Friends, do you run agricultural stores that put sales in the first place? Or does profit come first? Looking at this problem, I guess you have to mutter: Aren't sales and profits all tied up? Sales have gone up and profits must be high. Don't worry. Do you have to work out your own accounts first. After all these years of farming, are your sales and profits really proportional? Calculate carefully, is it a little confused? In fact, sometimes when sales are large, profits are not necessarily high; when expenses are high, the final profits will increase. Today, I'll show you the three major misunderstandings in agricultural retailing. After reading, we should pay attention to avoiding them.
Myth 1: The bigger the sales volume, the higher the profit.
There are a small number of retailers, with very good business and strong popularity. They have a strong influence in the local market, but their funds have been tight, and they often default heavily on the upstream payment. Their opening time is not short, their total sales are not small, some annual sales are even more than a million pieces, the credit sales ratio is slightly controlled, and debt-default occurs less. It is said that every year should have good income and sufficient funds. What is the reason?
After a thorough understanding of the situation, it is found that the main reason is the low total profit. In fact, as a whole, the profit of agricultural retail stores is considerable, and the average profit margin is higher in the whole channel chain.
However, in order to attract farmers to buy and snatch business, these retailers mentioned above do not make money on conventional products, or even sell them at a loss. The most important thing is that the sales of conventional products are large, and upstream wholesalers often require cash operations, farmers also like to take advantage of this advantage, you sell at a loss, of course, people flock to. For example, one bag of ammonium bicarbonate loses one dollar. Ten bags and one hundred bags are nothing, but ten thousand bags and ten thousand bags? Imported products do not make money because of excessive price, we kill each other, blindly follow the trend, broken teeth can only be swallowed in the stomach. Homogeneity of products from large domestic manufacturers is serious, competition is fierce, and the proportion of price increase is not large. On the contrary, some small manufacturers have a larger proportion of price increase and a higher profit margin. However, the quantity of this part of products sold is limited after all.
There are also some retailers who are busy with their daily operations, do not set up accounts and neglect to make accounts by hand. Therefore, it is not clear what kind of products contributed to the main profits and what kind of products were sold at a loss. Such retailers seldom spend time accounting accounts, and they sell goods entirely in accordance with the buying habits of competitors and farmers. I push whatever you push. I also push what you push. The small abacus is very precise. It's precise to how much a barrel of medicine is. But it seldom calculates big bills and total profits. After a year of confusion, it sells a lot of goods, but it doesn't make much money.
Therefore, on the surface, sales are large, popularity is strong, turnover is high, business is good, but careful calculation, profits are not necessarily high, profitability and income are not necessarily considerable.
Myth 2: Increase in Sales and Market Share
Some retailers believe that the sales volume has not changed much or even increased slightly in recent years. The previous year's sales volume was 1 million pieces, but now it is still about 1 million pieces. They are more satisfied with the present situation. They believe that the competition is getting fiercer and fiercer. The number of newly opened agricultural stores has increased continuously in recent years, and they can keep their sales unchanged. This is progress, even sales. The volume has increased slightly, so it is obvious that their market share has also increased, of course, the market share has increased.
This is not the case. The survey found that in recent years, the level of drug use in China has increased dramatically. The cost of prevention and control has risen rapidly. Farmers are gradually willing to use medicines with high prices. The unit price of products has increased greatly. The cost of medicines per barrel has risen a lot. It used to be an average of 2-3 yuan/barrel, but now it has risen to an average of 6-8 yuan/barrel. Some of them are cheap and highly toxic. Organophosphorus compounds have been eliminated. At the same time, the price level has risen sharply. If the retailer keeps the sales unchanged, the number of farmers he radiates will certainly decrease and the market share will inevitably decrease. His market share will not increase, but decrease.
For example, a retailer used to sell 1 million units a year, with an average annual purchase of agricultural assets of 2,000 yuan per capita. It can radiate about 500 farmers. Now the annual sales are still 1 million units and the per capita planting area remains unchanged. However, the per capita annual purchase of agricultural assets is already 2,500 yuan, so only about 400 farmers can be radiated. As a result, the retailer's market share has declined and its business has a downward trend.
Myth 3: The bigger the cost, the less the profit.
Many retailers dare not spend money, which is reflected in the decoration of storefronts, shop recruits, promotional materials, promotion, and hiring personnel. They think that this is a waste of money. The less money they spend, the better, they can earn as soon as they save. Because the total profit is fixed, for every extra penny spent, there will be less profit. The larger the cost, the less profit will naturally be.
We often say that business should be "open source and reduce expenditure". That is to say, developing water sources and controlling water flow means increasing income and saving expenditure economically.
We should not oppose 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 devote more efforts to "open source", because "open source" is the real way to generate profits.
If we can "open source", we need to invest some money, just as we spend money to build a pipeline to divert water, to make the water flow smoother and faster, and to make the efficiency more efficient, then this investment is very necessary, and the pipeline must be built. With pipes, water can flow faster and more. It costs 1000 yuan to repair water pipes, but the imported water can earn 5000 yuan. We need to figure out this account.
Therefore, as long as the input-output ratio is reasonable, as long as it can bring sales and profits, the money saved must be saved, but the money spent should also be spent, and only when there is input can the return be generated. Of course, some returns are long-term and others are difficult to quantify. "The money spent" is not a cost, but should be regarded as an investment, which needs to be willing to invest. Only in this way can it be helpful for long-term operation.