKUs it is about 2% to 2.5%, and when SKUs reach 10,000 to 15,000, logistics costs will be at a low level of 1.5% to 1%. We can see that Walmart's secondary logistics cost is 1.5% and RT-Mart's is 1%, because their platforms have about 15,000 FMCG SKUs, ensuring the lowest cost in the industry. Looking at the distributor group, if sales reach 200 to 300 million yuan, the number of SKUs in hand is basically maintained at about 1,000. Even if operating revenue reaches 700 million, they will have more than 2,000 SKUs, but distribution costs still cannot be compared with comprehensive platforms. (Five-story three-dimensional shelves, suitable for storing small-batch, multi-batch products) B2B can cover B2C. The last kilometer is from big B to small B, and the last hundred meters is from small B to C, and the model concepts are different. In the future, there will be many competitors in the small B to C model from community stores to consumers' homes, including express companies, Hive Box, and community stores. But the big B to small B business has almost no successful national cases. Some people once said that bottled water cannot be sold through e-commerce, but that is not true. Today, as long as a delivery shuttle system is established, bottled water can be delivered to community stores together with other products, and then consumers can pick up goods at the community store, which not only ensures personalized consumption but also reduces distribution costs. In the future, China's logistics will only have B2B. When community stores can meet the extended business within a five-kilometer radius, delivering products to community stores is equivalent to delivering to consumers. Therefore, B2B can cover B2C, but B2C cannot cover B2B. Whether we take the initiative to change, or new access, retail link and other enterprises force us to transform, in the future, a new 'Three Links and One Express' will form in China's B2B industry, and I believe someone will stand out. Shared platform is a third-party platform outside manufacturers and distributors The factory warehouses of Yihai Kerry Golden Arowana, distributor warehouses, and Yijia Logistics warehouses total about 2.6 million square meters. Yijia Logistics has established distribution centers in more than a dozen provincial capitals and municipalities, initially forming a distribution network covering the whole country. We found that distributors have too many warehouses and factory warehouses are too large. We hope to expand the third-party Yijia Logistics warehouses in the future, thereby reducing the warehouses of distributors and factories, reducing total supply chain inventory, and achieving shared warehousing and distribution faster. Information management ensures warehouse turnover rate. We should think that in the future, warehouses are not just places to store goods, but more importantly, they reflect functions such as sorting, packaging, and consolidation. The more inventory in the warehouse, the greater the test of profitability, because goods are capital. If goods arrive at the distributor and do not need to be put on shelves but are directly delivered to the terminal, that is, the warehouse has no goods, but the trading company's business is booming, then this distributor boss is remarkable. In the future, warehouses must ensure turnover rate, reduce inventory while ensuring sales. Through the powerful information management of third-party public platforms and the use of big data analysis, order-to-delivery can be achieved, which can ensure safe and reasonable inventory, ensure sales planning, remove ineffective intermediate links, and reduce costs through economies of scale. Only third-party platforms can be shared. For distributors, whether they split commercial flow and logistics or build two or more layers of warehouses themselves, they cannot solve the actual problem, because the operator and controller behind it is still the same person, and it is difficult to achieve resource integration or build a public platform in the same industry. A platform that competitors do not use is not a shared platform. Relying solely on one company's business volume cannot support the long-term development of the platform. Only by leveraging a third-party logistics platform and integrating more merchants can it be successful. (Fully automatic intelligent sorting system, liberating manpower) Assist customers in going nationwide After cooperating with Yijia Logistics, distributors can not only reduce logistics costs through model changes, but also use Yijia Logistics' nationwide distribution channels to increase business volume, and through IT scientific management improve on-time delivery rates and reduce product loss rates, thereby achieving overall service improvement from front-end supply to back-end sales. Before cooperating with Shenzhen Qingshu Trading, they rented a warehouse of nearly 3,000 square meters in Longgang, Shenzhen. Regional logistics costs were high and consumed most of the distributor's energy, and they could not solve nationwide distribution. Since cooperating with Yijia Logistics, warehousing and logistics costs have decreased by 20% annually, business volume and operating revenue have increased by 40% annually, and more importantly, it has enhanced the negotiation power for nationwide promotion of new products on its trading platform, achieving nationwide business coverage. Today, when Today 24-hour convenience store chain cooperated with Wuhan Yijia Logistics, it had only 36 stores, and by 2016 it had opened 136 stores. Since handing over warehousing and distribution to Yijia Logistics, Today chain can focus on store design, product planning, fan economy, and dream factory, and business has grown rapidly. In 2017, Today chain plans to open 300 stores. It is understood that Today chain's annual revenue per store is 3.5 million yuan, with an average daily revenue of 12,000 yuan per store, and overall annual operating revenue in 2016 was 1.5 billion yuan. If the number of stores doubles and products are replicated, it is not difficult to become a 10-billion-yuan enterprise. Analyzing its internal business model, Today chain's beverages are not profitable, but seasonal sales of roasted sweet potatoes and tea eggs can exceed 50 million yuan. It is precisely by relying on product portfolios, integrated business models, chain store sales, Internet thinking, active fan interaction, and the backend distribution services of Yijia Logistics that rapid replication is achieved. Let's take another example from Chengdu Yijia Logistics. Nongfu Spring series products go through four logistics links: factory - Shuangliu Station - third-party warehouse - distributor - terminal, with cumbersome links and low turnover. After the Yijia Logistics system was established in Chengdu, Nongfu Spring products can go directly from the factory - Shuangliu Station by rail to Yijia Logistics' main warehouse - terminal, reducing two links. As a result, logistics costs per ton of products can save more than 100 yuan. In addition to the above advantages, one of Yijia Logistics' goals is to shorten customers' capital cycles, activate resources through goods as collateral, develop logistics finance, and help distributors use 20 million yuan in working capital to achieve 300 million yuan in business. "Whether the new business model can subvert distributors in the future depends on whether distributors can maintain their own advantages. If distributors can control warehousing and logistics costs at 1% to 2%, it will be difficult for anyone to subvert them. Huddling together for warmth is passive; we need to develop together, using our respective advantages to be leaders and practitioners in the industry." This article is based on the speech of Sheng Yan, National Logistics Director of Yihai Kerry; compiled by Zhang Lijian of Sugar, Tobacco, and Wine Weekly -END-