Causes Of Channel Risk In Garment Enterprises

Channel risk arising from improper promotion.

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Clothing companies, middlemen and consumers have different reactions.

Promotions that seem attractive to consumers may not seem to matter to middlemen. They are simply not worth investing in extra energy and risk. Clothing companies do large-scale promotions in order to gain market share or attack competitors, but middlemen do not get their due benefits or even lose money. Clothing companies require middlemen to increase additional exhibition space or to purchase significant display locations, resulting in increased dealer costs.

These promotional activities will directly or indirectly affect the interests of middlemen, resulting in contradictions between middlemen and garment enterprises, and thus bring channel risks.

Channel risk arising from cargo loading.

Products are really consumed by consumers, and the products of clothing enterprises are truly sold out.

However, many garment enterprises are pressing their products in the middle of the channel.

From the book side, the sales of clothing enterprises have gone out, but in fact, the products are still in the middlemen's warehouse.

Once the product is not sold, the middleman will certainly let the garment company return or replace it.

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As a result, the cost of return and replacement is high, and because of the ambiguity in the identification of returns and replacement, the contradiction between garment enterprises and middlemen is increasing. In contrast, dealers only bear the marketing cost, the capital preservation point is low, and the choice of supply sources is large, so they tend to pursue immediate short-term interests. Of course, dealers' pursuit of short-term interests does not mean rejecting long-term interests, but the short-term interest oriented behavior is the basic factor leading to horizontal competition and vertical conflict.

This brings many uncertain factors to the channel.

Salesperson risk.

Sales personnel are the maintainers and managers of marketing channels for garment enterprises. They are people who directly communicate with middlemen and have direct influence on the sales of clothing enterprises.

So there are two aspects of salesman's risk to the channel: first, the quality of salesperson's own causes the ineffective communication with the middlemen, or the lack of market channel maintenance, or the lack of market development, which affects the sales volume of products.

All of these will bring risks to the channel.

Two, because of the professional ethics of salesmen, it brings channel risks to garment enterprises.

For example, collusion between middlemen and fleeing goods.

Channel adjustment risks.

The establishment of a garment enterprise channel is from the initial to adapt to the market, gradually adapt to the market, and then slowly mature, and establish a standardized marketing channel.

Many garment enterprises think that my channel has been built up at this time.

But in fact, if we do not optimize and adjust the channel continuously after the channel mode is mature, then the garment enterprises will be able to make continuous improvements.

It will face the danger of becoming increasingly rigid.

At this time, we have to adjust the channel.

For example, flat optimization of channels.

In the process of optimization, there will be many conflicts within the channel, and the optimization of the intermediary business will also cause the opposition or even confrontation among the middlemen.

No matter whether the adjustment is active or passive, every adjustment of the channel is a risk.