Summary of Key Points
Recently, the prosperity of several major wholesale markets across the country (such as Changsha Gaoqiao and Zhengzhou Bairong) has begun to wane: the fees for leasing shops have dropped from 2 million yuan to the point where no one wants to take them even for free. As a result, the number of customers visiting the markets has decreased, orders have become sporadic, and profits have become extremely thin. The original customers have either been eliminated by chain retail companies or have become franchisees of these chains, with purchasing power now centralized at the chain headquarters, which no longer source goods from wholesale markets. However, the demand for product distribution has not disappeared; it has simply shifted to chain headquarters, platform-based supply chains, or new types of service providers. Some dealers are barely surviving by operating through multiple channels and upgrading their services (such as helping with product display and managing inventory). In the future, wholesale markets will no longer be the core of the distribution process, and dealers will need to transform from passive "shopkeepers waiting for customers" into proactive "supply chain partners."
1. The Current State of Wholesale Markets: From Thriving to Desolate
In the past, wholesale markets were highly sought-after: a well-positioned shop could be sold for 2 million yuan, and customers would compete to purchase goods (even if the quantity was less than 5 boxes). Now, however, they have become deserted—no one wants to take over the shops, and dealers must actively seek customers, offer payment terms, provide after-sales support, and handle last-minute orders. For example, a dealer in Changsha Gaoqiao reported a significant decline in business in the second half of 2024, with large shops remaining unoccupied and unsold. The monthly sales of a certain health and snack dealer dropped from 10 million yuan to 4 million yuan, resulting in only a 1-2% profit margin. Even more distressing is that, despite the relatively stable sales volume, dealers must rely on developing customers outside the province, opening additional warehouses, and expanding into e-commerce to maintain their operations, which means "working harder for less money."
2. Where Have the Customers Gone?
Customers haven't disappeared; they have simply been "reabsorbed" by chain businesses. Small shops (such as family-owned businesses or independent snack stores) have either been taken over by chain brands or have become franchisees, with the purchasing power moving from individual owners to the chain headquarters. For instance, a regular customer of a health and snack dealer suddenly stopped ordering, only to be discovered to have become a franchisee of a chain brand. Chain brands initially relied on wholesale markets for their supplies (for example, when the brand first opened, Gaoqiao dealers helped with order fulfillment), but as they grew, they established their own central warehouses, directly connecting with the brands and factories—effectively making the chains the largest intermediaries and squeezing out the original wholesale market dealers. This trend is not unique to the snack industry; family-owned stores are also being absorbed by convenience store chains, and individual supermarkets are joining regional supply networks, turning scattered purchasing demands into large, centralized orders, leaving wholesale markets with little business.
3. The Demand Has Not Disappeared; It's Just Moved
The need for products to be purchased by stores and sold by brands still exists, but the places where these transactions occur have changed. The processes of selecting, organizing, and delivering goods, which used to happen at wholesale markets, have now shifted to the central warehouses of chain headquarters, platform-based supply chains, or new service providers. For example, a cosmetics dealer saw its community团购 business halve, but by diversifying its channels (including supermarkets and direct sales to stores), its overall business remained stable. Another platform-based supply chain dealer managed to retain customers by offering a wide range of products and fast delivery services. Although it didn't have a price advantage, it could quickly adjust its inventory to meet the needs of snack stores and convenience stores and even sent staff to help with product display across cities.
4. Dealers That Survive: Transforming from "Shopkeepers" to "Proactive Businessmen"
Dealers that want to survive must abandon the traditional approach of waiting for customers and take a more proactive role:
- Multi-channel Operations: Instead of focusing solely on wholesale markets, they must also serve supermarkets, e-commerce, community团购, and convenience stores to diversify their risks. For example, the aforementioned cosmetics dealer represents more than 40 brands and serves nearly 4,000 customers, stabilizing its business through multiple channels.
- Upgraded Services: They must go beyond just selling products; they also need to provide additional services such as product display, handling last-minute orders, offering payment terms, and fast delivery. Customers now expect not only low prices but also small-batch restocks, return and exchange options, and after-sales support, which have become crucial for retaining them.
- Becoming Platform-Based Supply Chains: By integrating thousands of product listings and quickly organizing orders based on the needs of different customers (such as snack stores and supermarkets), dealers can act as the "back-end warehouses" for retail businesses. Some dealers even have dedicated customer service teams that can assist with product display across cities when needed.
5. The Future Trend: Wholesale Will Not Disappear, but Wholesale Markets Will Not Be the Center of the Action
The role of dealers will not disappear; products still need to be organized, stored, and delivered. However, the future of wholesale will not involve traditional market operations. Instead, it will be carried out by:
- Supply chain departments of chain headquarters (which handle order fulfillment and delivery themselves),
- Platform-based supply chain companies (which organize and deliver goods for multiple retail brands),
- Professional service providers (which help brands manage inventory and boost sales at the retail level).
As a veteran dealer with over 30 years of experience put it, "Dealers won't disappear; they'll just change their names and take on more responsibilities—no longer waiting for customers to come to them, but actively seeking them out and helping them solve their problems."
The prosperity of wholesale markets may not return, but the demand for wholesale services will always exist; it's just that the way these services are provided will change.