Introduction: Doing a good job in the distribution coverage of stores is the key to the sustainable operation of dealers.
Author丨Yuan Lai.
Hello friends.
Seeing the words, I am Yuan Lai, the new distributor.
Some time ago, I communicated with dealers and friends around the country and found that many dealers began to prepare, or were already on the way to implementing a local B2B platform.
Many friends have seen the case reports and study tours of Jiapinyun City, Kualai Shopkeeper, Rongcheng Tesco and Luoyang Hecai in the past, and then began to realize that the local B2B platform business can become a feasible path to continue to grow bigger and stronger.
I have said this example on many occasions in the past: in a third- or fourth-tier city, take a certain husband-and-wife store with an average daily turnover of 3,000 yuan as an example.
The average daily turnover of 3,000 yuan, the gross profit of about 500 yuan, and the purchase cost of goods of 2,500 yuan. Among them, 1,500 yuan for tobacco, alcohol and beverages, 1,000 yuan for groceries, etc. Among the 1,000 yuan groceries, 750 yuan is mainly food seasoning.
Therefore, it is basically possible to calculate:There are 3,500 mom-and-pop stores in a third- and fourth-tier city, and its capacity is: 750*365*3500=95.8 billion yuan (food seasoning category capacity).
That is to say,Ideally, if a distributor covers 3,500 local mom-and-pop stores and provides them with one-stop fast-moving consumer goods such as food seasoning and daily chemicals, according to a market share of 30%, it can achieve a business of 300 million.
And such a distribution business, no account period, no arrears, good cash flow. That's why many dealers are eager to give it a try.
The ideal is very plump, and the reality is very skinny.
Although the business model seems to be good, it is not easy to get started.
Based on some of the failure cases I have seen in the past and the "detours" behind the successful cases, I provide 10 pit avoidance guides for friends who are about to do or are already doing local B2B platform providers.
Do platform distribution business and traditional ** business
Although they are all purchased and sold
But the logic behind it is far from the same
Doing business is based on brand demand. "I will sell what the brand sells", not only to complete the manufacturer's sales task indicators, but also to complete the new product promotion indicators given by the manufacturer.
It doesn't matter to you what products you sell, how you sell them, and who you sell them to, basically, the manufacturer has already designed it for you.
To put it bluntly, the upstream manufacturers are your customers, and the downstream stores are just the carriers of the business.
WhileDoing platform distribution business is based on the demand for goods in stores. "I'll sell whatever the shop wants." What products to sell is based on the needs of small stores.
Compared with the first business, the downstream store is the customer, and the upstream brand is just the goods that are carried.
This is the logical difference between the two.
Therefore, when dealers are doing B2B platform providers, they must first establish a correct concept in their business philosophy.
Try not to unite several
Business peers work together in partnership!
Because it is a one-stop FMCG product for small stores, it involves multiple categories such as water drinks, rest, seasoning, daily chemicals, etc., with two or three thousand SKU products.
Some big businessmen in a single category of rest or seasoning or daily chemical thought "I don't understand seasoning, I don't understand daily chemicals, can I call local counterparts to do it together." ”
It seems that the commodity organization has been solved, and the risk can be shared evenly to a certain extent. Once you really cooperate, all kinds of moths will appear.
Of course, this is not because of the B2B platform business model itself.
Rather, if two or more dealer owners partner to do a business, the success rate is not high from the past practice history. In the unified warehouse and distribution business that emerged in 2018, three or five dealers merged into the warehouse, and the final result was all gone.
It doesn't matter what system you start with
Always have to be changed!
When many dealers are preparing for the B2B platform, the first issue they face is what system software to use. Ask me if you can introduce a "perfect" software system.
There is no perfect software system on the market, no one is perfect, one reason.
I've always held the point that:The business runs first, and any system can be used. The software system follows the business, and as the business grows, the system tools must also be updated.
Don't expect the system to be in place in one step, find a slightly more reliable one, run first, and change as you go. Software systems can never be 100% perfect.
Existing business and platform business
Don't mix it up!
Don't do a regional B2B platform within the system of an existing trading company. The organization and matching capabilities of the existing trading companies are not enough to support the platform business.
It's not that the internal organization can't do it, but that the capability modules required by different businesses are different.
The existing business is based on upstream brands or categories, and the local B2B platform is based on the demand for goods in stores.
For example, in the back-end procurement, the procurement of the commercial distribution business is more of an administrative post, placing orders, calculating expenses, and doing write-offs.
The procurement of the B2B platform is the core business position, how to pick cheap first-line best-selling products, which commodities to buy, how to update and eliminate seasoning, daily chemicals, rest and other goods, how to find long-term and stable business partners, etc.
The organizational skills are completely different.
Doing a platform is a business to grab peers
Don't be too high-profile in the early stage!
To be a local B2B platform business, we need to do rest, seasoning, and water, and multi-category distribution covers husband and wife stores. Local counterparts will be afraid of you and may not supply you. Even if it is supplied, it will not be given the right **.
Therefore,When doing B2B in the early stage, don't be too high-profile and disguise yourself appropriately. Wait until the average monthly average is 4 million to 5 million, for example, when you have a sales base, you will be eligible to go to the negotiation table.
Of course, even if it is low-key, it will eventually be besieged and resisted by local distributors and wholesalers.
Don't think about making money for the first two years
There is a sense of strategic loss!
Traditional dealers sell goods to stores, cars and cars want to make money, and pieces want to make moneyYou can't do a business that doesn't make money, which is the inevitable pursuit of doing a lasting business on the basis of a stable business.
But not for local B2B platforms. It is unlikely to make money in the first 2-3 years, stable development, past the break-even point, and after 3 years, it will be very profitable on a certain scale.
Previously, many dealers asked me if I wanted to do B2B. My first question is: how long do you want to do B2B business?1 year?2 years?5 years?10 years?
The local B2B platform business is not a brand, and it is not a project to achieve one or two million. It is no exaggeration to say that it is no less than a dealer's second venture.
At this time, age, mental strength, financial resources, and time period expectations are important.
Software tools are infrastructure
But the core of the business is still the merchandise and the store!
The local B2B platform is a new business model, covering 3,500 small and medium-sized stores in the downstream and at least 2,000 or 3,000 SKUs in the upstream. Multi-SKU and multi-store operations must be carried out through digital software tools.
Because there are various coupon issuance functions in the software: full reduction, full gift, full delivery, limited time purchase, limited time reduction, various holiday promotions, etc., dealer bosses usually think: so many customers, so many goods, the business operation of the platform must be very important.
But the truth is, operations are not as important as they seem. For a store, the "certain" demand for goods, stable and continuous products** is the most important.
Therefore,Compared with operations, the most important thing is front-end sales and back-end procurement and sales. Which goods to sell, which goods can be sold, and which goods can make money are the core of purchasing and selling.
How to get more stores to buy, buy more goods, and continue to buy is the core of sales.
The most suitable category to cut into at the beginning:
Drinks and rest, but each has its pros and cons!
To be a local B2B platform, if you start with beverage categories, whether you are a farmer, or a Cestbon, Red Bull, Coca-Cola, or Master Kong, in the past, the traditional business itself was covered by small stores, which is an advantage.
But under the advantages, there must be disadvantages. To be a first-line beverage brand, manufacturers have higher requirements for you. If you do B2B platform business at the same time, and cut into water and drink products, it will inevitably affect the existing stock, and the manufacturer manager will give certain pressure on the energy dispersion, low price risk, cross-regional supply, etc.
If it is a break in the food, the first-line rest food manufacturers will vigorously support it, because the previous mainstream rest food distributors, the coverage of small and medium-sized stores is basically covered by regional wholesalers, and now directly do small and medium-sized stores, rest food manufacturers support with both hands, and even give fees.
Similarly, the disadvantage is that the rest food dealer has probably not done in-depth distribution of small stores before, and now it takes time to rebuild the team to visit and develop small and medium-sized stores.
Own business SKUs and platforms
The demand for goods in the small stores covered varies greatly!
Some leisure food distributors are considered TOP1 in the field of local leisure food, with fifty or sixty brands and one or two thousand SKUs, doing local B2B platforms, thinking that there is no need to source outside leisure products.
But in fact,There is a big difference between the one or two thousand SKUs that do business distribution and the one or two thousand SKUs that small stores demand. The SKUs of the distribution ** are partly SKUs that manufacturers want to push or cultivate, and on the other hand, they are SKUs that are suitable for stores and supermarkets.
If the trade operates 2,000 SKUs, 25% of them match 500 SKUs.
The paths can't be exactly the same
But scaling distribution must be the right direction!
The local retail environment, peer competition, internal organizational capabilities and category resources are all different, so the path to becoming a local B2B platform provider cannot be exactly the same.
Some dealers are cut into water and drink, some dealers are cut into rest, and some dealers are cut into daily chemicals. Although the paths are different, one thing can be confirmed: the direction of large-scale coverage and distribution must be correct.
The foundation of dealers' future survival is not the brand, but the store. Doing a good job in the distribution coverage of stores is the key to the sustainable operation of dealers.
Write at the end
Many dealers are eager to try to build a local B2B platform, but the starting point of consideration is always based on objective market capacity factors such as local population, economy, city size, and whether there are other platforms. But in fact, when dealers want to do a local B2B platform, they should think more about three dimensions:
1.Local peer competition
2.Local retail landscape
3.Own business strength
Local peer competition, whether there is absolute influence in the three categories of rest, seasoning, and daily chemicals, will become a possible competitor or "stumbling block" on the road to the local B2B platform in the future.
The degree of chaining of local retail formats, especially in fourth- and fifth-tier cities, also determines the number and capacity of small and medium-sized stores covered by dealers' independent distribution.
For the local B2B platform business, I generally recommend that if the traditional business business does not reach more than 50 or 60 million, or becomes the top 2 distributors in a certain sub-category (seasoning, rest, daily chemicals, water and drink), do not consider this business.
Doing a local B2B platform business is a good business, but it is also a very threshold business, and it is not something that can be done if you want to!