Fashion Cracking: The Profit Code Of Clothing Agents

In 2009, the clothing retail market environment was affected by the global financial turmoil, and the profits of the intermediate links were repeatedly squeezed.

Build competitive advantage and earn continuous profits

Viewpoint 1: build competitive advantage and improve profitability

The profitability of agents through investment in retailing is the essence and demand of agents in their operations.

As the most close to consumers in the apparel industry chain, the agent should be the most profitable organization. However, due to the large number of intermediate links in China's retail industry and the high cost of channels, the cost and expense of agents in the process of operation are relatively high, thus greatly reducing the gross profit.

How to build a profit based core competitiveness when agents face external environment and internal factors?

The first is the choice and combination of brands.

Whether the brand positioning is in line with the needs of consumers is the fundamental factor affecting sales realization, creating profits and business development. Through brand combination, it can enrich the channel control power of agents in a certain field, increase bargaining power with channel manufacturers and brand dealers, thereby achieving greater benefits and promoting the development speed of the industry in the region.

The two is channel sales network resources.

Channel network is one of the important resources owned by agents themselves.

Brand does not belong to agents, then only channel network is the agent controllable virtue, and is the foundation of creating sales and performance.

This is the competition of brands. Only agents have a good sales channel network, so that agents can get more voice in front of the brand.

Three is the retail terminal management capability.

This is the essence of the operation of agents. Only with the growth of terminal sales, only a single store's performance will continue to grow. Only when the network expansion is full, can the performance be increased and the return on investment will be most effective.

Point 2: establish the necessary analysis mechanism and learn to conduct single store evaluation.

As an agent, are you facing too much inventory? Blind shops, opening and closing, closing and opening? Are there any shortfalls in the sales target? There is no plan for the cost of investment, the phenomenon of overspending is serious, and the turnover of goods can be repeated several times a year, which are caused by the mistakes in the operation of agents.

In operation, the ability to obtain cash as an agent is more important than the ability to acquire assets; turnover of investment returns is more important than the static profitability of agents; agents should make their subordinates pay more attention to net profit; the establishment of financial management and analysis mechanism can not be ignored.

From the two perspectives of sales volume and brand image contribution, there are excellent shops, namely image and sales, which are the best, but the resources of such shops are limited, and the quantity is bound to be limited.

What is really large is the kind of shop, that is, the image shop and the business shop. The image store has a good performance in the brand image, but the business volume is not high, and there is a certain loss.

The image is good, the location and the area are all good, such shops rent and expense are higher, the loss and the meager profit are inevitable, such shops have the existence necessary, but the quantity cannot be too many, moreover the loss amount is affordable and worth paying.

A business shop has a higher sales, but a lower image. Such a store is the main source of profit for agents.

Viewpoint 3: release capital and improve turnover efficiency

The reason for the pressure of funds is the loss of stores, slow sales revenue, stock pressure or others?

The practical suggestions for the current situation of common fund pressure and poor turnover are: if we close down a loss shop, we should speed up the withdrawal of accounts receivable and subordinate receivables from stores. In view of the stock pressure, we should open up sales channels as soon as possible or wholesale channels to clear goods quickly.

Of course, improving the accuracy and rationality of purchasing commodities from the source and improving terminal sales are fundamental ways to solve the problem of capital turnover.

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In the post crisis era, who has the power to channel marketing discourse?

View 1: market sales are weak and inevitable.

2009 is very different from the past years. The reason is that there was an economic crisis in the world in 2008.

From the CPI data released by the state at the beginning of this year, what is the signal for the whole retail market after 5 consecutive months of negative growth? That means that the sales price of our entire retail terminal is down, and the soft goods including clothing. The lowest discount in the first half is 90 percent off (and the lowest in 2008 is 75% off), that is, the selling price is 10% at the original price.

Secondly, department stores in 2009 were also the strongest promotions, and even appeared without sales.

The market in 2009 is weaker than before 2008, and the reduction of profits has become the main concern of all bosses.

Viewpoint 2: profit falls, mode meets challenges

Because of the drop in retail prices, the entire apparel channel directly leads to a sharp reduction in profits. Even if profits drop after the retail price falls, they can be compensated for by increasing sales volume. However, large and long-term price falls are hard to compensate for the damage to the brand and subsequent profits.

This will make the existing proxy mode of fashion channel challenged by earthquake.

Why is it a challenge of earthquake?

Because the current mode of agency, affiliation and distribution is basically a mechanism driven by interest segmentation.

The whole chain is a chain of interest segmentation. That is to say, there is not enough profit space to support such a long chain of channels.

And the drop of retail price will reduce the interest space of the whole channel, and the profits of the entire channel will be squeezed by the market quickly.

In this case, can the brand continue to drive down with this mode? Can agents, distributors and these intermediate channels continue to make money in this mode? It has become a problem worth pondering.

Viewpoint 3: channel retail is an inevitable trend.

How to build the profit space of the whole chain?

First, reduce the quality to maintain the high interest rate of the channel. The end result is "vanishing". In the past, the "high brand and low quality" strategy disappeared without any international brand.

Second, if the quality of the brand is maintained, the interests of the channel will be reduced, and the channel interests will be reduced to a certain extent. The profit margins of middlemen, agents and franchisees will be reduced.

The first is not desirable, and the second is to solve the focal point of contradiction.

Now that we need to solve the contradictions, we need to see how the profits of the whole chain are driven.

Branding is driven by 3 ways: first, design driven; the two is advertising endorsement driven; the three is manufacturing driven.

The channel business is driven by channels. If the profit is reduced and there is not much room for profit, the first possible strategy is to reduce the level of agents that cut down 3 or lower levels, which in turn leads to the retailing of the agents. That is to say, the total share of the direct business of the whole agent increases, such as having more direct outlets and more and more retail businesses. Secondly, with the retailing of the main bodies, the retail business activities are increasing, because the technology management content in the whole wholesale field is limited, and refinement is bound to be realized in the retail field.

Viewpoint 4: profit mechanism of channel = channel discourse power

Channel retailing inevitably leads to the retail of channel profit mechanism. What is the "channel profit mechanism"?

The apparel industry has changed from "brand to channel" to "channel to let the brand survive".

Excellent channel resources rely on their connections, funds and experience to compete for many brands. The competitive market of brands is quite obvious compared with the monopolistic resources of channel businesses.

In channel marketing, who has the right to speak in the channel, whose interests will be the biggest.

The right to speak is not only determined by the property right of the terminal, but also the management power of the channel chain.

In the future, whoever owns the brand name, the channel business, the agent, and who has the management power of the channel will have the right to speak.

What is the foundation of channel management right? Department stores and commercial streets are still a problem of image and threshold. In the clothing market, they have already passed the era of making money only by opening a special shop, as long as the shop opens. It is not only the problem of appearing in the market but also the share and profit problem.

Therefore, the focus and focal point of channel management is: whose means can solve the profit problem of the retail market thoroughly, and whose methods and tools are naturally chosen as the "channel survival and profit means", that is, the source of channel management rights.

Where is the means and source? The current focus of the channel is "retailing". The content and core of the evolution of the channel management right is retail chain retail - modern chain retail.

Viewpoint 5: profit mechanism of channel = modern chain retail management system

The so-called terminal wins, the winning of the terminal has never been short of concept and no gap.

The winning of the terminal is a set of effective systems, tools, methods, management and teams.

Over the years, both the industry's management consulting companies, entrepreneurs and channel managers have been trying to solve the terminal problem. The result is a repeated solution, repeated no effect, or "people are in effect, people walk invalid."

Why do so many years, so many ways, can not achieve the so-called "thousands of miles away, the law is everywhere," such a terminal standardization of the ideal state?

Because the tools, methods and routines to be solved are not the same, the solution that can not get close to the nature of chain is difficult to fundamentally work.

The so-called "Outline", good display, profitable or shop opening are all goals.

Therefore, to solve this problem, we must start from the perspective of outline.

For many years, the terminal experience of the apparel industry is quite different from the modern retail management system that reflects the nature of chain.

If the original scattered experience and practice, like farmers build a house, can cover 2 or 3 storeys, but if it continues to cover, it will collapse, and modern architecture science can let people build 100 layers on a foundation.

In other words, the successful experience of any store in the original fragmented mode can not launch the 1000 store mode.

The modern retail chain marketing management system is to build "thousands of stores" in theory, so that every store can make profit under standardized operation. There is no such thing as "making money without image, having image not making money".

The retail market and letting a hundred schools of thought contend make the consumer's clothing consumption concept more mature and rational. Building a customer centered modern retail chain system is the market basis for the fashion design. The brand should be not only a "fashion brand" but also a "standardized retail brand", so that the brand can reestablish the "profit channel chain" at the low retail price level, so that we can pass the weak period in the pformation and upgrading of the mode.

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Avoiding business risks from brand selection and inventory control

Viewpoint 1: clothing is always the sunrise industry.

No matter in any economic environment, the clothing industry is always a sunrise industry. Why do I say so? I've been doing women's wear for almost 15 years. A friend asked me, "when will this be unemployed?" I told him that when women did not love beauty, I would lose their jobs.

He is laughing, but it is true.

With the rapid development of the economy and the improvement of the living standard, the changing frequency of the consumers must be increased. Not only the female friends, but the male comrades now feel embarrassed to wear a style for several years.

The quicker consumption rate constitutes the multiplied growth of the market.

Therefore, although the discount is decreasing or the financial crisis is affecting, the frequency of buying clothes is increasing, and the rate of increase is very fast. The individuation of the terminal demand of the garment industry determines that it will not form a oligopoly situation like Telecom, automobile, real estate and so on. The clothing is a product of various levels and styles, each is the market, the first-class shopping mall is also good, the wholesaler is also good, the agent is good, even the low-end wholesale products, all have his market, all have his development space, can not replace each other.

Because clothing demand is very huge.

From this point of view, clothing is a sunrise industry, which is full of unlimited business opportunities at any time.

Point 2: the premise of making money is to choose a brand that can make profits.

How to choose a brand that can make profit? First, we must understand the local consumption demand, know ourselves and know it, and fight for it.

How to understand the consumption needs of the market? Climate differences in different places, lifestyle, cultural background, and economic development stages are different. If you live there for a long time, you should know something about them.

The two is to inspect the brand. We mainly understand the three points of the first point, that is, style positioning, age positioning and price positioning.

When inspecting the company, it depends on whether the company has a perfect product structure and coordinated cross matching capability. The strength of the company, including staff quality, dress taste, conversation and even office supplies, can reflect whether the company has strong R & D capability.

Because the driving force of fashion, from continuous creativity, accurate grasp of market demand and product realization of demand satisfaction are two very important aspects.

Viewpoint 3: Acting women's clothing, details decide success or failure.

Vision determines the world, ideas determine the way out, details determine success or failure. If you do not touch the details of the women's clothes, you will have difficulty in creating a position on the "rivers and lakes".

We should try to understand the designer's character and past qualifications and experience, and see whether the company is relying on clothing to eat. Clothing is not the main business of an enterprise.

Viewpoint 4: decentralized management can effectively control inventory.

If there are conditions, one or two outlets will be opened, so that inventory can be effectively digested.

Inventory is not to be noticed in operation, but to control inventory from the beginning of purchase, so as to ensure that the entire sales pattern will not be affected.

Best-selling funds should be "enough to eat", flat sales should be driven, and slow sales should be disposed of in time.

It is necessary to have a concept of "countdown" from listing, and find the trend of patterns as early as possible.

It is important to note that the best seller is not "stock".