Top of the Great Era

Chapter 1387 Inventory turnover is vitality

Chapter 1387 Inventory turnover is vitality
Shi Jinglin said softly: "A few years ago, PPG was very popular. It claimed to copy the Dell model to the clothing industry, and when it entered the market, it made men's clothing."

The Dell model is a legend in the business world.

It is said that Hewlett-Packard was the world's number one computer back then, and Mr. Dell also wanted to make computers, so he designed a lightweight business model starting from the inventory turnover rate.

That is, there is no research and development, no production, no factory buildings and assembly lines, and no stores. All businesses are outsourced.Then adopt the direct sales model, eliminate the middleman, and directly target consumers by placing orders by letter, telemarketing and TV shopping.

Dell is only responsible for advertising and order management, and the light company model greatly reduces the company's costs and inventory pressure.Through a series of business model explorations and innovations, Dell has finally made its way in the red sea of ​​the computer industry, and in less than ten years it has become a large company with the same reputation as Hewlett-Packard.

Today's lightweight direct selling companies are basically replicas of the Dell model.

"A few years ago?" Zhou Buqi was a little surprised, "B2C e-commerce? Why haven't I heard of it?"

Shi Jinglin said: "There is an e-commerce platform, but this is not the main channel. Their monthly advertising fees of several million are spent on TV stations, newspapers, magazines, and building advertisements. Their main sales method It's phone shopping."

"Pure nonsense."

Zhou Buqi shook his head.

Telephone shopping has appeared in the United States and Japan for decades. It is a very healthy and advanced direct sales model, and it can be called the pioneer of Internet e-commerce.

But it is different in China, telemarketing is equivalent to fraud.

Shi Jinglin nodded and said: "Well, it's not very good. Last year, it was reported that the advertising fee owed to the TV station could not be paid. It was also exposed by the media that they were clearly a local company, but they were labeled as an American company. , claiming to be a world-class fashion brand to deceive the common people. It also said that the inventory and unsalable goods purchased from abroad were sold in China as new models. Originally, the sales had reached 15 billion, and then it was over. Last month, I heard that the founder took the 2000 million US dollars in the account and went abroad with the money.”

Zhou Buqi nodded, "Well, the inventory stagnation in the apparel industry is so high, there can be great business opportunities from the perspective of inventory clearance."

"Huh?" Shi Jinglin raised her eyebrows, "What do you mean?"

Zhou Buqi said: "It's the PPG model you mentioned. It's definitely wrong to deceive people, but their model also has merits. The consumption level is directly linked to the income level. Products that cannot be sold in developed countries can be sold in China. Sales in second-tier cities. If the first- and second-tier cities cannot be sold, they will be sold to third-, fourth-, and fifth- and sixth-tier cities. If they cannot be sold in seventh- and eighth-tier towns, they will be packaged and sold to Africa.”

Shi Jinglin was very contemptuous, "What kind of business is this?"

Zhou Buqi raised Erlang's legs and did not shy away from her at all. He reached out and put his arms around Sun Wanran's shoulder next to him, "Didn't you say that more than 40% of the inventory is stranded, except for those luxury brands that are rich and powerful, and they will directly destroy the inventory. Most All brands have to find a way to clear the inventory and pay back and forth. Since the inventory is cleared, the price will inevitably be greatly reduced. If there is an e-commerce platform that can sell genuine big brand clothing around the world, the price is only 5% off, or 3% off, 1% discount, won’t this business start? It not only helps merchants to clear their inventory, but also meets the consumption upgrade needs of some low-income groups.”

The essence of transactions in a market economy is that each takes what he needs.

The stronger the demand, the better the business.

This is obviously a good idea.

Shi Jinglin's beautiful eyes widened, "Are you really going to be a clothing e-commerce business?"

Zhou Buqi laughed and said, "What are you doing? I'm very cautious about e-commerce. I didn't see how Penguin's e-commerce was suppressed by Ali after spending so much money."

"Then what's going on with you today?"

"Lei Jun invited me to invest in Fancl. He said that he would join hands to create a national trendy brand to fight against Uniqlo, ZARA and so on. I think this matter is very meaningful."

"Disaster!"

Shi Jinglin shook her head, her expression was not relaxed.

Zhou Buqi sighed, "Yeah, from what you said, it's not easy. Clothing is a fast-moving thing. To keep up with the trend, you need to have strong multi-level management capabilities."

Shi Jinglin said: "Yes, foreign clothing brands have been in business for decades, and they all have very mature international operation experience, and have a complete set of inventory clearance plans to provide to developed countries, developing countries, and the third world The country allocates inventory. People are sitting on the whole world, which is a global deployment. We only have the domestic market, and the scope of circulation is very limited. At most, we ship to Africa.”

"Yes, no matter how big the domestic market is, it cannot compare to the digestion capacity of the global market."

At this moment, Zhou Buqi understood why domestic fashion brands were losing ground under the impact of international giants.

Foreign brands can pursue lower gross profits, use better materials, fabrics, better designs, and lower prices.Domestic brands can't do it, and inventory turnover is a big obstacle.Overseas can easily clear the inventory and collect payment, but domestic inventory cannot be cleared. Once a large number of unsalable, the cash flow will collapse.

In the previous life, Vancl once had 200 billion unsalable goods in the warehouse. Most of these goods were "borrowed", borrowing materials from suppliers, and then let the manufacturers produce first and pay later.

After the product was made, it actually sold very well.

However, who can be sure that every product can be sold out?The accumulation of less becomes more, and the more and more the accumulation, the foreign debts cannot be paid, and the financing cannot keep up, so it will not be able to bear it.

Shi Jinglin pursed her lips and said, "Didn't you always say that the more you give up, the more you get. The more you pursue low profit margins, the more you can make big business. Just like the computer industry, the whole world used to There are thousands of computer brands, but now there are only a dozen or so left. Actively lowering the profit margin, it seems that the profit is less, but in fact the competitors are dead, and the own market share has increased, and the profit is actually more. "

"You still need to educate me?" Zhou Buqi snorted, "Lei Jun and Fanke are playing this routine. It must be ultra-low profit margins, using low-price and low-profit strategies to dominate the market."

In fact, when Lei Jun started Xiaomi later, the business thinking he used came from Chen Nian’s Fanke.

The main cost-effective, ultra-low price.

At that time, Vancl was in full swing, and was highly sought after by the post-80s generation. It could be called the number one trendy brand in China.After Lei Jun invested in Xiaomi Studio, he followed the business thinking of Vancl and started Xiaomi Technology.

Fortunately, the threshold for making mobile phones is much higher than making clothes.

To make clothing, basically do whatever you want, without any supply chain pressure.It is not enough to make mobile phones, the supply chain is in short supply, and the supply of Xiaomi mobile phones is in short supply.

The end result is that Vancl, which has never been out of stock, has run out because of too much stock.Because of poor supply chain management and no inventory, Xiaomi mobile phones avoided this minefield and became bigger and stronger little by little.

Therefore, the success of entrepreneurship must be inseparable from the luck of the right time and place. If Xiaomi's entrepreneurial stage goes as smoothly as Vancl, it is estimated that it will die.

Zhou Buqi gradually cleared his mind.

From this point of view, if you want to save Fancl in this life, you don't need to look at anything else, you must keep an eye on inventory turnover, which is the most critical.

Shi Jinglin said: "There are also BONO and Maiwang, which also make clothing in B2C."

"How about it?"

"BONO is for business wear, suits, etc., and the Yahoo China team started a project after leaving. But I always feel that it is too monotonous. This should not be an independent e-commerce company."

"Huh? What do you mean?"

"His family also has an e-commerce platform, but after logging in, there are only dozens of BONO clothes, which is too monotonous. There are too few options, how attractive is this?"

"Well, this is also a very important point." Zhou Buqi nodded, agreeing with her point of view, "Fancl is the same, clothing and e-commerce, this is a bit too mixed. I told Lei Jun last time However, whether Vancl is a clothing company or an e-commerce company is too unclear."

It is certainly possible for a company to do both clothing and e-commerce, but it must be a large group company.

Vancl is just a start-up company with insufficient strength.

Just like BONO, if you sell clothes on Amazon, Taobao, and JD.com, what is the point of your own e-commerce platform?

If you only sell it on your own platform, but there are only dozens of clothing on this platform, how many people are interested in buying it?
E-commerce shopping is just like shopping on the street.

Most of the time, I don't place an order with a purpose, but I look at it, and suddenly I see a good thing that interests me, and then I place an order to buy it.

This is not the same as the official website of Manchester United.

Fans go to Manchester United's official website to buy jerseys with a clear purpose.A real e-commerce platform, like Taobao, JD.com, Dangdang, and Amazon, has the attributes of shopping. After users log in, they can always see a lot of strange and interesting things.

Taobao has the most abundant brands and the most fun little things, so Taobao does the best.

"Where's Mai Wang?"

"Maiwang has been around for many years, and has undergone several transformations. At the beginning, it made its own clothing, but later found it was wrong, so it stopped. It has become a pure fashion clothing shopping platform, with hundreds of clothing brands on it. But e-commerce is not so easy to do, and it has not been done. Last year, Maiwang was controlled by the major shareholder Sequoia China, hoping to change things, but the actual effect is not good. Except for Taobao, nothing else will work. "

"Yeah, how can e-commerce be compared with Taobao."

After such communication, Zhou Buqi gradually got to know the industry.

For Vancl, they are really "forced" to do e-commerce.

Because the prices of Vancl's shirts and T-shirts are too low.

Others sell shirts worth 200 yuan, but they only sell them for 69 yuan. The main method is to eliminate the direct sales model of middlemen, sell them through Internet e-commerce, and return the profits of middlemen to consumers.

However, if you go to Taobao to sell... Taobao has also launched the Alimama advertising platform, and Ziweixing is the biggest Taobao customer.

If Fancl's clothes want to have more traffic and exposure on Taobao, they need to join the advertising platform of Alimama.

Ziweixing, as a Taobao customer, usually gets a commission of about 25% for each order of clothing business.

That is to say, for a shirt priced at 69 yuan, if the user places an order on Friends.com’s Taobao platform, 17 yuan of the shirt will belong to Friends.com.In addition, there are about 2-3 yuan belonging to Taobao.

Coupled with the higher shipping costs that may exist on third-party platforms, this additional expenditure will cause Vancl to suffer losses, and it can only do e-commerce by itself.

(End of this chapter)

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