Changing trends in the distribution and management of industrial products

2019-03-16 11:29
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1. Distribution channels are developing in a diversified manner


From a global perspective, with the rise of e-commerce, the flattening of manufacturer channel management, the diversification of contractual relationships and the professional development of distribution services, the traditional distribution model has undergone major changes. The conversion relationship between capital flow, information flow and logistics in the traditional industrial product distribution is no longer unified. Professional logistics distribution services and professional market information business providers are emerging. The previously single capital flow in the distribution field has become diversified, and the roles involved in the provision of distribution services and profit distribution have gradually increased, that is, the distribution channel members have diversified. The business model of product intermediate distributors is also innovating and developing, breaking down from the past single product distribution into diversified changes such as license distribution, brand distribution, channel distribution, value-added distribution and even virtual production. The distribution link is no longer limited to the role of product circulation and delivery, but has evolved into the value-added creation link.


At present, the distribution channels of industrial products in my country have changed from the traditional three-level procurement and vertical supply channels to diversified network channels, and this trend will continue to develop. For example, in terms of traditional direct channels and indirect channels, direct sales methods such as employee direct sales, BB network direct sales, telephone sales, information mailing, and self-established distribution agencies and offices are constantly innovating and developing. Indirect channels sold through intermediate distributors are also differentiated into wholesalers, agents, retailers, dealers, import and export traders in international trade, etc. Various channels are intertwined with each other, and then equipped with different business methods, such as chain stores and franchises, resulting in increasingly complex development and evolution of distribution channels. This is also due to the laws of the market economy. All manufacturers and middlemen are constantly innovating, seeking and exploring new channels. Therefore, the diversified development of distribution channels guided by market mechanisms makes it one of the core issues for manufacturers and distributors to choose what kind of distribution model, because the effectiveness of the channel ultimately depends on the embodiment of the model.


2. The rise of the Internet


The rapid development and popularization of the international Internet has brought revolutionary changes to the transmission capacity, transmission speed and use of information. It has become possible for people to trade through computer telecommunications networks, and a new trade era based on the Internet has arrived. The global online trade transaction volume was only US$2.3 billion in 1996, but by 1999, B2B transactions alone reached about US$43 billion, which shows that its development speed is very fast.


Compared with traditional trading methods, online trading has the following distinct characteristics: (1) Information is more "sufficient", and opportunities for cooperation between enterprises and between enterprises and users increase; (2) The trend of virtualization of commodity transactions is strengthened; (3) Transaction costs are reduced; and (4) Transaction speed is increased.


It is certain that network trade based on information technology will bring about revolutionary changes in traditional trade. Traditional enterprises engaged in industrial product distribution must face up to this change, change or expand the content of distribution services, improve the business management methods, and establish a new distribution service concept - that is, innovatively use new distribution models. In the selection of specific distribution models, it is necessary to establish an information management platform and expand the e-commerce distribution channels based on the Internet, so that product distribution is faster, quicker, and less costly, and to gain competitive advantages in distribution models.


For channel intermediaries, the continuous development of network technology has brought unprecedented impact on their survival space through online direct sales. The reasons why manufacturers adopt this approach are: (1) The cost of sales by manufacturers themselves is lower than the cost of selling products through intermediaries. For example, when the customers of manufacturers are concentrated in a region or there are customers with large purchase volumes, manufacturers generally prefer direct sales; otherwise, they may consider channel intermediaries for distribution. (2) Manufacturers want to control the sales end of the enterprise and take the initiative. Some manufacturers do not have a good channel intermediary to form a strategic partnership, or when they need to control the sales rights of the enterprise due to the special nature of their products, they generally tend to set up their own sales offices and conduct factory direct sales. (3) There are no suitable intermediaries to provide services. For some industrial product manufacturers, due to various reasons such as remote locations, special industrial products produced, products that need to be tailor-made, or customers have special requirements for product installation, use and operation, manufacturers cannot find suitable intermediaries to provide them with distribution services. In this case, these companies have to build their own direct sales network. This new trend of turning to online marketing is undoubtedly a major challenge to the original channel intermediaries.