How do traditional foreign trade b2b companies transform into foreign trade B2C cross-border e-commerce?

In fact, this is a good question. As a veteran foreign trade driver with nearly ten years of industry experience, I will try to answer this question from the next two dimensions:

1. Why transformation ?

2. Pains during the transformation process!

Why transform? Let’s take a look at a simple picture first:

The above red + blue arrow is a very mainstream traditional B2B product circulation ecological path.

In this process, the factory is responsible for processing and producing and earns a processing fee of 0.5 US dollars for each product. The foreign trade company (if it is a manufacturer with industry and trade capabilities, this link is omitted) follows as a leather bag dealer. Earn $0.5 profit. The majority of the entire industry is taken away by channel dealers, retailers and brand owners, and the profits are several times that of the above two companies.

This is a traditional structure that has been stable and harmonious for decades. We would think, why do retailers and brands take the majority of the industry?

That must be because they have done a lot, worked for a long time, and have core resources!

Product design, core technology, brand patents, channels, after-sales, and marketing are all in the hands of brands and retailers, and it is understandable that they take away most of the profits. This kind of ecology will definitely last for a long, long time, but we won’t express it for now.

Everyone knows that in the entire foreign trade process, the majority of profits are in the midstream and downstream industries that have channels and resources. So, this part of the profits can be touched by the monks, but we cannot? !

This is certainly not the case, and it should not be the case. Thanks to the strong development momentum of the Internet and e-commerce, online retail has begun to allow our Chinese suppliers to directly face foreign consumers and trade with them. This is what we call "cross-border e-commerce." Currently, more and more factories and trading companies are actively transforming or developing retail channels. As marked by the green and blue arrows in the picture above, more and more Chinese factories and merchants are joining in the gank directly with European and American retailers.

Thanks to the Internet and the increasingly perfect international logistics system, things that were out of reach in the past and that Chinese suppliers dared not think about or do are increasingly becoming a reality. A series of marketing platforms such as Amazon, EBay, SMT, even ALIBABA, and self-built websites can provide our local merchants with more and more opportunities to sell products directly to European and American consumers.

However, this road is destined to not be smooth. It should be noted that although retail and manufacturing itself have a mother-child relationship, it is not easy to open up these two lines of responsibility and supervision and practice the magic of one.

Now I will focus on the pain points, difficulties and key points of 2B transformation to 2C.

1. Embrace change and take the initiative to choose is the best policy!

I have seen many factories and traders find that the competition in the 2B market is becoming more and more fierce and profits are becoming increasingly shallow, so they start to seek medical treatment urgently, look for other channels, and take advantage of the trend to start retailing. It's not necessary for fun. Regardless of retail, wholesale or bulk import and export transactions, products are our core and competitiveness is the source of our profits. Regardless of channels and markets, maintaining strong vitality is our primary goal. To transform cross-border e-commerce, we must do it early, quickly and steadily! By the time our products lose their competitiveness, it will be too late no matter how we transform. Moreover, for a dynamic product, industry and market, 2B and 2C are not exclusive and can go hand in hand and develop together. If, as factories and traders, we find one day that our products are no longer viable, what’s the point of transitioning to retail?

2. Intellectual property rights are an unavoidable pain

In the cross-border circle, everyone is looking for resources and supplies. There are awesome factories and terrible products everywhere, but I want to speak out loudly. Three voices:

What you can produce does not mean what you can sell!

What you can produce does not mean what you can sell!

What you can produce does not mean what you can sell!

“Thanks to” our country’s long-standing problem of not paying attention to intellectual property rights, infringement issues have always been a stubborn problem in cross-border e-commerce. What is certain is that this problem will continue to exist for a long time to come.

Rome was not built in a day, and neither is a brand. To do long-term business, brand awareness and intellectual property rights must attract the close attention of our domestic merchants. Factories and traders must also strictly demand themselves. In the past, they were OEMs and followed the law. On the edge, misfires may be minor problems. Once it is determined to transform and face consumers and the retail environment, failure to handle such principled issues will only lead to disaster.

At present, all major mainstream platforms basically have zero tolerance for infringement issues, ranging from removing products from the shelves to freezing accounts and confiscating payment.

3. Transformation requires a complete emancipation of the mind and respect for the rules of the retail game

Cross-border retail e-commerce belongs to the retail industry, which is an asset-heavy industry. But with the halo of "e-commerce", it has greatly reduced the burden on our merchants. It’s good to be able to sell products directly overseas without having to do offline layout and without massive funds for infrastructure construction. However, if we still stick to some B2B thinking patterns to operate this business, it will not be appropriate.

Here I will briefly talk about some common difficulties and pain points in implementation (not comprehensive but relatively common):

Decision makers are unwilling to do inventory, do not want to do marketing, and do not want to They only keep inventory and are unwilling to invest in product development. (For example, a boss is determined to start an Amazon business, but he is not even willing to issue FBA. For example, a factory wants to do e-commerce, and searches the entire sample room and warehouse, but finds that there is no product that belongs to him, and it is all dog meat that cannot be put on the table. . . . )

There is no team building and talent allocation (the boss expects the salesperson to achieve extraordinary results by himself, but ignores that e-commerce is a team effort)

Be greedy for more and seek perfection, but do not operate carefully. (Have you ever heard the boss make bold statements: We will open all channels, open ten accounts on a certain platform, and we will spread our products on all pages... What is the result? Of course, in the end, the operation results are not good. Ended sadly)

Disrespected foreign consumption habits, formulated products and customer service strategies that were not in compliance with European and American retail rules (Performance: Provided low-quality or infringing products, or did not comply with European and American laws and regulations, customer service did not serve the interests of consumers Departure, returns, exchanges, refunds, etc. were not handled properly. As a result, the listing was removed, a large number of complaints were made, and the account was closed)

Heavy electricity and minor injuries (performance: poor performance, not fundamentally correcting the problem) Look for product reasons, but look to marketing and skills to put the cart before the horse. In retail business, products and supply always come first. If the skin is not there, why should the hair be attached? )

Unfavorable supply and lack of logistics. (Most factories and traders may still focus on traditional OEM orders. Even if they try retail channels, they are currently in a testing state and have not gone all out. This may lead to a problem. The entire company system has not yet The connection with the retail part is perfect, and it cannot meet the stable supply status of a retail requirement. Traditional orders are made to order, one carrot for each pit, but the retail requirement is to prepare in advance, produce quickly, and deliver products into inventory stably and quickly. Putting it on the shelves for sale, this takes time and running-in)

The above are just some of the phenomena, and in reality there may be more problems. . .

Transformation means returning to zero. Transformation is accompanied by labor pains.

However, once the two channels of Ren and Du are opened, it is possible to practice magical skills. Only those made in China have the opportunity to go abroad, become a Chinese brand, and go global!