The Leaders Of The Actual Combat Group Made A Cold Comment On The Electricity Supplier'S "Price War".

< p > low price comes from American WAL-MART every day.

Nowadays, many retailers in China are shouting low prices every day. They are saying that they will become WAL-MART in China. In fact, they are not necessarily clear about the core of "everyday low price".

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Less than P, whether it's traditional offline or electric business, everyone is committed to providing customers with inexpensive goods.

That is to say, we should use low price to attract retail users and win the competition by low price, so as to get better sales opportunities and market share.

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The customers of the world, no matter which country, nationality, age and income, can buy at a low price, or at a lower price, get what he wants to buy, which is an eternal pursuit of P customers.

No one wants to be a big head. It has nothing to do with the economic strength of consumers. It is a kind of self affirmation of consumers.

Therefore, almost all retailers, apart from the sale of high-end luxury goods, are holding high price flags. But there is a misunderstanding in this regard: what is low price? What is sustainable low price? Many enterprises like to use "everyday low price" as a slogan. This is the first concept of sales Every day low price (EDLP) introduced by the us a href= "http://www.91se91.com/pioneer/" > WAL-MART < /a.

In the middle of 90s, I participated in the establishment of lotus in Shanghai. At that time, lotus bought the whole process and system of WAL-MART, including WAL-MART's management and pricing strategy.

The company has made several arrangements for the Sinicization of EDLP in WAL-MART system, including daily low price, daily low price and so on. Low price everyday is the scheme I mentioned at that time, and was gradually used.

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< p > first we need to understand what EDLP is called "everyday low price" and what its source is.

Everyday low prices come from the belief that how to attract and compare consumers for a long time.

There are two ways to do retail business: one is called HIGH LOW, that is, high and low price strategy, and another is called EDLP.

In many places, such as department stores and many offline supermarkets and hypermarkets, we often adopt the price strategy of HIGH LOW.

Today's electricity providers almost all adopt HIGH LOW, that is to say, they often organize large sales promotions, hoping to attract customers by promoting the price of goods.

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< p > < a href= "http://zs.sjfzxm.com/ > > Taobao < /a > mall" double eleven ". The 6.18 anniversary of Jingdong mall in Daqing is a typical HIGH LOW.

If a picture is drawn, HIGH LOW shows a high and low price line.

This means that every day or every stage of the retailer has a special low price commodity, or even lower than the purchase price, in order to attract people through these special low price promotional activities.

In the process of customers' consumption, retailers want consumers to buy other things besides buying promotional products.

At this time, LOW is a tool to attract consumers. It attracts consumers like a magnet.

For example, the price of a beer is 2 yuan, and now it sells for 1.88 yuan.

At this point, as a businessman wants you to come, besides buying this beer, he also buys other things, but other things are not at the promotional period, they are still at the regular price, that is, the so-called HIGH.

When customers buy multiple products together, the combined gross profit contribution to retailers is usually not too low.

We can see that different businesses in offline stores have different promotional materials at different times, so as to stimulate the sales of the whole field.

When I was in charge of the hypermarket in 1990s, I often saw housewives carrying a bunch of different promotional advertisements on their hands. They took various free shuttle buses provided by different retail companies to fight various stores to buy their promotional products separately, which would save a little money but would be very time-consuming.

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< p > electricity supplier's pricing strategy basically extends from offline retail. Now we see that almost all domestic e-commerce enterprises adopt HIGH LOW's pricing strategy, using customers to click on home page and email messages to release information about low price merchandise during promotion period to attract users to buy.

One thing to note here is that compared with offline retailing, when consumers are buying online e-commerce companies, their purchase costs are much lower than those under offline retail.

The so-called purchase cost includes time cost, that is, the cost that the customer may generate during the shopping process.

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< p > > today, to a href= "http://www.91se91.com/pioneer/" > Carrefour < /a > see a beer price is 1.88 yuan, it is very cheap, you buy it, but after all, you have already gone there, it costs 3.76 yuan to buy two listening beer. It seems that it is not very cost-effective, so you may buy some other things such as rice, oil, shampoo and so on.

Those are actually in the HLGH stage of Carrefour commodity pricing, and have enough gross margins. Because you are attracted by low-priced promotional items and you buy a lot of other things, the overall gross margin that you buy to retailers can earn money for the retailer, and can also make up for the low gross profit of promotional products.

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< p > this is also a popular promotion method for offline Retailing: making price sensitive products to attract customers to visit, but at the same time, customers are expected to buy more normal price goods.

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< p > for electricity providers, such a practice is more difficult.

In the electricity supplier environment, users do not have the time cost.

You give me 50 percent off, I will buy 50 percent off off, you are not too easy to use only a few promotional items super low leverage as a lever to stimulate the overall sales.

Online, the housewives had to spend half a day on the buses to get the promotional materials of different companies, which took time and cost, and several clicks might be completed online.

In fact, many consumers do the same thing. Let's see what price of A commodity Taobao, what price of Jingdong, how much money B goods are worth, how much discount they should sell, choose cheaper ones, and most of them have free delivery terms.

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< p > is a price strategy, and what we often see now is that many electricity supplier companies do not really use the daily low price, but regard the low price as a marketing slogan, called price war, which is a very bad price strategy.

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< p > What do you think of low price? Is this low price a sustainable low price? The so-called sustainable low price means that from the perspective of company operation, this low price will continue to operate.

Behind the low price strategy is to optimize the supply chain management and locate the goods more accurately. Through your better source organization, your sales cost will be lower than your competitors through the improvement of your overall operational efficiency.

For example, I could sell 95 pieces of the original 100 yuan, because the cost of the sales link was optimized. This is a sustainable low price.

Conversely, price war is a predatory promotion method regardless of cost.

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< p > for example, we also analyze the above example.

Now the cost of commodity purchase is 80 yuan, which is the cost of goods.

In order to sell the product to the end user, there is a need for sale cost.

To make a simple arithmetic, assuming that the selling cost is 20 yuan, that is to say, the goods must be sold for 100 yuan to keep the money, that is, your lowest price for sustainable products is 100 yuan.

You may make a price of 101 yuan or 102 yuan, or even 109 yuan, that is your pricing strategy, but the basic price is 100 yuan.

You may think that 100 yuan is too expensive. Do you think it would be cheaper to sell 95 yuan now?

Under normal circumstances, it can be realized in two ways by selling an original 100 yuan to 95 yuan now.

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< p > the first way, through the optimization of operation and the improvement of management efficiency, compresses the cost of goods in the sales process, so that the cost is no longer 20 yuan, and becomes 15 yuan, that is, 95 yuan, which can improve a lot of space.

For example, improving the turnover rate of goods, reducing the stock cycle of goods, relying on the optimization of labor cost and so on, generally speaking, they all belong to the optimization of management. You have achieved a promotion from 20 yuan to 15 yuan. In this case, the overall cost of the product is 15 plus 80, or 95 yuan.

At this point, you can sell 95 yuan, so that you can be in the leading position of low price sales in the market competition.

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< p > second ways, you may not see much room for improvement in the short term, but you can further reduce the price of goods, that is, you can reduce the intermediate links of goods in the supply chain process, directly purchase from manufacturers, or increase the purchase scale of single products, so that the unit price of goods can be reduced. For example, the original price of 80 yuan is now 75 yuan, then 75 plus 20 is 95 yuan.

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< p > third ways is also the best way.

That is to say, the operational efficiency has also been improved, and the commodity purchase price has also been compressed down. The profit margin is even bigger, or the advantage of providing goods with low price sales is even more obvious.

In any case, the sale price of the commodity from 100 yuan to 95 yuan is based on the optimization of the purchase price and the circulation cost, which is the premise.

This basis and premise can provide users with a lower price, that is, under the same quality of goods, the same service standards under the premise of providing customers with a lower sales price.

This is the optimal value of retailing and the core of modern retail management.

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< p > but the electricity supplier situation we are seeing is not the case.

Now we see "a href=" http://pop.sjfzxm.com/popimg/xm/index.aspx "electricity supplier < /a > situation, the cost of goods is still 80 yuan, the operating cost is still 20 yuan, but it still needs to sell 95 yuan or even 90 yuan.

That is to say, every item sold may lose 5 yuan or 10 yuan, and it will lose all the way.

This is a common phenomenon in the industry.

How to do that? First, sales subsidies, that is, financing to boost the volume of pactions; or that is, there is no price, only a few cheap but very limited source of goods to attract users eye, do phishing promotion.

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< p > I have always been disapproved of the vicious business environment that the electricity supplier industry does not consider the profit situation and blindly pursue development.

Especially in many cases, many companies like to cite WAL-MART's EDLP as an example. In fact, EDLP is not only a pricing strategy, but also a retail business concept.

Every retailer preparing to use EDLP should first understand the logic behind everyday low prices.

To see whether they have the ability to qualify for EDLP, that is, the low price strategy everyday.

As a new sales channel, the electricity supplier should get market share from traditional retails, get more users, and provide users with a cheaper product. I think this is all right. The question is whether your own operation efficiency and the purchase price of its own goods can support this low price.

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Taking P as an example, Jingdong has made a lot of achievements. But now we can see that analysts have commented that the gross profit margin of Jingdong is still single digits, which has not been able to cover the cost of its operation, and such a loss has been going on for so many years.

If you look ahead, can you make a profit in a relatively short period of time from assessing your operation? If you can't turn a profit, then this loss is just like the example of a 10 year old child who still has nipples. You still have nipples, even if you have a big device late, and if you still have nipples at the age of 10, I'm afraid it's not convincing enough.

Take market scale off, but don't forget that companies must eventually produce profits.

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< p > I once said a very important saying: the management of enterprises with long term no profitability is immoral, because it throws employees, suppliers, investors, all interested parties into a courtyard, and looks up to the bright sky but can not jump out.

Standing at any time point, if you are an investor, you have to have a judgement on the industry; if you are the operator of the enterprise, you need to know where your way is and how far it is and how to achieve it.

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Amazon P has similar culture.

Amazon's headquarters in Seattle is located in a remote and broken building in the suburb of Seattle.

When I visited my headquarters, I felt like I was at the headquarters of the retail companies, not the office of Google, which was super luxurious (it was said to have five star restaurants).

Therefore, the more successful retail enterprises, online or offline, as long as EDLP, basically behind a low cost operation concept, and this concept in the electricity supplier industry is currently missing.

Use a very small example to illustrate this problem.

More than 20 years of retail experience made me develop a habit of turning off the lights without leaving my office or meeting with clients.

This is a habit that has been developed under the low cost operation environment for decades.

And I see in many of the electricity supplier companies, no matter who they are, no one is lit up, no one to go, they disdain, with their argument is: "what is there? What is that?" low cost operation is actually infiltrated in your blood.

If you do not have a low cost business culture and your company lacks the DNA, you will not be able to operate EDLP successfully.

It is very simple that the operation cost can not be reduced, but how can it be reduced? < /p >