Classification Of Garment Enterprises' Marketing Channel Risks

When the system is running, distribution costs often occupy a considerable proportion of the final price of the product, and the risk of continuous increase in distribution costs.

In fact, sometimes the distribution cost is higher than the manufacturing cost or the cost of raw materials and parts.

The rise of distribution costs will bring about financial and control problems, which will lead to risks.

Channel cost generally includes logistics cost, cost of sales organization, and time cost caused by inventory.

Channel risk arising from product life cycle.

Because the sales of clothing enterprises in the market are in the period of introduction, growth, maturity and recession, the emphasis of channel management should also be different with the different stages of the product.

However, it is difficult for us to see that garment enterprises will make corresponding adjustments with the different stages of the product life cycle, resulting in turbulence and loss of middlemen, resulting in channel risks.

For example, during the period of product introduction, garment enterprises should ensure that there are enough channel members to ensure adequate market coverage and ensure the supply of channel members. In the mature stage, the incentive mechanism for channel members should be enhanced in order to reduce the impact of competing products, and study the possibility of extending maturity and cultivating new growth periods by changing the channel structure.

Channel risk arising from product line expansion / reduction.

In the process of achieving marketing objectives, garment enterprises often adjust their strategies according to market changes.

This product line expansion and reduction strategy is often the unilateral decision making behavior of garment enterprises, seldom considering the channel members of garment enterprises, resulting in the contradiction between garment enterprises and channel members.

When the product line expands, some channel members may complain that their products are too complex to increase their warehousing and sales costs. When some products are eliminated, others will complain about losing products that still have quite a few customers.

Because price cuts may affect the quality and credibility of the products, the intermediaries will be hesitant about the products; middlemen may complain about the drop in interest rate brought about by the price reduction; the middleman may be worried about the reduction of the value of the products caused by the price reduction; the middleman may be threatened by the possible reduction of the price of the competitor.

Price cuts pose a direct risk to the channels of garment enterprises.

However, the price increase will also bring channel risk to clothing enterprises. If each channel distributor can pfer the price raised by the clothing enterprise to the next channel distributor, and ultimately pass to the end user, the price increase will not produce any risk.

But when the price increases cannot be fully passed, channel dealers will have to use their own spreads to digest part or all of the price increase.

At this point, raising prices will become a big problem.

As a matter of fact, it is difficult to raise prices by lowering prices. Once the price rises, the consumers will rarely agree with the behavior of clothing enterprises' rising prices. This reflects a direct drop in the sales volume of the products in the channel, thus causing the dissatisfaction among the middlemen and causing the channel crisis.

Channel risk arising from price control.

The sale price of clothing enterprises to terminals is generally in two forms: first, the unified pricing of the whole country; and the two is to float within a certain range according to local conditions.

Unified pricing, dealers do not have pricing power, then it is very important for garment enterprises to maintain a certain price difference at all levels of the channel.

Because of the particularity of our market, it is very difficult for clothing enterprises to maintain unified pricing.

When floating pricing is adopted, middlemen will ask to participate in the pricing of the market or to make their own price.

Whether participating in pricing or pricing by itself, the price of brokers' right to speak is increasing as the strength increases, and the possibility of causing channel risk is also increasing.