300 employees were laid off at one go. It is too painful for a general merchandiser to transform into a high-end seller!

In the turbulent environment of 2021, the old issue of "transforming from general merchandise to high-quality goods" has once again come to the forefront.

As we all know, it is not easy to transform wholesale goods into high-quality goods. Sellers all go through the pain of changing their business thinking, overhauling their teams, reducing suppliers, slow cash flow turnover, etc. It is either a rebirth or a complete failure.

So, for the current distributors who have to transform, how can they transform successfully? How can they avoid the pitfalls in the transformation process? How long will the transformation period take? How should products, supply chains, teams, etc. be transformed?

The difficult road to transformation into a boutique: 300 layoffs

On the road to transformation into a high-quality product, veteran eBay seller Lao He experienced two setbacks.

In 2013, a large number of eBay sellers led the market, but as the competitive barriers of the distribution model became lower and lower, a large number of sellers poured in, and profits continued to decline. In order to break through, in 2019, Lao He began to try to transform into a boutique. He formed an Amazon team based on the original team, worked for more than half a year, and ended in failure.

Lao He attributed the failure to "wrong people and wrong business ideas."

In 2020, he formed a new Amazon team led by a person with extensive Amazon operation experience. But after all the hard work, Lao He still encountered two major difficulties:

First, how to optimize the boutique model team?

Second, how to develop products in a boutique model?

In practice, he realized that the boutique model is no longer suitable for talents who are quick to enter and exit to distribute goods; the team's talent structure cannot be too single. In addition to operations, more product talents, supply chain talents, management talents, etc. are needed.

He also realized that, unlike the public model selection thinking, what is more important is product development. Under the boutique model, the development cycle of each product is as long as half a year to a year, and after it goes online, it needs to be continuously iterated based on user evaluation and demand. It is even necessary to set up a special product manager position to focus on the early stage of product research, accurate product definition and product design, etc.

"Everyone understands the principle, but it is still not done well in practice. I once lost nearly 10 million yuan in the development of a product." Like Lao He, many distributors also realize the importance of transformation, but have fallen into too many pitfalls in transformation planning, business thinking, organizational structure, and practical implementation.

Coincidentally, a seller with a sales volume of 500 million yuan achieved a leapfrog growth during the epidemic last year, and the team expanded by 200 people. But when the industry calmed down, the model of adding people, products and performance was no longer feasible. At the same time, with the failure of the transformation to the independent station group model, the seller had to lay off 300 people.

Laying off 300 employees is already a major adjustment in the company's strategy, but it still faces the choice of going left or right - going left to continue distributing products, going right to transform into a boutique ...

Successful cases: Exploring the path to transformation into a high-quality brand

Is the distribution model really that bad? Actually, it is not.

As analyzed by Chen Xianting, vice president of Yicang Technology and founder of Dolphin Business School, in the ten-year cross-border journey, there are opportunities in the three paths of brand, boutique, and distribution. The key lies in how distribution sellers build core competitiveness.

However, for those who want to break out of the cocoon and be reborn, how should they build long-term competitiveness? Here are a few thoughts:

Build system capabilities: Invest heavily in R&D and technology to build strong ERP system capabilities, use IT big data to screen out products with market popularity, and coordinate internal and external management.

Supplier management: The suppliers selected by sellers should help them improve their capital turnover and inventory turnover as much as possible to minimize risks. For example, only those who can cooperate with sellers in terms of payment, cost and even R&D are the most suitable suppliers for long-term cooperation. Thousands of suppliers across the country are managed through system and data capabilities.

Emphasis on product development team: from general merchandise to high-quality products, we can move towards general merchandise + brand dual-line, from single general merchandise to multi-channel, multi-brand operation mode, the core is to meet consumer needs. Integrate high-quality products, improve product structure, product quality, product independent intellectual property rights, etc.;

Management of logistics capacity: Build a logistics service provider matrix to quickly deliver various orders generated by different sales model channels to different consumers around the world at preset routes and speeds, and realize rapid delivery of global orders.

Management turning point: from extensive to intensive, with emphasis on talent and organizational capacity building.

Distribution is still distribution, but it is no longer limited to "distribution". In fact, it is a "cross-border new retail" with global pan-channels, pan-category, agile and flexible supply chain, and fast order fulfillment. Behind it is the "new role" of distribution supported by smart retail technology with efficient operation management capabilities, internal and external risk control capabilities, and intelligent data collection, analysis, classification, processing and application.

There are also many successful cases in the industry of transforming from general merchandise to high-quality products, such as the big-name Huanjin and Aojie. Their growth paths are obvious to all.

The above are only some thoughts about the sellers who distribute goods. For more specific discussions on the growth strategies of sellers with different models, Chen Xianting, Vice President of Yicang Technology and Founder of Cross-border Dolphin Business School, will share at the "2021 Third Cross-border E-commerce Operation and Management Conference" on September 28.

At the same time, the conference also invited major sellers such as Lens Technology, Lilanda, Huanjin Technology, and former vice president of Tongtuo to discuss "the key elements and successful paths of transforming distribution into high-quality products."

  (After communication, we have secured 20 preferential places for you. The original price of 699 yuan for the conference ticket will be reduced by 200 yuan. Scan the QR code to get it.)

In addition, this management conference also brought together more than 10 industry experts, including Fan Deng, author of "Replicable Leadership", Hong Hua, Xiaomi's best-selling product expert, and Shen Mingjiang, a senior expert with 19 years of supply chain experience , to help sellers build their company's sustainable growth capabilities.

Whether you are a general merchandise, boutique, or brand seller, you may find answers to your confusing questions at this conference.

Boutique Sellers

Sellers