Behind The Phenomenon Of Franchising

In China's consumer goods sector, especially in the consumer goods sector, this phenomenon of "killing and killing" is common.

Many brands, such as those mentioned at the beginning of this article

In the initial stage of enterprise, in order to open the market quickly, we usually choose the way of channel cooperation, that is, choosing dealers at all levels to carry out the goods. The factory is responsible for managing the distributors. Some of them do well to provide "technical support" to the terminal stores such as display, promotion and management.

In the 20 years ago, in China, when all kinds of brands came into being, there is no doubt that this way of distribution has greatly benefited various brands, and dealers have also become the most important part of China's commodity circulation.

With the intensification of competition, especially in the field of consumer goods, with the increase of industry concentration and the diversification of consumption / purchase channels, this channel mode of price increases will be challenged.

As a result, various channels of pformation have been staged. Many dealers who have worked hard with manufacturers for many years have suddenly watched their sites "directly" and directly supplied by the manufacturers.

Some are resentful that factories are merciless and retaliate against each other; some have already accumulated some funds to switch to other industries; others have been slower than others, and their business has gone from bad to worse and finally closed down.

At this time, many dealer owners should not only ask: where should we go from here?

In order to better analyze this problem, we have a backward thinking: what is the status of the "channel operation" after the direct supply and direct operation of factories? In other words, why do manufacturers insist on self employment? Will self run enterprises increase profits for manufacturers?

We focus on the analysis of personnel, management and profit space.

Personnel aspect

Whether manufacturers open shop or supply directly to stores, they are manufacturers who accept the unified corporate culture of brand manufacturers, single faith, clear guidance, easy to go along with one another.

From the point of view of team management, manufacturers supply directly.

After that, unified recruitment criteria can be formulated, unified recruitment, unified training and unified assessment.

For some of the better employees, they can be promoted or rotated.

In this way, the enthusiasm of the staff will be greatly enhanced.

Enterprise operation management aspect

This is the most favorite way for many brand enterprises to sacrifice the "self revolution" banner. After the enterprise self operated channel, it can be unified management, reduce communication links and improve management efficiency.

There is actually a subtext:

Manufacturers generally believe that the management level of the vast number of distributors is far from the requirements of manufacturers.

Objectively speaking, there is good reason for manufacturers to question or even deny the management level of distributors.

In terms of staff training, most of the time, manufacturers are paying for it.

Just like many brand manufacturers begin to inviting business at the beginning, they will provide "various training" as one of the interests of attracting distributors.

Profit margins

For the change of flat channel, the dealers who cut off the intermediate links will help to improve the profit distribution of manufacturers.

But for Daphne like this article to join the pformation of the channel, how much profit can be added to the factory space, it is difficult to calculate and define.

Because for this kind of franchise operation mode, once the manufacturer opens its own store, the shop charges such as shop rents, water and electricity, sales promotion, personnel expenses and inventory occupancy will be borne by the manufacturer, which is also a great expense.

Further analysis, you will find that once the industry is intensifying competition and channel shuffling, brand manufacturers first develop flat channels, cut off intermediate links, and provide direct suppliers; when the industry competition is intensified, and channel shuffling is needed, manufacturers will begin to direct distributors and franchisees who have been directly supplied.

These channel changes have taken place in all walks of life, and have gradually become a trend of channel evolution. The reason is actually the result of higher competition, which requires higher level of operation ability of brand enterprises.

In the initial stage of enterprise, products are in short supply, so dealers can sell as long as they buy goods.

Just like two years ago in 2001, when domestic mobile phones started to rise, dealers' days were so good that many of them made a lot of money in those years.

At this time, no one will pay attention to price space, management, because as long as there is goods, they will sell, and sell very quickly.

With the development of enterprises, entrepreneurial enterprises experiencing savage growth began to enter a steady development period.

At this time, enterprises have to consider all kinds of costs.

The price space of products is greatly reduced. Enterprises can no longer do simple additions, learn to do subtraction, reduce all kinds of expenses and increase profits, but also learn to maintain the sustainable development of enterprises by improving the operational efficiency of enterprises.

For the vast number of distributors, the brutal facts have been very obvious in front of them: no matter how much moisture you live in now, it is an inevitable fate to be cut off by manufacturers, because most manufacturers always think that the management level of distributors can not meet their requirements.

Therefore, manufacturers should be self operated.