Using Bloodstained Facts To Teach You How To Make Profits In Internet +

Nowadays

The concept of O2O and so on is flying all over the world. One piece of information has attracted quite a few people's attention. The fortune of ZARA founder is ranked second in the world, but it is the most traditional industry.

What makes this traditional

Can it continue to make profits?

The founder of Amancio Ortega, now more than 80 years old, has 70 billion dollars in assets and ranks second in the world's richest list in 2016, ranking only behind Bill Gates.

Throughout the rich list, most of them came from IT.

In emerging industries, Ortega is unique because it comes from the most traditional industry.

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In this traditional industry, Ortega did not follow the existing track to run the company, he is a veritable "anti traditionalist".

So where did he change the rules of the game?

The garment production process has been reduced from 9 months to 2 weeks.

First, in

From design, purchase to production, the whole process usually takes 6 to 9 months, and only the design link takes two or three months.

ZARA can shorten the process to 2 weeks.

Many people think this is impossible, but ZARA did it.

take

Let me give you an example.

Most of the market in Europe, it chose air pportation, rather than traditional shipping, so that products can quickly reach the store, greatly reducing the new time.

In addition, ZARA has established a mechanism for rapid reaction to the market.

It sends feedback information from customers in the store to headquarters through big data.

Designers respond quickly to market changes based on customer feedback.

ZARA mode

Centralized inventory, quick response and cooperation of local factories, two times weekly delivery of quick feedback from stores, non direct sale, direct stop production.

The rapid response mechanism also shows its advantages in finance.

Store expansion requires a lot of money, but ZARA doesn't have to worry about it.

The customers are the banks of ZARA, and their cash flows to the company headquarters.

Compared with the average of 4 times a year, the ZARA value of customers is 17 times.

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Not by low cost, but by flexibility.

Is ZARA's success dependent on low-cost strategy? Obviously not.

In logistics, it chooses air pportation instead of shipping, and the cost of air pportation is much higher than the cost of shipping.

In addition, ZARA 49%

All in Europe, unlike many garment companies, most factories are set up in Southeast Asian countries.

The cost of labor in Europe is obviously higher than that in Asia.

Why does ZARA not play cards regularly? How can we make money at such a high cost?

By greatly shortening the supply chain process and rapidly responding to the market,

The stock is very small.

Second, the cost of advertising is particularly low, with only 0.3% of sales, and the average figure in this industry is 3~4%.

Customer is its advertisement.

Small batch production allows customers to frequent patronage.

Let's look at another anti tradition.

stay

In the industry, the gross profit of general enterprises will be relatively high (the cost of production of a garment may be 3 dollars), but usually the net profit is very small.

Where did all the money go? Because, usually, when the enterprise is doing the market forecast, it usually has the error with the actual demand. When the forecast exceeds the demand, the product will be surplus, the final inventory will be dealt with by the discount method, and when the forecast is smaller than the demand, it will lose the sales volume.

Businesses need to strike a balance between the two.

Most enterprises will produce more products than market demand.

But ZARA is not.

Each product is produced in a small batch way, so its stock is very small.

It is constantly entering the new design cycle, allowing customers to frequent stores and reduce the gap between prediction and actual demand.

Weekly fashion updates now buy, or can not buy customer expectations - average annual visits of 17 times.

ZARA's inspiration to Chinese Enterprises: