Where does the money earned by WeChat business come from?

　　When facing new things, some people do it without caring about it, and my habit is to think clearly about what their internal logic is. Maybe you won’t get the industry dividends, but you won’t go astray either.

　　Wechat business actually observed it for a long time, but it still felt like watching flowers in the fog. Some people think that WeChat business is a revolutionary retail model, some people think that WeChat business is purely a fraud, and some people think that WeChat business is just another Taobao. What exactly is a WeChat business? Are the luxury car banknotes posted in your circle of friends real? Is WeChat business a pyramid scheme?

　　Retail Logic of Wechat Business

　　On the surface, the retail logic of micro-businesses is very attractive. Given that the retail market is now in a tired period, consumers no longer have enthusiasm for the dazzling and annoying products and trust the dazzling and annoying marketing information. Merchants cannot sell their products quickly and at low cost, and consumers cannot easily buy the products they need.

　　An ideal retail scenario: In the future, users may no longer need to consider what to buy online or offline, or even whether they have to wait until Double 11 to buy. Because shopping should not be a difficult problem, but a happy thing.

　　The logic of micro-business is to use social tools to create personal trust and then sell products. Taking WeChat Moments as an example, the target customers are imported into private WeChat accounts, and gradually win the trust of the target customers through the display of real life scenes, real product characteristics, and real personality characteristics, and then the transaction is achieved.

　　This model has the following benefits:

　　1. Strong premium ability

　　WeChat Moments are not like Taobao. They are not designed to sell products. There will be thousands of choices when buying a sweater. Consumers can judge and choose from price, fabric, color, style and other aspects, and make their interests famous. Selling goods in the circle of friends is random. When I browsed the circle of friends, I happened to see a certain product and thought it was appropriate, so I bought it. At this time, your only criterion of judgment is the few photos, introductory texts posted by the merchant and the trust in the merchant. It is impossible to judge whether the product is a three-no product and whether the price is inflated. Therefore, the popular selling of single products is often a few products with less famous products. It is normal for a cost price of 20 to sell 100 on WeChat Moments. Products such as Hippodrome and Coca-Cola with transparent price systems are rarely sold through WeChat channels.

　　2. Help consumers complete product screening work

　　In fact, consumers do not need too many shopping options, and over-rich products are a kind of pressure. When selling products, WeChat businesses often only give consumers few shopping options. Although some customers who cannot meet their needs may be lost, the rest are all "deathful fans". What's more, what WeChat business does is a refined fan business.

　　2. The competition environment is simple

　　Consumer attention is a very scarce resource. Whether it is offline physical stores or e-commerce platforms like Tmall and JD.com, shopping options are often very rich and diverse. Consumers' interests will shift from another more interesting and attractive product or event anytime, anywhere. However, in the retail environment of micro-businesses, similar products often have no competitors. Consumers of a type of product often leave only one merchant, which invisibly reduces the costs spent by merchants on their competitors.

　　3. Emotional energy

　　With the improvement of consumers' living standards, the improvement of product material performance can no longer stimulate consumers' desire to buy as before. Whether the product can be given cultural connotation and emotional interest has become an important part of product competition. The advantage of micro-business is to serve every intended customer one-on-one, while endorsing the product with the merchant’s personal charm. Compared with high-end brand products, micro-business products are often down-to-earth, with their own small and beautiful brand stories, and merchants are also willing to serve consumers. Many times, such one-to-one service is even the most important reason for consumers to purchase.

　　Whose money does WeChat business make?

　　Based on the above reasons, WeChat businesses have their own advantages over traditional retail. If they can really go on like this, it will be a new retail channel. But the fact is that what really drives the explosive development of micro-business is not the above product logic, but the agency logic with getting rich as the core driving force. In many cases, even products are only circulated in the hands of agents and cannot reach the hands of end consumers at all.

　　The essence of retail is goods and customers. The success of any business model cannot be separated from meeting consumers' needs. My main doubts about WeChat business are that the success of any new business model must be due to solving certain social needs, improving business efficiency or simplifying some processes, but WeChat business's innovation in this regard does not seem to be enough to support the speed of getting rich as he advocates.

　　If you want to have an advantage in product and price, it is ideal to have only one layer of micro-business between brand owners and terminal consumers, but the reality is that brand owners do not have the ability or willing to manage thousands of individual terminal micro-businesses. A small number of terminal micro-businesses cannot digest the massive amount of products from brand owners. Expanding the scope will inevitably require agents at all levels to return to the old path of traditional products sinking: brand owners - hierarchical agents - terminal retailers - consumers. It means that WeChat business is just copying the routine of traditional product circulation to WeChat Moments, and has not made any innovation in efficiency and process.

　　So the question is, since WeChat business has not made major innovations, where did the BMW and money that WeChat business advocates come from?

　　Normally, the profits of a business model should ultimately come from product sales, but the profits obtained by micro-businesses through product sales are obviously unable to realize their own wealth-making myth.

　　The real customers in the micro-business model are no longer end consumers who purchase products, but agents who hold the dream of getting rich.

　　The general agent relies on good or bad products, skilled marketing skills and rich resources to build agents at all levels through a team management system. Products are no longer the core, and building a micro-business team of tens of thousands of people becomes the core.

　　If you directly get goods from the factory and reduce the intermediate links, consumers will be affordable and micro-businesses will make the difference, which is great. But now we seem to be developing agents more, and what we earn is also the agency money. So we will see that showing off luxury cars, money, shooting promotional videos, holding exhibitions, and doing training has become the focus of micro-businesses, but there are few actions to promote products.

　　Perhaps it is different from pyramid schemes in terms of legal judgment and behavior, but logically, it is like pyramid schemes to get rich by selling the dream of getting rich. Will the product be sold in the end

　　It is actually not important to go out. What is important is to satisfy the entrepreneurial dreams of the vast number of low-level agents by creating a low-threshold entrepreneurial opportunity and thus obtain profits. In the ideal state, the product is very good, the things can be sold quickly, and will not be accumulated in the hands of agents at all levels, but can the profits obtained from selling products really support the costs required for agents at all levels? I don't think so.

Thank you for your attention and support to Laogao E-commerce Club . Please indicate the source of the reprinting website www.shxuanming.net

 Click to register to apply for the qualification to attend the Laogao e-commerce classroom. Laogao strongly invites e-commerce veterans to teach everyone step by step, increase their popularity and create a hot product, and occupy the first place in the category !