Full category of self-electric dealers not to do vertical electric business development difficult

The continuing losses of independent electricity dealers have made the capital forces that once supported the power industry increasingly uneasy. Now not only a large number of well-known brands to rely on the cat, Beijing-east platform, such as the development of electric dealers, many of the independent electric business stars are also helpless choice to take refuge in the big electric platform, whether it is red children, Fank or when.

Now China's e-commerce sector has such a saying, make money for the platform, such as the cat, business also make money, the electric business Platform open shop sales of products sellers; to engage in an independent of the Electronic business platform is dying. This argument may be a bit extreme, but Taobao is a turnover of 1 trillion yuan in the background, this argument is still worth pondering.

As an example, rely on main books and other high margin category can achieve profitability, once the Department of general merchandise expansion, the basic and profit completely farewell.

Why?

There is a saying in China called "insiders", when selling books does not mean that it can sell furniture. The Internet is just a tool, today you learn to use the Internet to do business, but furniture dealers will also learn to use the Internet to do business-because the big electric platform so that they learn the cost of E-commerce is very low. On the other hand, there is no way to make when it is easy to master the secret of furniture business, after all, not every segment of the industry is to buy and sell so simple.

Moreover, the success of the domestic electric business model Amazon, it can be said to have taken up the climate, geographical location, people and:

Timing, the first round of the internet boom and the US government's long-standing tax exemption policy, has dramatically reduced Amazon's operating costs.

Geographical location, the U.S. developed Third-party logistics system, which makes the Amazon in the United States, the cost of distribution is very low.

People and, it is the American mature credit system and copyright awareness, which makes Amazon in the initial book sales to obtain high gross profit.

Yet even with the best of weather, geography, and people, the gross margin of the "business" business that accounts for Amazon's revenue is still half, and Amazon will have no advantage over traditional retailers once the US government cancels the tax exemption policy.

At the same time, Amazon's profits in recent years almost entirely rely on the "electronic" leg, on the one hand, Third-party sellers platform for the overall sales of the proportion continues to expand, will soon be more than half. On the other hand, AWS services such as cloud computing have become the most important factor in Amazon's improved gross margin.

Not only the whole category of the electric dealer is not good, the development of vertical electric business will also be difficult.

Although the vertical electric dealer has the advantage of the brand premium, but compared with the big platform, the technology research and development investment is very limited, no technical advantages lead to inefficient operation and cost is significantly higher than the platform, coupled with the higher cost of independent electrical operators to obtain more expensive factors, so that the vertical electric business platform in the market with the seller of the competition disadvantage obvious.

To do a not too appropriate analogy: relying on the platform to develop the electric dealer's brand is equivalent to renting a store in the mall, independent electric operators are equivalent in the wilderness to build a self-employed shop.

For example, if customers in order to improve the user experience and the huge investment from the construction of logistics can not be reduced, then in the technology research and development, purchase flow and other aspects of the huge costs could be taken refuge in the large platform and effectively reduce. Will all the guests and Han do a contrast, although both positioning low-cost apparel, but the independent of the gross margin of the customers but 30%, continued huge losses, and relying on Taobao's Korean clothing shed gross margin is as high as 60%, the profit has long been not a problem.

Perhaps it is through the independent electric business disadvantage, the cat does not do the self, always adhere to the "commercial real Estate" model, the continued huge losses of the Beijing East also like Amazon, began to increase the platform of construction, and even ready to rely on platform advertising to expand the profit channel.

(The author is an independent electrical business observer)