Rising international oil prices bring lubricant dealers an opportunity

Recently, the international oil price has been rising in the near future. The new round of lubricants has been subject to substantial price increases. Some agents always consult when stocking, whether the price increase of lubricants can bring them opportunities or risks. , I always give them an analysis of the situation, due to more questions, I now a unified analysis of the lube market conditions and price increases to dealers in the end where the opportunity?

The current oil price is related to the international situation. Globally, it faces severe inflation. The depreciation of the US dollar and the European debt crisis have spread everywhere, not only from small countries such as Greece and Portugal, but also to moderately developed countries such as Spain and Italy. Coupled with the continuous turmoil in the Middle East and North Africa, there are also speculations of hot money speculation, so that the current international oil prices have been strong, resulting in a new round of substantial increase in the price of lubricants.

The objective of increasing prices is not necessarily a bad thing for agents, especially for those agents who have more ideas and ideas, which are more market opportunities, because the lubricants have not found suitable substitutes, and their resource characteristics With non-renewability, which is the energy attribute of petroleum resources, the price starts from the birth of this industry. Regardless of the fact that there are several drops in the middle, the overall price trend of lubricants has been rising. With the continuous expansion of vehicle capacity, mechanical equipment continues to increase. The addition and renewal of this will not change the need to use lubricating oil, and the size of this market is still growing. Therefore, whether it is a dealer or a production company, the mentality of adapting to price increases should be the business quality that the industry must possess.

How to deal with price increases and rational use of price fluctuations is one of the necessary factors for dealers to be able to grow bigger and stronger. Now, dealers are no longer the role of a middleman in the traditional sense, and they simply jump out of the kind of simple delivery and collection of money. Simple trading methods and management methods, modern new dealers need to have a strategic vision, not only the product sales service, more importantly, a long-term channel development and business ideas way, there are always dealers complain about the current lubricant The market is not doing very well, the profit margin is relatively thin, and so on. I have not always thought that it is not because oil is harder to do than before. It is the market of lubricating oil that gradually moves towards a more benign market competition, and the industry is constantly shuffling. The market is constantly regulated, which means that those who rely on speculative behavior for short-term riches are no longer available. This requires everyone to have a good competitive attitude. The source company has always believed that the future of lubricants will also be competitive. The end of the concept of speculation, price wars, and gradually transformed into the product of the brand quality competition, enterprise scale competition, operating model competition. I can assert that in the next three to five years, the market will be more centralized and standardized, and it will be relatively concentrated in the game between several large-scale production enterprises, such as giants in the domestic Great Wall, Kunlun, Yuangen, Yuchai and other industries. And between foreign brands such as Mobil and Shell, the channels are concentrated in the middle of several large channel agencies. The later development will be similar to the home appliance industry. Manufacturers will focus on several companies such as Haier, Midea, and Hisense. In Suning, Gome, etc., people's shopping habits will go to lubricants supermarkets to choose independently, and such markets will return to a benign equilibrium.

In addition, there are many agents are very concerned about the gross profit of a single product above, we can imagine that if you have more money, you continue to purchase and ship, improve product turnover, it is estimated that you are the industry The biggest gainer, your profit is certainly much better than those earning every single day. I have worked in the domestic large chain industry for nearly six years, and I have been studying why a lot of times the chain channel knows the shipping The price is lower than the price of the product itself, the chain stores are still open, and the reason for the faster and faster the chain is: the chain giants continue to expand the scale of benefits, get the weight and advantages of continuous game with the manufacturers, on the one hand constantly Fees such as entrance fees, shelves fees, etc., which are used as a means of making profits, as well as the benefits of product sales itself, are actually not the main “watermelons”. I think that the model that really makes the chain giant profitable is such : The manufacturer's product enters the store for sale, and the chain store does not settle directly with the manufacturer, but proceeds to collect money after the product is sold. The chain merchants use: "small profits and quick turnover" and consumers for cash transactions. For example, a commodity can be sold for 12,000 yuan, after two months to sell and make payments, now businesses sell 11,000 yuan, sold in half a month, Earn 1000 fast but get one and a half months of cash free time. This time businesses use this money to invest and they will get a profit of more than 1,000 yuan. This is the “watermelon model” of business profits, and the rapid expansion of chain companies. main reason.

For dealers in the face of menacing lubricating oil price increases, will be divided into several, the first is to refuse to increase prices, which is completely contrary to the industry's development law, wishful thinking that the industry will not increase prices, hope that the manufacturers do not Price increases, but also blindly to the manufacturers to support, this approach is I do not agree, we often go to the supermarket, you will find a lot of products are always prices, this phenomenon illustrates the truth, the industry's development trend is Irreversible, everyone has been selling lubricants for many years, oil prices fell several times, the oil dropped several times? Few, so when the manufacturers adjust the price, can effectively adjust the price to the terminal is a wise choice.

The second approach: ignore the price increase, despite the manufacturers how to communicate or adopt a pessimistic attitude, you increase the price, anyway, I still have some inventory, slowly sales, and even some hold the fluke of the mentality that After a while manufacturers will cut prices, this is a typical passive rejection type, is also a typical retailer retailer mentality, plainly do not understand how to operate the product, if not properly adjusted into the sales, the loss will be huge , we all know why the price of lubricants does not fight, because the price of this industry is too transparent, the base oil, additives are all international uniform prices, we all know the cost price, we all know the company's production costs, so do not worry The difference in the price of the same quality product, unless the quality of the product itself is not the same will have different prices, with the integration of the industry over time, eventually all brands with a quality product price will establish a new balance, so As an agent, one must be clear about the situation and should have a reasonable adjustment of its product structure and price system in the market. Better foothold in the market.

The third agent approach is to see the development trend of the industry and face it together with the manufacturers. Through a large number of inventory stocks, the price increase is a good opportunity to adjust their inventory and sort out their own offline customers. Opportunity, through its own channel control, to retain its own high-quality customers, to sort out and replace some not-so-good secondary customers, and to look for quality customers within its own agency area to win over and will have an overall business great help. The second is to rationally arrange their own product structure, through this opportunity to increase prices, quickly get rid of some low-end products, try to maximize the high-end products, as long as the company understands well and enhance their sales capabilities, the main push With a high quality product line, you will find that you have entered another better development track. In addition, we must improve our capital turnover rate. Fast forward and fast out are some of the strong channel providers to do, just like the “Watermelon” model I just talked about: The profitability of smart dealers is mainly the turnover rate of products and funds. .

Therefore, if dealers want to easily raise the price of face-lift products, they must respond from the following aspects in order to ensure that dealers can optimize the price-raising effect of dealers and maximize their profits:

One: To make accurate judgments: Through the accurate grasp of the industry's information, to control the possibility of the price increase of the products they manage, it is necessary to establish their own good market feedback information feedback system, but also need strong support and cooperation from manufacturers. .

II: Agents grasp the quantity of stocks. Dealers must moderately stock the products before they implement product price increases. Too low stock quantities will affect the normal sales of products and the profitability of the response. They must be based on their actual conditions and manufacturers. According to the proposal, Yuangen Lubricating Oil Co., Ltd. will generally guide the stocking according to the actual situation of the market and combine with the dealers' situation. Through appropriate stocks, the purpose of “hype futures” can be reached. Earn profits and brand share in the market.

Three: How do dealers capture market opportunities in price increases? Must take full advantage of the overall price increase in the market, expand market share, and profit from operations; use a reasonable time to stock a product, and use its favorable product prices to rationalize products. Structure and customer quality.

Therefore, as a party to the channel, we must ensure that it is grasped from the information, and that overall decision-making and implementation from the details is a few aspects that dealers need to control the price of products on the market, as long as the information is accurate and decisions are made. Correct, effective implementation, and dealers can use the opportunity of product price increase to obtain sufficient profits and market share.

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