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Industry observation: why can't kill in the end

Release time:
2018/03/27 16:16
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Many people with abrasives products are not good for this year, it is difficult to make money, dare not calculate the account, calculate fine accounts may be loss; some people feel that they are shrinking in a day, but at a loss, feel low price, do not make money, but there are still lower than their own price. Some people want to push back their peers at a lower price, but they find that the implementation of price war strategy has been for a long time and has not reached the expected goal. Lose, but do not know where to lose. We also watch TV, books and blogs on the Internet. We are all talking about the fact that there is no winner in the end of the price war. We advocate "the standard of the first class enterprise, the second class enterprise grasp the brand", "difference" and "innovation", but how to kill the price, and the details are not detailed. Here we will try to sort out the idea according to the actual situation of the industry.
The account of upstream raw material plant is 30 days per month, with an average of 45 days, and the average account time of terminal cu

 If a factory is mainly sold as a good seller, in order to ensure the supply is not out of stock, the turnover of stock and production is basically 45 days.  Generally dare not be less, because the upstream may also have a time of disconnection, that is to say, the upper reaches of our credit support is basically used in the inventory and production turnover. The downstream debt is due to our net assets in 30 days. Without interest, purchasing power will depreciate at a rate of 10 percent off per year.

To make abrasive belts and make hundred pages of factories, the ideal gross margin of production is usually 10%. Because there are always wasteful, errant, return, entertaining, and basic internal office expenses. So the net profit 5% is one of the key points.
There are many peers who don't evaluate the production excipients loss, equipment depreciation and site rent. Also some colleagues think that the factory is bought, will also appreciate, so do not calculate the cost of the site, then the appreciation of the site actually did not make a profit, but became a subsidy for production, so the net profit of 5% is to be discounted.
After a long time, the factory has long been a long time, the total stock is unsalable in the library, the account is money, in fact still money? Half volume, small pier, the defect can not be used normally can be used to evaluate the price? This loss is usually not obvious, if you move a factory, you know, three years ago, I moved, moving costs plus even throw the loss of 1 million loss with treatment will definitely have. Do you dare to say 5% of the net profit?
One of the colleagues, I only make a net profit of the upstream, according to the above hypothesis can make a profit, but if you move to kill the heart, then want to squeeze out the colleagues, the rebate 100% is to be put in. If you don't pay the rebate, the volume will not come up, the rebate will be posted, the mass production and sales will come up, and there will be no money to earn.
If you move to kill your heart, make a little money in the ideal situation without making money or calculating, and counting the price that does not make money, after a period of time, you will find that the business is bigger, the flow of money is bigger, but the new trouble has come. The production volume is large, the downstream debt is bigger, and the net assets occupied are bigger. This part takes up funds without interest income, and the purchasing power is 10 percent off annually.
For the time being, it is assumed that no expansion is needed, but the output will be large and the cost will be reduced. This is Lido, but it will not be much more to add equipment to large factories. In case of expansion, and the market situation is not good, it will be miserable.
Your current cost is very small.
The wages of the workers, the wages of the workers have risen year by year! Do you add to the workers? Do you have higher wages, is the worker not better, not not only more bad, but also the loss? If you do not add workers but to reduce, then the grand plan to squeeze out the business will not be realized. If you have a salary, the cost will increase, the cost of management is increased, the system enlargement, and the system will be expanded. To control the cost of quality and increase the amount of energy, is it necessary to lose money? If the management cannot keep up, it will lose money faster.  Do you want to manage to keep up with the money you can afford? You do not please, you do, then do you have the energy to sell? Do not do well in sales, can expand the power? So, this is a dead cycle, the killing of the people are not big, soon encountered the bottleneck of development, encountered ceilings.
Do you want to raise the price? When you want to raise the price, you can't find it, there is a colleague in and you to kill, you lose the customer, because you do the goods, who can be transferred to the goods, the replacement is too strong, the price is not good, do you dare to take this risk? The price can be slowly raised, slower than others, your opponent is the same thought, the result is not making money, maybe a small loss.
The increase of processing cost is like the tighter spell of tighter hoops. In the past ten years, the wages of workers have been five times that of the original ones, and the speed is rising more than 15% per year.
We all owe the upstream money and the downstream part also owe us money, so we can't close the door. Everyone must carry on, so even if you are more fierce, your opponent must fight with you, so even if your water volume is bigger, the opponent will not die. Everyone has some hard core users. At the most, they have been shrinking for 35 years. So it is difficult to kill them by killing them. Not to mention a lot of opponents. In the past 35 years, money making has changed the competitive landscape. Today's best sellers may shrink themselves.



Unprofitable factories are often forced, and often have fuse. For example, workers cannot be recruited. Such a fixed cost is too high for every product, too much money is lost, and the money earned in the past few years is also spent. For example, suddenly big bad debts, the capital chain is broken. For example, the demolition of a factory building can not afford to rent a new plant. In a word, it is not the result of active choice. Although the factory, but there are always a lot of small factories, because not enough to eat, from the expense of dilution and not to expand the production point of view, from the point of view of the dying struggle, the price is more ruthless than you, only lower and no minimum. There are some minitype factories, the husband runs to sell delivery in the daytime, work overtime at night, the wife is dry in the day and night, a two small worker coax, the boss is sleeping in the factory at night, the factory opens in the house, the factory opens in the house, the cost is extremely low, how do you compare with him the lowest price? He gives his salary to his wife the profit, they only seek more than a part-time job, earn one hundred thousand very happy a year and make a year making one hundred thousand very happy. . Decent, dignity all do not, this quality of life you want? In a word, as long as you want to develop, killing the price in the end the way to die the same way, squeezing the local, logistics so developed. It costs so low, foreign prices will suppress your price possible. If you don't want to grow, you will become a slowly fading member. In conclusion, the wholesale price of general products will not work.


What should I do?


If you do not have the sales team, sales ability is insufficient, so don't kill what bargain. To improve the quality of the product, to make the product stable, so that the first earn the return point, second net profit 5%, so low profit this one of the general 8% can be done, and then develop a number of different things to wholesale another 5% profit, integrated down, 10% net profit. After a long time, we will accumulate some profitable old end customers, and we will fight for a total net profit of 13%. Do not do so, the customer will run away? No, so do, the use of the psychological stability of the people, only a low price of customers will run, but a stable meeting, will increase. Accumulation is not fast, but there is progress every year, at least not backwards. Responding to artificial rise can also be dealt with, and prices will slow down and go up. In this way, the factory is developing healthfully. If there are opportunities, it can go up faster. Many of our peers do this. There are a small proportion of competing products, not the lowest price, so as to enhance product quality and taste. Customers are chosen to do that, and customers must choose to abandon them at a low price. We should strive to develop varieties that have certain pricing power, pursue development with characteristics, and do something for nothing. This is a long-term way. More big, brand development. Over time, there are several more points of brand attachment. Over the past ten years, the price of the company behind, will not catch up.


If you have some larger terminals or a sales team to make terminals, you can remain invincible as long as you keep your financial stability.


We have a number of trade companies, open trading companies to terminal sales, only downstream customers this one takes up the capital, the upstream can provide 30 days of turnover, the actual customer accounts for only 42 days of funds, and the profit rate is relatively high, although not big customers may not do little, but has been very healthy, more decent than the price of the price. Once a good project is available, a good customer will be developed.


No one has me, he has me, I am good, I am cheap, I am cheap. This is a simple business experience of our forefathers. We hope our colleagues will have a good taste and encourage each other. (Wen / Shanghai five Zi Fang Abrasives Co., Ltd. executive director Gao Yuan).