Question: Why not buy directly from the ancient town?
For the ancient town of lighting, lighting logistics is a major feature, not only can directly reach any part of the country, but also professional lighting transportation, not mixed with other goods, which to some extent to ensure the safety of the ancient town lighting logistics and convenient.
Everyone knows that it is definitely cheaper to purchase directly from the manufacturer than to buy from the transit wholesaler, because the part of the profit of the transit company is cut. And this part of the profit is still quite a lot, generally more than 10%.
Since logistics is so developed and the price difference is so much, why do most second- and third-level lighting retailer dealers choose not to get rid of wholesalers and directly purchase goods from ancient towns?
President Zhu has expressed his own opinions on this issue, and the reporter has compiled it for reference.
Analysis: direct purchase is just a fish
The advantage of going directly to the ancient town to purchase goods is that the price is lower. This seems to be obvious, because there is one intermediate link in the clear. But this idea is just taken for granted.
Aside from other problems, let's not say that, simply looking at the purchase price, the price of going to the ancient town is not necessarily cheaper than the wholesale market. Why do you say that? First of all, many lighting manufacturers have introduced Western business concepts. In order to regulate the market, they have adopted a price protection system. Wherever they are purchased, there is no difference in price. Secondly, compared with wholesalers and wholesalers, the purchase volume is undoubtedly much less, and manufacturers without price protection system often give discounts according to the customer's purchase amount when formulating the price policy, so even if the wholesale is cut off, The profit of the business, this part of the profit will not flow to the hands of the retailers, or was taken away by the manufacturers.
There are many shortcomings in purchasing goods directly from Guzhen. There are about five points in summary:
First, the arrival speed is slow. From the ancient town, it is not that you want the goods manufacturer to supply immediately. Most of the ancient towns do not make inventory, but produce according to customer orders. Due to the lack of control over the market, retailers generally have a small amount of purchases. In the case of small inventory, the time required for shipment is relatively urgent.
According to Zhu’s many years of industry experience, Changzhou and Guzhen are the two largest logistics distribution centers in the country, with the closest connections and the most developed lighting logistics. Even so, it takes at least a week from the time the order is placed to the arrival of the goods, and the arrival time in other places can be imagined. Such a speed of arrival, if the retailer receives the business of the engineering customer, the result of delaying the construction period can be described as a heavy loss. If you calculate this, even if you buy directly from the ancient town and get a lower purchase price, it will not be worth the candle.
Second, the replacement of accessories is difficult. The luminaire is a product that is extremely easy to break. The lack of a very small accessory will affect the sales of the whole lamp. The speed of the accessory is directly related to the generation of dealer profit.
From the ancient town to Changzhou, the fastest arrival is also six days, far less convenient than the accessories from the wholesalers. Take Zouqu as an example. In Shanghai, Zhejiang, Jiangsu, and even counties and townships in the radiation range, basically one day, even in areas where logistics such as Anhui is not very developed, it will take up to two days. Moreover, manufacturers rarely ship special items for a small accessory. Generally, they will wait until the next time you purchase the goods, so the time for the terminal retailer to make up the accessories is undoubtedly longer, which will greatly affect sales and service. The wholesaler is not the same, the requirements of the replacement parts can basically be provided as needed, and will strongly support the retailer's after-sales service.
Third, the travel expenses are large. The styles of lighting products change very fast. Changzhou wholesalers go to Guzhen to see the lights once a month, and often from two to three times. The cost of going once is as little as three or five thousand, and more than ten thousand. Moreover, for wholesalers, the purchase of goods in the ancient towns generally has manufacturers to arrange accommodation and other food, and retailers because it is difficult to have this treatment because of the small amount of goods.
The wholesaler has a large amount of one-time purchase, and the travel expenses are only negligible for a few points. But for retailers, it has been uneconomical to lose dozens of points of profits once.
Fourth, inventory pressure and risk exceeds the ability to withstand. If you choose to purchase directly from the ancient town, it is unthinkable that a type of product is not prepared for hundreds of thousands of stocks. Otherwise, if the business comes, you have to temporarily ship the goods from the ancient town, and finally you can only let your competitors profit. But the risks of stocking bulk goods are imaginable.
In contrast, retailers who have recently purchased goods from wholesalers are very easy to open, and the capital turnover is flexible. When you run into a big business, you only need to give the wholesaler a call, and you will be able to arrive on the same day, but it will be two days late. And as a retailer, a flexible business strategy is inherently the key to its profitability. It is short, flat, and fast, and it is not necessary to take up a lot of money to take risks.
5. It is difficult to find excellent cooperation in production enterprises. Excellent lighting manufacturers that can count on the industry, without exception, have their own perfect sales system. It is difficult for dealers outside the system to have the opportunity to participate, and for these manufacturers, it is a consistent policy to strictly protect the interests of logistics providers (ie wholesalers). Behaviors such as stockpiling are considered to be disruptive actions that disrupt normal operations and are targets of severe crackdowns and suppression. Not to mention that terminal retailers want to circumvent their logistics providers to go to the factory to purchase goods is impossible, even if it is entered, the price may not only have no advantage, but it is more expensive.
For retailers, good cooperation with the logistics companies of the brand companies can get better service and support, bypassing the logistics providers, but instead relying on the fish.
Conclusion: Lighting industry is not fashionable direct sales
Terminal retailers and wholesalers are an important part of the corporate sales network. There is no direct sales in the lighting industry. It is impossible to adopt the direct sales model for the foreseeable time. Retailers can make full use of the various support of wholesalers, grasp the advantages they have for the end customer service, do their own work, and progress together with the wholesalers to grow together.
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