Independent brand Electric Dealer: Please do not "feed the pig"

Yinzidu：

I got a call from a friend last week and he told me he is supplying JM with a surrogate brand cosmetic bag, which he said had a better sale in JM (which should be the first sales), but last week he received a message from JM that he was going to stop purchasing his goods because JM would launch his own branded makeup kit.

The friend asked me: What should I do?

My answer is: the sky is going to rain, birds to get married, how to do?

The friend was confused and asked: What should I do?

I answer: JM own How to do the independent brand did not think clearly, you have been sacrificed.

Friends, no words ...

JM's case is typical. I always think that to do the independent brand is the opportunity of the electric business, this is only a trend problem, how to do the independent brand, this is a technical work ... In order to study the question of friends, I found a few friends to understand some JM situation, the feedback is as follows:

JM's own brand department in the whole site to fetch data, find which category of a brand is done, JM stop this supplier supply, and then start OEM, Production "JM" brand merchandise. Based on this, JM Group buying procurement Department, shopping mall procurement Department of this approach, the reason is very simple: the cultivation of a quality supplier is not easy, such a drastic approach, will allow other departments procurement without thinking.

As an industry observer, JM's approach has caused me to think differently:

1. Why can't you sell a good product directly to OEM?

First of all, in terms of profitability, this approach is understandable and is the most rapid and effective approach. Because he represents the consumer demand for this category of total, demand trend. JM's advantage is that there are a large number of users, online there will be sales, which is visible in the interest of high margin.

From my observation of the electrical business, the user's trust in the platform is based on the trust of the goods in the platform, for example: The user will say, I would like to come to Le Bee, because the silk Pagoda is authentic, XX goods are very good and cheap. In the Lok Bee net, static good is only the Lok bee net a common, the larger supplier just, and other brand business as normal settlement. From this perspective, JM's own brand is obviously "blind", the "blind" I would like to say: JM to do its own brand logic is "the consumer compared to a pig", as long as the feed on the line, no matter what is fed?

Second, each brand has its own unique competitiveness, with my friend agent of the Phantom card of this brand, according to his introduction, the brand is a British brand, all the goods are designed in the United Kingdom, in the domestic production, the production of the factory is to the European many big-name OEM20 years of factory. I woke up, friend Agent brand Cosmetic bag can sell reason is this. Unique design concept, high-quality production technology. These are the key to a brand's reputation for consumers. I was wondering if JM was looking for a supply chain when preparing for an OEM makeup bag? Is it possible to have 20 years of production experience? Can we achieve the design standards and capabilities of Europe?

Third, the root of any business is a financial problem, friend introduced, his cosmetic bag price than other suppliers 30% or so, the user's comprehensive evaluation of more than 8 points (it seems to be JM internal commodity evaluation system), to JM's margin of about 40%, and cosmetic bag industry's gross margin of about 50%, In other words: JM is due to more than 10% of the gross margin, and ready to be equipped with procurement personnel, developers, designers, in the design, process and no advantage, and sales prospects are not clear, in the case of preparation for OEM? The decision is clearly not brilliant.

The essence of the high margin of own brand is to cut the middleman. As far as I can see, for example: the results of the only products show that the internal management costs (cost, gross margin, inventory, turnover, loss, labor, logistics, management marginal cost, etc.) accounted for 7% of the sales volume is very good level. So does the decision mean "take for granted"?

2. What is the impact of JM Group purchase, shopping mall, own brand as the core "troika model"?

From the electric business model, JM's troika is very reasonable, the charge of the aircraft head is: Group purchase. Through group buying mode, to ascertain consumer trends, commodity trends, for the strength of the brand suppliers gradually into the mall system, long-term operations, which will allow JM has a steady stream of development momentum. This is macroscopic.

Through group purchase mode, to find out the specific trend of commodity SKU, JM will be able to choose the quality of the supplier to OEM, which will greatly reduce the JM own brand risk, reduce inventory. Through group buying mode, JM can stabilize low price, authentic image, communicate with consumers head-on, light car charge. This is the reason JM can break through 30,000 in a short span of two years.

The core of JM mode is group buying. So, what reference can the agent brand provide to JM's own brand? From my observation there are two points:

First: It is about the design concept, fashion trends reference. This represents the consumer's aesthetic demand trend. This is the core value of a brand, but also the core value of consumer recognition.

Second: is the share of OEM/ODM resources, in other words, if the agent brand found after the brand, the quality of the process is very good, as far as possible with this brand factory for you to work, or trial and error means risk.

A word summary: The quality of brand agents is the development of its own brand "gold", not you die my relationship.

JM directly cut the practice of quality agents, Zeize, at the same time this message once spread, will bring a chain of "domino effect", high-quality suppliers no one is willing to become JM supply, this will directly lead to: JM Group purchase supplier Resource Depletion, mall mode is not talk about , the JM self-owned brand which lacks the group purchase will become source, roots.

This was originally from a commercial point of view, is the obvious truth. Why is JM making such a mistake? From a manager's point of view, I see the JM internal management of "recklessness" and "restlessness":

1. Own brand, buy, shopping malls of their respective interests-led "blind": the private brand sector to consider the maximum sales, the best way is to clear all the same kind of merchandise sales, which reminds me of the foundation of the Law of economics: bad currency expelled good currency. If JM's own brand does not have competitors, short-term sales will increase, but in the long term, the private-branded goods to become "no learning benchmark Products", ignorantly, this will lead to the loss of consumer trust, because consumers always pursue high quality, price, and taste of goods. JM's approach is not the brand's way, it is the way of Machiavellian.

2. Management's "restlessness" in the pursuit of short-term profitability. JM Management allowed This behavior to occur, the reason is very simple, they see a supplier to give higher margin, and the product is simple, as if "Orange-born Huaibei", others do simple, is the brand of 20 years of skill, for the improvement of the process of consumer research, on the trend of research. Your OEM will be able to replace other brands, it can only explain JM's own brand decision-makers ignorance and fearless. This agitation has cast a shadow over JM's own brand.