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Price Competition, Starved Counterparts, Kill Yourself


In recent years, the leather industry enterprises, "fail", "shutting down", "bankruptcy", "wage arrears", "decline in performance", "loss" messages shaken people. As the domestic severe overcapacity, many companies either no business or on low take the amount of profit to survive.

Over time the "sub-healthy" business model become fatal to some SMEs are dragged out to be the inevitable result. However, apart from the external environment, internal cut-throat competition also engulfed better things carton industry. In order to maintain customer to ensure that they can do business, some companies hesitate to "preservation" attitude sellers, more small and medium sized companies increased risk of bankruptcy.

"How low price business there are people who do!"

It now appears that more terrible than the "closures" of the "low-price competition."

In the trading market, to buy things Well, of course you want to pick the cheapest to buy, the key question is, if the customer can not be identified on product quality, the seller no bottom line of the business, and ultimately disrupt the market, there have been starved to death peers, exhausted themselves, pit dead wrong business phenomenon.

boot leather

1, starved counterparts

For example, in the same area, there are 50 different types of tanneries, and the same region, there are 50 dealers need leather, tanneries use if there is a low price to get 10 home building materials dealers, and that the rest 49 tanneries only 40 chance, not receive orders directly starvation. Over time, the market is disturbed.

2, exhausted themselves

Tanneries margin control in about 10% within the normal range, but in fact there are some manufacturers in order to do business, gross profit margin of 5% also received some 2%, or even lower. Received a single, of course happy, bustling around the clock to catch the duration, the marketing department is busy every day, billing, arrangements for delivery.

In this seemingly thriving behind, tanneries days really better than you? By the end of one afterwards to remove wages, rent, utilities, marketing expenses, logistics costs, health costs, network fees, telephone charges, all kinds of fines, alas, hard dry year, in the end leaving three melon two dates, might as well work for someone else earn more, why?

There jargon is called "never buy sell fine", not insiders never know how deep the water leather industry. Recent times, more and more leather business executives complain that price competition has disrupted the normal trade order. "No matter what kind of product, there is always a lower priced products appeared. Price regardless of downstream users given how low some people will always orders from the production point of view, this price can not guarantee profitability, If they do, it certainly is cutting corners on materials and workmanship of. "Over time, the healthy development of the leather industry is bound to be a threat, influence Chinese manufacturing will decline.