How Does "Brand Benefit"?

With the price of raw materials rising, competition among peers is becoming more and more intense, more and more agents are returning, their profits are getting thinner day by day, and manufacturers are overburdened. Therefore, many garment manufacturers begin to abandon agents and go straight to camp.

The original accumulation of many brand businesses is basically closely related to "agents". Good agents have also made many brands. However, as the market continues to change, especially under the impact of the financial crisis, some garment manufacturers seem to realize that the "direct mode" that can maximize profits is the "king of development".

Industry authority 1~7 2009 industry data analysis report pointed out: strong brands want to improve channel self-control ability, through a smaller scale investment in the future marketing channel control and competitiveness, so they have to return existing channels, or by increasing self built stores and distribution centers to improve the proportion of their own channels.

First, multiple reasons prompt producers to "stay away from" agents.

Pressure on profit and cost

According to Mr. Hu, director of marketing of an enterprise, there are four modes of clothing sales: agency, agent, direct, pure and electronic commerce. "But now, some brands have" destroyed "the original dealers, and changed their way to pure direct and electronic business. The reasons are many, and the most important thing is the difference between factory price and terminal sale price.

The price of a brand garment is about 200-300 yuan, but the price of the garment may be more than 1000 yuan at the end of the consumer's hands. The thicker the interlayer between producers and consumers, the higher the terminal selling price. The middlemen as "interlayer" naturally earn more, and the producers still take the "dead money". "Many manufacturers are quite unfair about this, but if they do not give proper profits, dealers or agents may very well invest in the arms of competitors."

In addition to "unwilling heart", agents do not want to share the rising price of raw materials and the increasing cost of manpower, resulting in little profit margins for garment manufacturers. "In particular, some agents, in order to make money or even hurt the interests of manufacturers,"

Many businessmen have become famous brands as agents, but once they find that their profits are not abundant, they will immediately become another brand agent.

Maintain brand image

At present, the channel mechanism of garment industry has exposed huge defects, that is, brand operators have lost the management and supervision of the sales channel system.

Therefore, once the inventory pressure is slightly larger, dealers will disregard the brand demand and discount.

Or in order to save money, the requirements for brand names to match the brand and the market are totally incompatible.

In the majority of dealers' thinking, helping brands to promote and make brands is not their own job.

Some international top brands such as Armani, Zegna and so on, for the sake of brand maintenance, usually adopt direct battalion.

In addition, many manufacturers will consider the promotion of image and set up self flagship stores in some important market areas, so as to establish a brand image standard and provide a reference shop for dealers.

Two, the goal of "pure direct operation" is to lock in fame and gain.

"Channel is king and terminal is king" has become the mantra of many marketing experts. Production enterprises have also slowly remembered this classic dogma which implies the future development. A marketing expert said that direct operation is one of the most effective means of mastering channels. In the development process of garment enterprises, there is always a stage suitable for direct operation mode, and "pure direct mode has many advantages."

Mr Hu said.

Clothing manufacturers directly open direct stores can achieve higher profit returns by shortening the chain of agents, reducing agency level, enhancing the final control of sales terminals, and helping to respond quickly to consumers' feedback, and help enterprises control product quality.

For garment manufacturers, how to make profits more substantial and reduce intermediate links is the key.

The establishment of a direct store can shorten the agency links, reduce the agency level, enhance and enhance the control power of the enterprises to the sales terminals, so that they can get more profitable returns. "When there was an agent, a garment could earn only $80 yuan. Now, the profit may be 500-600 yuan, which is also a garment. The profit difference is so great!"

High profit is the most direct benefit of direct battalion.

In addition, it is not only beneficial for manufacturers to respond to consumers' feedbacks in a timely manner, but also to further improve all aspects of production, including the entire supply chain, and help enterprises to achieve precise control over product quality. "On this level, direct business is conducive to enhancing the brand image of enterprises."

According to Mr. Wu of the industry, production enterprises can form a virtuous circle between high profits and brands through direct operation.

After the direct operation, the profit will be N times higher than that of the "agent era" before. Brand clothing manufacturers also have capital to increase investment in image, promotion, talent and scientific research, and the brand influence will also be further improved. Dealers and agents have great deficiencies in maintaining the brand image experience and ability of manufacturers.

Three, is direct camp a panacea?

The compression of the channel must be accompanied by the widening of management span. As long as the headquarters manages dozens of agents, once the intermediate link is omitted, it becomes necessary to control hundreds of stores. This not only requires the enterprises to have considerable manpower, material and financial resources, but also requires enterprises to have a sound management information system and accurate data analysis and processing capabilities.

Direct investment in large shops, large structure, large number of personnel, organizational management is more difficult, investment risk and inventory risk is relatively large.

In terms of management, manufacturers usually use branch offices and offices to directly manage direct storefront, and in order to ensure smooth logistics and distribution, warehouses are usually set up in various branches and offices to supply goods directly.

In this way, manpower, material resources and financial resources are relatively large, so only the strength type enterprises usually dare to do so.

Four, where is the way out for garment manufacturers?

At present, most garment enterprises in China use the way of combining direct stores and franchisees to operate terminals. The main reasons are that the two ways have their own advantages and disadvantages and complement each other.

These two modes will also coexist in a certain range for a long time. How to strengthen management and coordinate their relationship among garment enterprises is the most important task in the market work.