Way out for detergent distributor

According to industry sources related to washing powder wholesale, in cities like Shanghai, nearly 50% of washing powder wholesalers have disappeared. Due to the demolition of urban planning and construction sites, the storage costs of washing powder wholesalers have increased significantly, exceeding most of them. The profitability of the wholesaler. In addition, both the national B2B platform and the regional B2B platform are accelerating the coverage and penetration of small shops to varying degrees, and the frequency of these small shops from placing orders online has increased significantly. To make matters worse, chain convenience stores represented by Family Mart and Lawson have been expanding in the past two years. Whether they are franchising or self-operating, there are not a few traditional self-employed small stores that choose to close their stores or transform to franchise. In this context, a large wave of washing powder wholesalers is gradually withdrawing from the stage. Shanghai is just a microcosm, and other cities are also being staged.

If the wholesaler is gone, can the distributor be far away?

The way out for detergent distributors

Relevant data shows that there are nearly 200,000 detergent powder distributors in the country, 50% of which are tens of millions (turnover). Relying on the past to capture the market dividend of a certain brand, they become an agent in a certain place. Complete the transformation from self-employed to trading company. Many washing powder distributors relied on market dividends and low-cost operations in the early stage, and indeed made profits. However, they are now faced with many internal and external factors such as market saturation, competition for stocks, rising costs and other internal and external factors, which have caused serious profits to shrink.

Although holding a well-known brand in hand, the profits behind it are squeezed out from providing warehousing functions. In the past, experts in the washing powder manufacturing industry pointed out that the future changes in washing powder sales channels will form four systems: first, the order system; second, the financial system; third, the warehousing system; and fourth, the promotion system. Among these four functions, the most suitable for detergent distributors to undertake is the promotion system, and other functions will be actively or passively stripped off, such as warehousing and handing over to a third-party warehousing and distribution. However, the reality is that providing warehouse distribution for brands has become one of the core profits of distributors. If warehouse distribution is stripped, it means that there is nothing to do for some well-known brand washing powder distributors.

Some time ago, I talked to the regional leader of a well-known washing powder wholesale brand about the transformation of washing powder distributors. He said: The biggest value of current tens of millions of distributors is not distribution, but warehousing. We can see that a considerable number of small distributors do not have the ability to circulate goods. They only rely on the sales force and promotion plan provided by the washing powder wholesalers. Once the sales are withdrawn, it means that the orders are gone. If the warehouse distribution is stripped again, these small detergent distributors basically have nothing to do.

The person in charge said frankly that, looking at the overall external environment, although third-party warehousing and distribution are not yet mature and few have price competitive advantages, there is no doubt that the popularization of third-party urban distribution is a high probability event in the future. Now that the trend is clear, companies hope that distributors can make decisions based on the future and transform ahead of time. We chanted the transformation slogan of enhancing "distributors' independent distribution capabilities" and promoted the transformation of distributors into brand marketers.

Strictly speaking, the current detergent distributors can be basically divided into three categories:

Distributors of the first category of washing powder have distribution capabilities. In the past, except for well-known brand agents, all other brands were sold by distributors;

The second type of distributors lack business flow capabilities. This type of washing powder distributor is more like a logistics porter. Washing powder manufacturers take orders and distribute them to distributors. They do logistics work and earn money from distributors. For such distributors, gradually increase the proportion of distribution and gradually guide the distributors' independent distribution capabilities;

Distributors of the third category of washing powder, without any willingness to transform, sit on their own feet and give up decisively.

Therefore, looking at the transformation of washing powder distributors from the perspective of washing powder wholesalers and suppliers, washing powder wholesalers hope that distributors can transform from a single logistics capability to a combination of business flow capabilities. Throughout the changes in recent years, the fast-moving giants represented by Nongfu Spring have all made channel adjustments, integrated regional distributors, supported distributors’ cross-regional operations, and transferred their first-line business to distributors to become exclusive distributors. This will strengthen the proportion of distributors' self-sales. For another example, many fast-moving consumer goods industries have implemented the "four-in-one" market operation model in the early stage, extending the management tentacles to distributor salespersons, allowing salespersons to become regional partners, and distributors act as small platforms to provide funds , Vehicles, warehousing, financial support, salespersons become entrepreneurial entities, and the distribution of contract products according to area routes.

The historical mission of washing powder distributors

"In the next 2-3 years, detergent distributors will face a major reshuffle. In this process, many distributors will not survive," said the person in charge.

Channel changes must be the distributors who change. The country has more than 200,000 detergent powder distributors, hundreds of thousands of warehouses, and millions of transport vehicles. It must be unreasonable. No one can stop the trend of intensive, platform-based, and networked supply chains. Some people may question that detergent distributors cannot be revolutionized, and many functions and tasks cannot be replaced. In terms of quantity, this is indeed the case. It is impossible for all 200,000 distributors to die, but it is possible that 50% of them will disappear. And in this inevitable wave of elimination, detergent distributors who do not have the functions of distribution and promotion are the first to bear the brunt.

Let us pull the history back to around 2004 and look at the hidden dangers of the current detergent distributors from the emergence of deep distribution.

Economists have said that the logic of in-depth distribution is that manufacturers work together to extend their business tentacles to small stores, and achieve large-scale sales of goods through large-scale production and large-scale distribution. At that time, the background of in-depth distribution was the dividend of market demand, and the channel infrastructure was not perfect. Faced with the deep and highly complex retail market, in-depth distribution was the most efficient means of distribution at this time. In this process, although there is a game among detergent manufacturers, it is essentially a community of interests. For the sake of their own interests and the market growth can be expected, the washing powder brand manufacturers will divide the area and compress the range of agents of the washing powder distributors, and enjoy absolute channel control.

Now, with the diversification of market demand, the gradual improvement of infrastructure (the maturity of B2B), the emergence of various online and offline retail channels, and the rising costs behind the crowded tactics, the current in-depth distribution is no longer sustainable. Therefore, we can see that in the past two years, many well-known washing powder wholesalers can no longer support independent distribution systems on their own.

In the past, these distributors who grew up with the washing powder wholesalers, lying on the "hotbed" of the brand, only provided warehousing and capital, and they could enjoy the dividends safely. Such days will be gone forever. Washing powder wholesalers have a hard time. The first thing is to lay off workers. If the washing powder distributors do not have factory salespersons, can they survive?

Strictly speaking, Chinese detergent distributors have completed their historical missions and will gradually evolve and transform in the future channel distribution, evolving toward specialization, verticalization, and scale, and become promoters and warehouses. Distribution vendors, marketers, and even platform vendors, etc., join the business community organized by B2B and become a member of the supply network.

Distributors who rely entirely on the manufacturer’s business to do the market, and the delivery is not timely, the distributors who are urged to make money can basically be classified as "retired" distributors. This kind of distributors will not talk about the transformation. If this kind of distributors can survive, this will be a miracle!

Regarding the transformation of washing powder distributors, in addition to cross-track operations such as unified warehouse distribution and opening of convenience stores, the core key point of the transformation of washing powder distributors is to improve their independent distribution capabilities. Larger distributors have become a regional B2B platform for washing powder to meet the one-stop orders from small stores; medium-sized distributors may consider transforming into vertical category operators and become the king of regional category distribution; smaller ones Distributors become promoters, integrate brand dealers’ salespersons, and provide full-time services for a certain brand.

In the past, distributors relied on the brand to complete the original capital accumulation, and also enjoyed a good period of time. Nowadays, the market competition is fierce, and the curtain of the stock dispute has been raised. Nowadays, when the brand is no longer able to fight alone, it is more necessary Joining of distributors.