When the reporter visited retailers, by observing their business methods and face-to-face communication, I found some seemingly correct and classic views, but after careful thinking, I found that this was not the case. In fact, these views are also the misunderstanding of some retailers in their daily business, which is worthy of our attention and thinking.

Myth 1: the larger the sales volume, the higher the profit

If the sales volume is large, the profit will naturally be high. The relationship between sales volume and profit is directly proportional. Usually, it is true, but in reality, it is not necessarily true.

I found that a small number of retailers have very good business and strong popularity. They are very influential in the local market, but they are always very short of funds. They often owe a lot of money to upstream wholesalers. The time of opening the store is not short, and the total sales volume is also a lot. Some annual sales are even more than one million, the proportion of credit sales is slightly controlled, and there are few defaults, Normally, it should have a good income and sufficient funds every year. What is the reason?

After in-depth understanding of the situation, it is found that the main reason is the low total profit. In fact, on the whole, the profits of agricultural materials retail stores are considerable, and the average profit margin is the highest in the whole channel chain. But what about the retailers mentioned above? In order to attract farmers to buy and grab students, conventional products do not make money or even sell at a loss. The most important thing is that the sales of conventional products are large, and the upstream wholesalers often require cash operation. Farmers also love to take advantage of this. You sell at a loss. Of course, everyone flocks to you. For example, ammonium bicarbonate loses one dollar a package, ten packages and one hundred packages are nothing, but one thousand packages and ten thousand packages? Imported products do not make money because of fleeing goods and excessive prices. Everyone kills each other and blindly follows the trend. They break their teeth and can only swallow them in their stomach. Large domestic manufacturers have serious product homogenization, fierce competition and small price increase proportion. On the contrary, some small manufacturers have larger price increase proportion and high profit margin, but the sales volume of these products is limited after all.

When selling goods to grab business, where did the retail store owner consider and calculate these? In my heart, I still think that my business is big anyway. If I can make money, I can make money. The total sales volume is large and the profit must be high. There are also some retailers who are busy with daily business operations, do not establish accounts, and neglect to make accounts manually. Therefore, they simply do not know what kind of products they are, which main manufacturers contribute the main profits, which kinds of products and which main manufacturers are loss sales. They rarely calm down to calculate their business, and rarely spend time sitting down to calculate their accounts, It's completely following the buying habits of competitors and farmers. I push what you push, and I also bargain when you bargain. The small abacus is very accurate, accurate to how much gross money a bucket of water, and how many bottles of glyphosate have been sold more than the next store, but it rarely calculates the big account and the total profit. In a confused year, the goods have been sold a lot, but the money has not been made.

Therefore, on the surface, the sales volume is large, the popularity is prosperous, the turnover is high, and the business is done well, but careful investigation shows that the profit is not necessarily high, and the profit and income are not necessarily considerable.

Myth 2: increased sales and increased market share

Some retailers think that the sales volume has changed little or even increased slightly in recent years. The annual sales volume was 1 million before, but it is still about 1 million now. They are satisfied with the current situation. They think that the competition is becoming more and more fierce. The number of new agricultural materials stores has been increasing in recent years. If they can keep the sales volume unchanged, they are already making progress, and even the sales volume has increased slightly. So it is obvious, Their market share has also increased, and their market share has certainly increased.

The actual situation is not like this. After investigation, it is found that the level of drug use in China has increased significantly in recent years, and the prevention and control cost of farmers has increased rapidly. They are gradually willing to use good drugs and drugs with high prices. The unit price of products has greatly increased, and the cost per barrel of water has increased a lot. In the past, it may have been an average of 2-3 yuan / barrel of water, but now it has risen to an average of 6-8 yuan / barrel of water, Some highly toxic organophosphorus compounds have been eliminated, and the prices of these compounds are relatively cheaper. At the same time, the price level has risen sharply and the RMB has depreciated. Generally speaking, it means that "money is worthless". If the retailer still maintains the same sales volume, the number of farmers he radiates must be reduced and the market share will be reduced. Instead of increasing, his market share will be reduced.

For example, in the past, a retailer sold 1 million agricultural products in the whole year and purchased 2000 yuan of agricultural products per capita, which can radiate about 500 farmers. Now, the annual sales volume is still 1 million and the per capita planting area remains unchanged, but the per capita annual purchase of agricultural products is 2500 yuan, so it can only radiate about 400 farmers, Another 100 farmers have purchased agricultural materials from other channels. Therefore, the number of farmers radiated by the retailer decreased by 100, and the number of fields radiated per mu also decreased accordingly. Although the annual sales volume remained unchanged, the market share decreased, and the business tended to decline. Even if the retailer's annual sales volume has increased by 100000 to 1.1 million, the per capita planting area remains unchanged, and the per capita purchase of agricultural products is 2500 yuan, there are only 440 farmers he can radiate, or about 60 farmers are lost.

Myth 3: the greater the cost, the less the profit

Many retailers dare not spend money, which is reflected in store decoration, store recruitment, publicity materials, promotion, employment and other aspects. They think that these are expenses and expenses. The less money they spend, the better. They can earn it when they save, because the total profit is fixed. For every extra penny spent, there will be less profit. The greater the cost, the less profit.

We often say that in doing business, we should "increase revenue and reduce expenditure", that is, develop water sources and control water flow, which is compared with increasing income and saving expenses economically.

I do not object to retailers' awareness and behavior of "throttling". Cost control of retail business is very important, which is a way to increase profits. However, we should pay more attention to "open source", and make more efforts and willing investment in "open source", because "open source" is the way to really generate profits.

If we can "open source", we need to invest some expenses, just like spending money on building pipelines to introduce water, so as to make the water flow smoother and faster and make the efficiency higher. Then this investment is very necessary. The pipeline must be built. With pipelines, the water can flow faster and more. It takes 1000 yuan to repair the pipes, but the introduced water can earn 5000 yuan, After calculating this account, are you still reluctant to spend money on building pipelines? Do you still think that the construction of pipelines is only a cost increase? Are you sure that the greater the cost, the less the profit?

Therefore, the money to be saved must be saved, but the money to be spent must also be spent, and the investment can produce returns. As long as the input-output ratio is reasonable and can bring sales and profits, of course, some returns are long-term and others are difficult to quantify“ The "money to spend" is not an expense, but should be regarded as an investment. It needs to be willing to invest, can produce returns, and is helpful to the long-term operation of the business.