In addition to saving money and creating greater returns, the merger of Tianxia Technology and Tianxia home appliance channels is another important reason to avoid being strangled by dealers.

In my previous life, home appliance manufacturers in China did not make much money. Even big brands like Hailing, Midea and Gree had a profit margin of only about 5% (one-year data).

The reason for this is that a large part of the profits of home appliance manufacturers were taken away by channel merchants. Large channel merchants such as Gome and Suzhou control sales channels, so they are qualified to compete with home appliance manufacturers for profits.

They buy goods from home appliance manufacturers at low prices and then sell them to consumers at high prices, making the difference and making high profits.

They even delay the repayment period, and the account settlement usually lasts for half a year. In this way, they have hundreds of billions of payments in their hands.

So much money, whether it is to invest, profit, make money, or use it to open new stores and continue to expand, it is all profitable for them.

On the contrary, home appliance manufacturers are in business difficulties because they are owed a large amount of payment for goods.

However, because these channel dealers control sales channels, such as Suzhou accounts for 20% of the national electricity sales. If they cut off cooperation with it, the product sales will drop sharply by 20%, which is unbearable for many companies, so they usually dare not speak out.

As a result, many large home appliance manufacturers have established their own sales channels, such as Haier Store, Gree also has its own specialty stores. In addition, they also have their own brand stores, their own online malls, etc. The purpose is to get rid of the restraint of channel vendors and take profits into their own hands.

Therefore, the profit margins of several major e-commerce companies have more than doubled, such as Gree's net profit margins have reached 15%, more than doubled compared to before.

...

Tianxia home appliances are still relying on dealers.

Although its brand is very popular and its products are also popular, dealers are not very brave enough to stroke their whiskers, and they take too much advantage of home appliances in the world.

But it has to be said that they are indeed a little ready to move.

After all, the meat of the home appliances in the world is too fat. Just one year, the sales volume is tens of millions of units, worth nearly 10 billion yuan. They only earn one more percentage point from it, that is, the profit of hundreds of millions of yuan.

The so-called wealth is moving! No one will be unmoved when facing such a large profit. Under the temptation of profits, dealers may join forces to suppress the world's home appliances, force them to lower prices and even extend the payment period. In this way, they will earn more than hundreds of millions of yuan and billions of yuan.

This kind of thing is very likely to happen.

Nowadays, channel dealers such as Gome, Suzhou, and China Resources are gradually growing. For example, Gome was established in 1987, Suzhou was established in 1990, and China Resources Supermarket entered the mainland in 1991...

In addition to these large channel dealers covering the country, there are also regional dealers such as China Merchants Department Store, Yihaojia, and Jinyang. Their market share has gradually increased and they have gradually gained the right to speak in the market.

And when they really grow, it is time for them to sharpen their knives and swine toward the pigs and sheep. The Tianxia Home Appliances is undoubtedly the pig. Even if they have the power in summer and are in business, they cannot stop these channel merchants from cutting off Tianxia Home Appliances.

The so-called only solution is to establish your own sales channel. In this way, you can control your own destiny. With the brand popularity of Tianxia Home Appliances and the blessing of Tianxia Technology, opening your own store is absolutely no problem.

Moreover, Tianxia Group also has its own logistics and warehousing channels, which can also ensure smooth transportation of products. Therefore, merging channels is definitely a good thing for Tianxia Home Appliances.

...

"A Tian, ​​since you said the channel dealer is so important, do you think, should we try to acquire a channel dealer?" Wang Xianzong asked Xia Tian.

Although some of the mainland channel dealers have expanded greatly, compared to Tianxia Group, they still belong to Xiaoxiaobi. For example, Gome has a valuation of only a few billion yuan, which is not even a fraction of Tianxia Technology. Acquisition of channel dealers can solve the sales channel problems of Tianxia home appliances, which is very cost-effective no matter how you look at it.

"There's no need." Xia Tian waved his hand when he heard this, "Our specialty store is more precise, just a brand experience store, and does not need to store too much goods. It is just for customer experience and purchase. Then we transfer goods from the warehousing center, express delivery to customers through logistics channels, and deliver goods to the door.

In this way, our store actually doesn’t need too much storefront, as long as there is enough space to display our products.

Most of the channel merchants nowadays are retailing in the form of ‘hypermarkets’. They cover a wide area, have many brands, have many warehouses, and have large investments. Their ‘hypermarkets’ are not in line with our needs, so it is not suitable for us to acquire them.”

To be honest, physical home appliance retailers like Suzhou, Gome, etc. will be a little sad in the future. Because with the rise of Internet shopping, many consumers usually choose to shop online when buying home appliances.

The prices of home appliances online are more transparent and more attractive to consumers. In comparison, physical stores are more expensive than online due to cost-effectiveness such as store rental.

Therefore, in the future, online home appliance retail will gradually dominate, such as JD.com, Tmall, Suzhou Yigou, etc., which are all well-known online merchants.

However, this does not mean that offline physical stores will definitely die. In fact, offline physical stores will still occupy a huge market because they have their own advantages.

First, in offline physical stores, consumers can actually try out those home appliances and get a more intuitive shopping experience. This is something that cannot be enjoyed by browsing pictures online and viewing comments.

Second, the education level in mainland China is not average. Many people do not know how to surf the Internet or how to shop online, so offline physical stores are more attractive to them.

Third, offline physical stores can provide consumers with better after-sales service, and consumers are more confident in physical stores. This is also something that online stores cannot give.

Therefore, although online shopping was very developed in the past life, physical stores did not disappear, but instead ushered in new vitality.

High-tech companies such as Xiaomi, Huawei, Apple, Alibaba, and Tengxun have gradually entered offline physical stores, hoping to open up the boundaries between online and offline.
Chapter completed!