Five Modes Of Making Retail Profits

Widening the difference between sales and sales

Centralized procurement, plus a simple additional services such as warehousing and pportation, can get the difference between the purchase price and the selling price.

This is the most primitive profit model of circulation industry, and now it is still the circulation enterprise.

Collect

Because most manufacturers do not have strong brands and significant differentiated products, nor have a sound distribution system, and at the same time face fierce competition from similar commodities in the market, the distribution rate of shops has become the key to their success or even survival.

If we enter a chain store system, the rate of distribution will be greatly improved.

This leads to the ability of the circulation enterprises with strong distribution capabilities to control the upstream production enterprises to a certain extent, so they charge "channel fees" to the manufacturers who enter the stores.

There are many variations in the cost of such channels, such as new product entry fee, purchase discount, logistics fee, warehousing fee, festival sponsorship fee, new store sponsorship fee, promotion fee, site use fee and so on.

This way actually puts suppliers on the opposite side. Competition is greater than cooperation, and it is the effort to use "cake" instead of "big cake".

Excessive use of this model may lead to deterioration or worsening of industrial ecology.

Chain operation

The chain operation mode of retail industry is gradually popularized under the internal driving of the law of scale economy, and its forms are becoming more and more diverse. The main forms are direct chain, free chain and franchise chain.

Among them, direct chain and free chain profit mode is to reduce procurement costs and operating costs through large-scale procurement. The main difference is that the former is subordinate and the latter is cooperative.

These two ways mainly rely on self owned capital and financial capital to expand the scale.

In the era of "fast fish eating slow fish", this way of expansion is subject to certain restrictions.

Franchising expands its distribution channels by franchising, because it has special resources such as brands, trademarks, trade names, patented products, technology and business models. The head office can collect the franchisee's franchise fees and franchise fees of the franchisees as the main source of profits.

This way can expand profits in the early stage of expansion, but when the market tends to be saturated, the source of profits gradually becomes stable.

With the intensification of competition, competition is not the competition among enterprises, but the competition among business models and even the competition among industrial chains. Under such competition situation, the management of supply chain becomes the key to the industry to obtain profits.

At the same time, large retail enterprises in the lead of the industry assume this task logically.

At this stage, the profit of the retail industry is mainly derived from improving the efficiency of the supply chain. Under these influences, new theories such as process reengineering, order driven, organization reengineering are also emerging.

This mode is a win-win or even win win mode through timely feedback of customer information to create customer value, process reengineering of supply chain links, and reduce the cost of each link of the supply chain to increase profits.

At present, China's logistics and information technology is not yet mature and it is difficult to improve in the short term. Recently, WAL-MART has not been successful in Carrefour, but this is the trend of the long-term development of the retail industry.

increment

Due to the increasingly personalized and diversified needs of consumers in the affluent society, modern circulation enterprises have established extensive distribution systems and terminals closest to customers, which can make use of the value-added services provided by this convenience.

This way can be achieved by building brands, providing value-added services to suppliers, and providing value-added services to customers.

First, retailers can join in the business of designing and creating brands, and gain high added value profits by understanding the market and customizing goods to upstream manufacturers, occupying the profits of logistics, design, distribution and brand other than manufacturing links.

Secondly, retailers can gain value-added services by providing modern logistics services and distribution services, including services such as re processing products, to suppliers.

Finally, it can be achieved by providing consumers with good store experience, paction additional services (such as insurance) and corresponding after-sales services, such as equipment pportation, installation, maintenance and update services.