Dealers are going to be eliminated?
When e-commerce began to rise more than ten years ago, this topic will continue to be mentioned by dealers, manufacturers, salesmen, terminals, etc. every year, and every time this topic is mentioned, many dealers will resonate. But will dealers really be eliminated?
From involution to innovation and development, the model of dealers is constantly changing, and the gap between dealers is also widening. It is never outsiders who really eliminate dealers, but the dealers themselves.
Are dealers really not making money?
Since more than ten years ago, some dealers began to complain about not making money, and set off a long-term involution. However, with the involution of the industry, dealers still make less and less money, and dealers can only rely on involution to strengthen competition?
In the recent exchange with dealer expert Mr. Pan Wenfu, Mr. Pan pointed out three points:
1. The essence of the dealer is that it is a localized operator, based on the integration ability of local resources, to carry out commercial operations;
2. It is not that dealers do not make money, but the lack of corresponding cost control capabilities, excessive internal friction, devouring profits, and the occurrence of incremental profits, or even profit inversion, so it is inevitable that the management upgrade of dealers should at least achieve the matching of internal management capabilities (costs) and external operating capabilities (performance);
3. The dealer's traditional distribution price difference profit model has indeed been seriously squeezed, and involution is inevitable. The development of dealers cannot adhere to a single product operation model, but must be innovative.
At present, there are more than a dozen innovative profit models for dealers, which can be divided into four categories:
First, from product profitability to product portfolio profitability, that is, based on the operating structure, the functional positioning of various products. For example, the function of some products is to open channels, the function of some products is to use brand influence to bring out the company's reputation, the function of some products is to run traffic, the function of some products is to make profits (such as third- and fourth-line products, high-end new products, private label goods, etc.), the function of some products is to share costs, the function of some products is to earn the expenses of upstream manufacturers, the function of some products is to exercise the business team, and the function of some products is to test the waters across industries, based on the integration of various functions, to achieve the integration of operations. Continue to optimize efficiency and cost to ensure the final overall profitability, among which, the profitability of some products can be sacrificed to protect the overall situation.
Second, the terminal sinks again. The sinking of traditional dealers is to the retailer, and then the retailer sinks to the consumer family, and now there are many dealers who have begun to sink to this level, for local consumer family users, through community promotion, user referral, online ordering, local door-to-door delivery, etc., bypassing traditional retailers, and not through the community e-commerce platform, but directly establishing the procurement relationship between dealers and thousands of local consumer families, forming a small private domain e-commerce in the local area, especially in the kitchen category and bathroom category. The operating model is already relatively mature.
Third, enlarge closed channels (group buying, unit purchases, retailers in closed places). Compared with the price, brand and product comparison of public circulation retail channels, closed channels are more interested in enterprise service capabilities, professional whole-process guarantee capabilities, and even the accumulation of customer relationships. For dealer owners who do local business with locals, playing closed channels has a unique advantage.
Fourth, non-product profits. This way of playing is more, directly jumping out of the traditional product profit model, by providing the fission of the entrepreneurial platform, the merger of upstream and downstream, the unified warehouse and distribution for peers, the service supply of downstream terminals, the investment of upstream manufacturers, the broker, and the provision of agency operation services for state-owned enterprises to enter the circulation industry, etc., can still be profitable, and some operation methods are also asset-light operations, avoiding the accounts receivable problem of traditional operations.
All in all, from product distribution to localized operators, there are more and more innovative profit models for dealers, and the product, in the eyes of some new dealers, may be just a bridge, or even just a stepping stone, and it is no longer important whether the product can bring direct profits.
Gone are the days of making money on the spread!
Most of the dealers came from the era of making money from the price difference, and completed the original accumulation. However, the market is changing, consumers are changing, and channels are changing, and it is becoming more and more difficult to make money from price differences.
First of all, upstream and downstream prices are more transparent. Especially for first-line brands, the cost, ex-factory price, profit and other aspects of the product have been very transparent, and everyone knows very well that the difference that dealers can earn is very limited. Coupled with the upstream and downstream pressure goods, credit sales and other problems, dealers can make less and less money.
Second, the influence of e-commerce is increasing. While e-commerce is impacting the offline market, it is also disrupting the price system. In the past two years, the phenomenon of price inversion has become more and more serious, and the online price is even lower than the price of the dealer, and the most direct result is that the terminal product cannot be sold, the dealer's warehouse is full, and the profit continues to decline.
In addition, the impact of channel changes has also had a great impact on dealers, especially mass stores. The rapid rise of scale and low prices have greatly affected the sales volume in the terminal market, making dealers feel that everyone is in danger. In addition, supermarkets such as Hema Fresh are gradually increasing the development of their own brands, further cutting the market that dealers can control.
For dealers, the era of making money by price difference has passed, and the era of relying solely on involution competition has also passed.
Keep pace with the times to survive!
Dealers are the link between manufacturers and terminals, the position is very complex, coupled with the changes of the times, dealers want to survive, can only continue to improve themselves, continue to innovate, and constantly change the mode of operation.
In the past few decades, the pattern of the food industry has changed, from incremental market competition to stock market competition, and it is becoming more and more difficult to increase sales. While the overall market is changing, various brands are also changing, products are constantly updated and iterative, marketing models are constantly adapting to consumers in different periods, and distribution models are also constantly changing. In addition to mom-and-pop stores, supermarkets, convenience stores and other models, the rapid rise of new retail and the rapid development of mass retail are all affecting the market.
Every role in the upstream and downstream is changing, and it is difficult for dealers to rely on the past model to survive in the new market. The change of dealers has become inevitable for development, and only by constantly exploring the new model that is truly suitable for themselves and in line with their own situation can they gain an advantage in the competition in the market.