In the early years, about 60% of exporting companies concentrated on foreign trade. However, when the financial crisis broke out and the foreign orders fell sharply, only a single export market was discovered. The risks of enterprises were too great, so they began to smash the domestic market.
However, the domestic market is not good, and rushing in is not the road to "survival", but it is dangerous. I witnessed the two companies (one in the Pearl River Delta, one in Shandong) in the process of being transferred from the outside, because the turning was too fast and the smoke was extinguished.
The clothing company in Shandong once had a small reputation, and it was 200 million yuan in a single year. Really can not resist the temptation of the domestic market, I am willing to do the domestic market, to do their own brand products. The brand is made up of real money and silver. In terms of clothing, you have to make a brand, you need to advertise, you need to open a series of specialty stores. Shandong’s boss is very big, and it has to open 100 stores and flagship stores across the country. As a result, the aspirations were unpaid, and the capital chain was broken first.
Due to the different cost structure of domestic sales and export sales, I would like to advise the companies that are preparing to go abroad: Please carefully evaluate your brand expenses and channel fees for large-scale entry into the domestic market. No matter which industry you are in, these two items will be your larger and less controllable expenses.
The transformation risk from the external transfer also comes from the talent structure of the export enterprise. For companies that simply export, the organizational structure can be very simple. The technical department + production department + finance department + customs brokers can operate efficiently. You don't need talents in market research, advertising, marketing, and public relations. Once you expand your domestic sales, you will find that the organizational structure of the enterprise has immediately changed from a simple structure to a complex structure.
If there is no talent reserve and a hasty turn, it is very easy to roll over.
In fact, the rules of the game in the domestic and foreign markets are different, which is the main risk of export to domestic sales.
Most of the export enterprises are OEM, OEM processing, and the processing fee is earned. R & D, design, brand, marketing, it does not have to worry about. And doing export business is more worry-free, do not worry about not receiving money. The classic OEM export is like this: I will give you a pair of model jeans, $5, 50,000, and delivery in a few months. When you take the order, I will issue you a letter of credit. If the letter of credit is for 3 months, after 3 months, the money will be credited to your account. For export companies, getting a letter of credit from a bank like HSBC or Citi is equal to getting cash. Why? You can use a letter of credit to mortgage.
However, doing domestic sales is different. If you want to enter the mall, you need the endorsement of industry and commerce, taxation, price, and technical supervision. If it is a large chain, it is mostly sold out. After the sale is completed, you have to pay the money. It is equivalent to saying that the manufacturer has unlimited liability for the goods sold.
Relatively speaking, for export products, the cost is controllable and the profit can be expected. For example, if the profit is 3 points or 5 points, there will not be much error in the checkout. The cost and profit of domestic sales are difficult to control. It is difficult to predict. For example, the gross profit is 30%. How many points does the net profit have? Will it lose money? Hard to assess.
In the process of being transferred from the outside, there will be no more than one-third of the successful transformation. Most of them will be unsuccessful, leaving a lot of debt and even overturning. To transform between these two distinct markets and achieve internal and external repairs is itself a major strategic transformation.
In general, an export-oriented company that wants to successfully transfer to domestic sales needs to do the following three things:
The top is the enterprise transformation. It is a transformation from a production-oriented enterprise to a business-oriented enterprise. Typical OEM manufacturers do not need to contact channels, do not need to contact consumers, and do domestic sales to market-oriented, to grasp the needs of consumers. Also remember that you sell not only products, but also your service commitment to consumers.
The second is to step by step and avoid sharp turns. Ningbo has an exporter to set such a goal, relying on the sales of 10% of total sales in the previous year is the result. Because the process of expanding domestic sales is also a process of forming new corporate organizations, it takes time.
The third is to use the external brain to make a diagnosis and open a prescription. The words of external experts are not necessarily golden rules, but at least they can broaden their horizons and play a role in brainstorming. At least an outside expert can tell you which road is out of reach, how many people have passed before you, and what is the result, which road is worth a trip.