Four major risks of terminal sales channels for auto parts companies need to be vigilant

Many auto parts companies are paying more and more attention to first-line terminal sales. Manufacturers have come to realize that too many sales shares are concentrated in the single channel of large distributors, which has many risks and structural hidden dangers.

Profit risk: Whether it is a factory direct sale or a dealer sale, there are very few people who can generate huge profits. Most of them are only for one purpose—“doing an image”. Distributors use the advantages of low cost, customer sentiment, and rich product lines to expand the market. The situation seems to be better, but it is also bitter.

Competition risk: The sales force pK of each competitive brand of big distributors is very serious. Your sales share is concentrated in the channel. A special activity of competitors beats. Do you follow? If you don't follow, you will be squeezed out; then, your profits will be completely destroyed.

Professional risk: Each city in China has a dealer who specializes in the big market. On the one hand, they have a hard time. On the other hand, these big distributors are involved in logistics distribution, financial ability, financial management, reconciliation, and business negotiation. , contract negotiations, customer relations in the store, and the product lines they operate in have the advantage that ordinary dealers can't go beyond the short-term, so he can make this money. Others can't learn for some time.

Structural risks: The longer the cooperation between big manufacturers, large distributors and hypermarkets, the larger the sales share occupied by hypermarkets (for example, some small household appliances enterprises are in the United States and Suning systems are hundreds of millions or even billions of sales). . The deduction points for supermarket store contracts have been rising year after year. Single store sales have been diluted year by year. Competitors have been increasing year by year. The pK of sales promotion has become more and more serious. Sometimes the annual contract is signed and it is known that this year's retail system will lose money again, but it will have to lose money. Do, why - this guy is too big for me and I dare not get rid of it!

Competitive cruelty is easy to Eclipse, high cost and low profitability, easy to make losses, high professional requirements make it easy to make mistakes, and structural risks are too big to endure. This is the truth that auto parts companies rely entirely on big distributors for sales.

Therefore, auto parts companies should consider channel diversification. The richer the channels, the more sales opportunities, the more stable the profit structure, and the smaller the structural risks. Even if the cost of a channel is too high or the competition is cruel and the enemy is fighting, there are other channels to make blood.

In the small- and medium-sized terminal market, especially in the 3rd and 4th markets, although the number of single stores is small, the number of shops is large, and the depth of the residential areas is deepened. In-depth interception of the 3rd and 4th markets where large distributors have failed to achieve success is very effective. considerable. Basically, small and medium-sized terminals do not have any expenses, and the proportion of cash checkout is high. There is no need to worry about annual contract deduction points increasing year by year, the number of in-store competition products is relatively smaller than that of supermarkets, and the pK of in-store promotion efforts is less. Therefore, the parts and components companies can be in three or four cities. Small and medium terminal coverage needs to establish a business team to open up new markets.