How to jump out of the price war quagmire?–update 2024
How to jump out of the price war quagmire?
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Since 2020, the overall environment has not been good. Especially starting in 2023.
The overall market is worse.
The economic recession, rising prices, every ordinary family around the world are experiencing great pressure.
The purchasing power is down.
And for manufacturers, there is also a very serious vicious competition.
For example: the previous production cost of a product needs to be $1. In order to get the order, some factories began to cut prices,$0.9,$0.8,$0.6…….
In the end, it’s a whole lot of it. And the end customer experience becomes worse.
Because no matter which industry, there are certain basic operating costs.
If the price of a product is too low, or even beyond our expectations.
Then something is bound to go wrong with this product.
Manufacturers either reduce the cost of materials and replace them with lower-quality materials.
Or lower operating standards to reduce costs. I would like to ask you, are you assured of such cooperation?
Do you dare to sell such a product? Why do some customers have a poor experience in the procurement process?
Because you believe too much in bottomless low prices, these unrealistic low prices let everyone lose the way.
Everyone holds a lucky mentality, and the final result is often cruel.
There has been no profiteering industry since 10 years ago, and normal gross profit control of 20%-30% is already very good.
The traditional manufacturing gross profit is basically only 15%, excluding wages, expenses, etc., the net profit is only about 5%.
If the price of raw materials rises, it is basically nothing.
This isn’t business. This is exploitation.
Under the good market, we should strive to upgrade equipment, upgrade product quality, and constantly develop new products.
This is the only way out of the price war quagmire.
Now society is already the Internet world.
The Internet is basically developed all over the world.
So consumers have many kinds of shopping channels, but with the development of society.
Consumers are also spending more. The quality of the product is improving, but it will never be reduced.
I also hope that every manufacturer will maintain the most basic credit line.
Don’t make a discredited move just to get an order.
I also hope that each buyer will not put too much faith in the lower price than we know.
There must be a risk. For the traditional manufacturing industry has long been no profiteering.
And a healthy business is itself a win-win game, with customers and factories working together to complete a project.
The factory and the buyer must work closely together to grow together. This is not a one-sided game.
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