Electricity supplier 3 major mistakes scale, traffic and price wars

 

this article extracts from the electronic industry publishing house new book "I see electricity supplier", the author is Tmall founding general manager Huang ruo. From Taobao to flow but rich A new force suddenly rises., don’t know business Tencent, Baidu missed the opportunity to purchase, the rise of mobile providers, group purchase, traditional enterprise counterattack, Jingdong domineering exposed, where Gaokaidizou, deep yellow Amazon force and so on, if they have made a profound interpretation.

Wen / Huang, if

Chinese electric probably gone through ten years of time, looking back ten years, electricity supplier has its own achievements: sales increased year after year, users continue to expand the scope of related facilities, gradually complete, the initial formation of the ecological environment of online shopping.

, but ten years down, the electricity supplier industry made three big mistakes, or three very serious mistakes: first, that scale is effectiveness, two is traffic is everything, and three is over reliance on price wars.

misunderstanding 1: scale

scale may bring the benefit of unit cost reduction, but there is no direct cause and effect relationship between scale and benefit, and there are enterprises with economies of scale and no benefit in this world.

from offline retail point of view, large scale enterprises so few, more retail companies itself may not have the scale, but its operating efficiency, customer loyalty has done quite well, such as Watsons, IKEA, H& M, there are many.

to say the least, the scale effect is meaningful only within the operational scope. A common example is an increase in sales at lower prices, thereby obtaining more favorable price terms by changing the price. That is, scale effects, such as:

A. the purchase amount of 100 units, each purchase price of 180 yuan, the price of 200 yuan, gross margin of 10% (the price – purchase price / price)

B. the purchase amount of 1000 units, each purchase price of 170 yuan, the price of 188 yuan, gross margin of 10% (the price – purchase price / price)

if the cost of the company’s sales is around 10%, it can make up for the loss of selling price by increasing the cost of reducing sales, which is a meaningful price strategy. Note that the price is not only reduced here, its operating costs, to each sales costs to do simple calculations, but also reduced from 20 yuan to 18 yuan. But if it is:

C. the purchase amount of 100 units, each purchase price of 180 yuan, the price of 200 yuan, gross margin of 10% (the price – purchase price / price)

D. the purchase amount of 1000 units, each purchase price of 178 yuan, the price of 188 yuan, gross margin of 5.3% (the price – purchase price / price)

each sale cost is 20 yuan, or slightly better, 10% or 18 yuan, in this case, the amount of change can not bring you out of the loss.

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