How Can A Distributor Break Through In Price War?

With the arrival of the off-season, the market competition is mainly focused on the price war.

All manufacturers and wholesalers hope to stabilize and expand the market through price war and retain loyal customers, but the market environment is getting worse and worse.

The harm brought by price competition

The price war makes the gross margin of the products fall. In this case, the manufacturers demand large quantities of goods to go, and pass the pressure of sales to wholesalers.

But at this time, the market capacity increases little, and there will be a situation of oversupply.

The bigger the volume, the more serious the loss; and the stock will increase and liquidity will be tight.

Faced with huge business risks, the interests of wholesalers are directly impaired.

General new products will undergo four stages: market introduction, development, maturity and recession.

Due to the intensification of price competition, the time from new listing to maturity to recession has been calculated only in months.

Most of the time, wholesalers are in the low maintenance period.

Moreover, when many manufacturers launch new products, they do not adopt the strategy of differentiation, but adopt the way of direct price reduction. Wholesalers' inventory is difficult to digest, which makes the products devalue and the relationship between manufacturers is tight.

At the same time, it has led to wholesalers repeatedly looking for new products and repeatedly eliminating the vicious cycle of new products.

The decline in dealer profits will also lead to a decline in customer service quality and a decrease in business reputation. A vicious cycle of low price service between wholesalers and customers has been formed, which restricts the development of wholesalers.

Because of the price competition, the basic interests of the members of each channel are not guaranteed. The relationship between the end users and wholesalers of various factories has developed abnormally, and the balance between supply and demand has been broken.

Dealers feel unable to grasp the resources of manufacturers, and can not control the channel network.