Positive Reviews: Early Warnings of Industry Transformation and Clear Guidance on Transformation Paths, Providing Key Insights for Dealers to Break Through Dilemmas
This industry observation on the “major reshuffle of dealers in the next five years” is based on real – life cases from on – the – ground visits. It accurately captures the core dilemmas faced by traditional dealers. Its value lies not only in sounding the alarm for industry transformation but also in providing actionable paths for cognitive upgrading and data – driven tools for dealer transformation, which has strong practical guiding significance.
Firstly, the article’s diagnosis of industry pain points hits the nail on the head. The “difficulties” of traditional dealers essentially stem from the structural contradictions between the old growth logic and the new market environment. In the past thirty years, the success of dealers relied on the two – dimensional model of “regional agency rights + cost control”: obtaining regional monopoly status through brand authorization and then earning meager price differences by compressing explicit costs such as logistics, warehousing, and manpower. However, with the payment term squeeze from NKA (large – scale chain retailers) and the “dimensionality reduction attacks” from snack discount stores and live – streaming e – commerce, this logic has completely failed. The former dilutes profits through channel hegemony, while the latter directly reconstructs the connection mode of “people, goods, and places”, disintegrating the survival foundation of dealers with extremely low customer acquisition costs and extremely high turnover efficiency. The article uses the analogy from “two – dimensional competition” to “three – dimensional rules” to vividly reveal the essence of the problem: dealers’ opponents are no longer their peers but new species that “cross – border forage” with completely different business models. This insight into the changes in the underlying industry logic helps dealers break out of the emotional complaints about the “deteriorating external environment” and instead examine the core issue of their own cognitive lag.
Secondly, the proposal of data thinking and the implementation of practical tools provide dealers with a key grip to move from “ambiguity to clarity”. The article emphasizes that “no decision can be made without data” and transforms complex business problems into quantifiable analysis frameworks through tools such as the “product quadrant chart” and the “customer quadrant chart”. For example, a four – quadrant analysis of 1911 SKUs of a dealer shows that 55% of the sales volume comes from “traffic – driving products” with low gross margins, and nearly 30% of the SKUs belong to “products to be phased out”, which directly explains the contradiction of “rising sales volume but declining profits”. This data – driven analysis can not only quickly identify problems such as inventory backlogs and resource misallocations but, more importantly, transform “veteran experience” into standardized organizational capabilities. New salespeople can master product strategies in three months through quadrant labels, solving the pain point of the traditional model that “relies on old employees and is difficult to replicate”. In the implemented projects, cases where the return rate has dropped from 8% to 2.2% and the net profit has increased by 118% further verify the practical value of data thinking. This methodology of “illuminating business with data” provides a replicable path for dealers to shift from “experience – driven” to “scientific decision – making”.
Finally, the prediction of future survival forms points the way for dealer transformation. The three forms of “supply – chain service providers”, “service – oriented operators”, and “brand operators” proposed in the article are essentially the upgrading paths for dealers from “product handlers” to “value creators”: from simply relying on brand authorization to deeply participating in product operations (supply – chain service providers), brand market construction (service – oriented operators), and even creating their own brands (brand operators). The core of these three forms is that dealers establish deeper binding relationships with upstream and downstream through enhancing their “product power”, “marketing power”, and “brand power”, thereby gaining irreplaceability in the new market rules. For example, supply – chain service providers provide differentiated product solutions by understanding regional consumption habits, which is essentially transforming “channel advantages” into “demand – understanding advantages”; service – oriented operators sharing market responsibilities with brands is upgrading from an “executive role” to a “strategic partner”. The proposal of these directions prevents dealers from falling into ineffective attempts such as “blindly taking on new products” and “price – cutting competition” and instead guides them to choose suitable transformation paths based on their own resources.
Negative Reviews: The Gap between the Ideal and Reality of Transformation Paths, Need to Be Wary of the “Implementation Traps” of Cognitive Upgrading
Although the article’s judgment on industry trends and the proposal of transformation tools are inspiring, the real – world obstacles to the transformation of traditional dealers need to be viewed rationally. Some viewpoints may underestimate the complexity of transformation, and further discussions are still needed on the costs of dataization, the organizational inertia of traditional enterprises, and the implementation difficulties of the three forms.
Firstly, the “cognitive threshold” and “implementation cost” of data – driven transformation may be underestimated. The article emphasizes that “data thinking is not about buying software but about rejecting ambiguity”, but in actual operation, dataization needs to start from the basic tasks of “inventorying inventory, customers, and SKUs”, which is not easy for many small and medium – sized dealers. For example, some dealers may not even have popularized the basic ERP system, let alone build the “sales volume – gross margin” data model required for the product quadrant chart. Even if data can be collected, interpreting the data and transforming the analysis results into business actions (such as cutting SKUs and optimizing the customer structure) requires the team to have basic data analysis capabilities. In addition, dataization may involve adjustments to the organizational structure. The “family – style management” and “salesperson – dominated” models of traditional dealers may conflict with the standardized processes driven by data. For example, cutting SKUs may damage the vested interests of some veteran salespeople (such as relying on certain high – volume but low – margin products to complete KPIs), thus causing implementation resistance. The case of “new salespeople mastering product strategies in three months” mentioned in the article may be more applicable to enterprises with a certain management foundation, while a large number of small and medium – sized dealers may need more time to upgrade their organizational capabilities.
Secondly, the implementation of the three transformation forms places higher requirements on the resources and capabilities of dealers, and not all enterprises can “choose as needed”. For example, supply – chain service providers need in – depth product operation capabilities, including market research, product selection, and customized development, which requires the enterprise to have a professional procurement and product team. Service – oriented operators need to establish strategic trust with brand owners, which usually requires long – term cooperation and market performance endorsements. Brand operators need stronger brand – building capabilities and terminal network control capabilities, which may involve R & D and marketing investment in their own brands and even the layout of offline stores. For many dealers who rely on “regional agency rights” for survival and have long been in the role of “handlers”, building these capabilities requires a large amount of time and resources, and the time window for the industry reshuffle (the next five years) may not allow all enterprises to complete the leap from “0 to 1” in capabilities. In addition, the “combination” of the three forms may also increase the management complexity. For example, simultaneously engaging in supply – chain services and brand operations may require balancing the resource allocation of different business lines, posing higher challenges to the enterprise’s management capabilities.
Thirdly, the article may oversimplify the impact of “cross – border competition”. The rise of new species such as snack discount stores and live – streaming e – commerce has indeed reconstructed the retail channels, but traditional dealers are not completely passive. For example, some dealers have tried to reach end – consumers through “community group – buying” and “private domain traffic”, and some regional dealers still maintain certain advantages with “localized services” (such as instant delivery and small – batch replenishment). The judgment in the article that “80% of dealers will exit the market”, although based on industry observations, may ignore the diversity of the dealer group. Dealers in different industries (such as food, daily chemicals, and home appliances) face significantly different competitive pressures, and dealers in some niche segments (such as niche products with high gross margins and low turnover) may still have room for survival. In addition, the adjustment of brand owners’ channel strategies (such as shrinking online direct sales and strengthening support for regional dealers) may also affect the speed of the reshuffle, which the article does not discuss in depth.
Suggestions for Entrepreneurs: From “Seeing Clearly” to “Doing Right”, Build Transformation Capabilities in Stages
Facing the pressure of the industry reshuffle, dealer entrepreneurs need to focus on “cognitive upgrading” and promote transformation in stages based on their own resources. They should pay attention to the following key directions:
Start with “Data Inventory”, “Illuminate” First and Then “Act”
Dataization is not a one – time investment but a long – term habit starting from basic actions. It is recommended that entrepreneurs first sort out core business data:- Product dimension: Count the sales volume, gross margin, and inventory turnover days of each SKU, identify “star products”, “traffic – driving products”, “profit products”, and “products to be phased out”, and prioritize cleaning up ineffective SKUs with low sales and low profits to relieve warehousing and capital pressure.
- Customer dimension: Analyze the order volume, gross profit contribution, and payment term cost of each customer, distinguish “high – value customers” from “inefficient customers”, and concentrate resources on customers who can bring profits.
- Cost dimension: Break down implicit costs such as logistics, warehousing, and manpower. For example, calculate the “warehousing occupancy cost of each SKU” and the “gross profit coverage of each customer visit by salespeople” to avoid “saving money” becoming “wasting resources”.
In the initial stage, entrepreneurs can use Excel or lightweight ERP tools (such as Kingdee Cloud Star and Guanjiapo) to complete data sorting. There is no need to pursue a “high – end” system. The key is to discover problems through data.
Choose a “Step – by – Step” Transformation Path Based on Your Own Resources
The three transformation forms (supply – chain service providers, service – oriented operators, and brand operators) have different resource requirements. Entrepreneurs need to choose an entry point based on their own advantages:- If they have a regional channel network and localized service capabilities (such as instant delivery), they can prioritize transforming into “service – oriented operators”, strengthen the depth of cooperation with brand owners (such as undertaking regional market promotion and consumer cultivation), and shift from “selling products” to “helping brands sell products”.
- If they are good at product selection and product operation (such as being sensitive to regional consumption preferences), they can try the “supply – chain service provider” model, provide differentiated product combinations for small – scale terminals (such as community stores and convenience stores), and improve customer stickiness.
- If they have brand operation experience or financial strength, they can explore the path of “brand operators”, shift from agent brands to co – researching and customizing products with brands (such as region – specific flavors) or incubate their own brands (such as producing region – characteristic products through OEM), and gradually gain control over pricing and terminal markets.
In the initial stage, they can focus on a single direction to avoid resource dispersion and expand after the capabilities are verified.
Break Through “Experience Dependence” and Build Replicable Organizational Capabilities
The “veteran model” (relying on the experience of old employees) of traditional dealers is a bottleneck for large – scale development. This limitation needs to be broken through standardized processes and training systems:- Transform tools such as the “product quadrant chart” and the “customer quadrant chart” into business manuals. For example, stipulate that “new salespeople should prioritize promoting star products and reduce the recommendation of products to be phased out”.
- Establish a data – driven KPI system. For example, include “SKU gross margin compliance rate” and “customer gross profit contribution” in the assessment instead of simply focusing on “sales volume”.
- Regularly organize data review meetings. Through case analysis (such as “why a certain SKU has changed from a profit product to a product to be phased out”), improve the team’s data sensitivity and gradually integrate “data thinking” into daily decision – making.
Pay Attention to “Cross – Border Cooperation” and Find Survival Space in the Ecosystem
Facing the impact of new species such as snack discount stores and live – streaming e – commerce, dealers can actively seek cross – border cooperation instead of competing passively:- Cooperate with community group – buying platforms, use their traffic to reach end – consumers, and at the same time give full play to their own advantages in localized warehousing and distribution to become the “regional fulfillment service providers” of the platforms.
- Jointly carry out “offline experience + online purchase” activities (such as pop – up stores) with brand owners, transform their own warehouses into “front – line warehouses”, and improve inventory turnover efficiency.
- Participate in regional retail alliances, share customer data and supply – chain resources with other dealers and terminal stores, reduce procurement costs, and jointly cope with the squeeze from new channels.
Conclusion: The reshuffle of dealers in the next five years is essentially a competition between “cognitive ability” and “adaptability”. Entrepreneurs need to break out of the “past success logic”, use data as a tool and value creation as the core, and make the “right choices” based on a clear understanding of the business. The key to transformation is not to “imitate new species” but to find their own irreplaceability in the new ecosystem. Whether it is supply – chain services that better understand regional needs, deeper brand cooperation, or more flexible terminal control, the 20% that ultimately survive will surely be those enterprises that “solve new problems with new cognition”.
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