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Why is the clothing price in department stores in China so high?
Clothing company's "pain"
There is a clothing company said: The high price of clothing in the shopping mall is not their original intention, is the various types of fees charged by shopping malls, forcing companies to increase sales of clothing.
The person in charge of a brand introduced that after the product was made, the garment company priced it on its own. For companies like them, pricing is generally 3-4 times the cost, and big brands are 4-5 times more expensive.
Why is it so high? He said that each season's style has both best-selling and unsalable money, and the pricing strategy must be able to cope with the "earning loss." In the late period, the slow-moving goods can only be sold 1-3 fold, which needs to be filled by high prices in the previous period.
Since the pricing is 3-4 times the cost, then clothing companies should be able to earn a lot of profits?
The responsible person counted a small sum: First, shopping malls should deduct 25 percentage points from the apparel category, that is, if a supplier sells 100 yuan in the mall, the mall will receive a 25 yuan rental fee. Second, shopping malls will deduct 2% of advertising costs. In addition, shopping malls and suppliers must sign a guaranteed bottom sales contract. The uncompleted parts will be paid by the suppliers themselves and delivered at 25 percent. In addition, during major festivals, malls will launch more aggressive promotional activities that will eventually be passed on to suppliers. He also said that after deducting field rents, assessment fees, taxes, etc., every mall sold for 100 yuan, the supplier can get 65 yuan is also good. â€œAnd now, the cost of raw materials and the salaries of shop staff are increasing year by year. We can only increase the price of clothing.â€
In short, usually a brand needs to enter a shopping mall. Clothing suppliers first pay the entry fee, which mainly includes dozens of titles such as poster fees, promotional fees, default fees, storage fees, and advertising fees. Many clothing counters are required to participate in various types of discount activities held in malls throughout the year, and accept preferential discounts for mall members. This means that garment companies must set aside corresponding price space when pricing.
Money has been made by the mall?
Is the mall charged as much as some apparel companies say? Xi Houming, general manager of Beijing Xidan Shopping Center Co., Ltd. Xi Yu, said: â€œI am only responsible for the down jacket. For the down apparel brand in Xidan, we are still using a few years ago, in addition to a fixed fee. In addition, no additional fees have been charged in disguised terms. The cost has not risen, but has shown a downward trend in the recent period."
But now the operating costs of shopping malls are really improving. The first is the increase in energy costs. Second, in the past two years, the competition in the retail industry has become fierce. In Beijing and Shanghai, new shopping malls have opened every quarter. They are digging talents each other, and labor costs are increasing. In order to maintain a good shopping environment, In order to attract passengers, shopping malls should be frequently renovated and maintained. This part of the cost is also rising. For this, Zuo Houming said: "The cost of renovation, renovation, etc., needs to be delivered by the company or brand agent stationed there, but it will not be particularly large."
For promotional activities or discount seasons, Zuo Houming said: â€œWe do not require all brands to be discounted during the promotion period, as long as they handle it on their own terms, and during the promotion period, we will give profits to companies, such as us. We will charge 20 deduction points (ie, the shopping mall's business commissioning). By the time of the promotion, we will let the company with 5 deduction points."
Apparel companies and department stores have held their own words... Can high clothing prices really exist, and why?
The high price of a long chain revealed that the current department stores have a high deduction rate, a long billing period, the transfer of promotional costs, and various unclear unclear hidden rules. Therefore, clothing prices are also high. Higher, and clothing from the manufacturer to enter the mall in the process, also experienced a number of layers of agents (common process: clothing manufacturers - distributors - regional agents - dealers - shopping malls), a series of issues The direct result is that the final retail price of the goods faced by consumers is extremely high.
Sun Ruizhe, vice president of China Textile Industry Association, said that many commodities in China's department stores far exceed the prices of similar products in European, American and Japanese department stores. The high commodity prices have largely suppressed the consumer demand of the residents. It is difficult to benefit domestic consumers.
The western retail industry adopts its own brand strategy - the combination of retail and manufacturing, the superposition of commercial brands and commodity brands, and the vertical integrated management from design, manufacturing, and sales, minimizing costs, optimizing channels, and thus consumers. You can buy inexpensive goods. The retail industry in China adopts a business model of pooling, bringing in factories, collecting various â€œentry feesâ€, relying on sales rebates, extending the account period, and collecting â€œentrance feesâ€ as the main source of profits, resulting in high prices.
Zheng Siming, a senior consultant of the apparel industry who has done extensive research on the Chinese department store industry, told this reporter that there is a certain gap between the domestic and foreign department store clothing prices. It is quite normal that clothing materials and labor costs in different regions may have certain differences. . However, he said: "Department stores must build suppliers and retailers' cooperative production and sales value chain system." At present, China's suppliers have multi-level distribution and multi-level agency, and their product distribution costs are as high as 25%. Foreign advanced department stores reduce distribution costs by integrating supply chains. For example, GAP, a clothing retailer, has improved its collaboration with factories in the Pacific and has installed more than 40% of its products into stores before reaching the distribution center. Kohl's department store has achieved cooperation with national brands and private label suppliers. More than 40% of direct operations reduce the cost of distribution centers.
Many department stores in foreign countries have their own brand names, and 70% of the products in the US Sears department store are owned brands. This has become the core of its success. Having own brand not only can maintain the consistency of the brand in each place, but also can reduce the purchase cost, and at the same time it also solves the problem that the choice of the product brand is subject to the supplier channel. Zheng Siming said: "These are worthy of reference to domestic department stores." In addition, he also said: "The department store must change the existing "industry into the store," and "the second landlord" business ideas, in addition to organize the 'buyers' team, vigorously In addition to the introduction of well-known domestic and foreign brands, it is also necessary to build its own brand supplier alliance and product licensing system.â€ With the rising cost of clothing, the department store industry has reached an urgent need to change, vigorously develop its own brand is the future trend. At the same time, channel costs should be reduced as much as possible, and profits should be given to consumers. The new business model with this direction will have greater development prospects.
Different circulation channels at home and abroad caused different prices, which also caused domestic consumers to assume the role of â€œfinding the final buyerâ€. The fact that the overpaid costs of consumers does not mean that the clothing industry is a profit-making industry, but there are particularly many stakeholders in the existing department store model, and consumers have to pay for the tedious distribution channels. Consumers pay more for that part is to support a chain that may not have existed. Now that the prices of raw materials and workers' wages are rising, "hard costs" have been raised again and again, are they being pushed to consumers? The transformation and innovation of commercial channels are imperative. China's department store industry may be able to use this "material wars" to carry out a channel change, so that the consumer's burden can be reduced.
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