Make inventory into chain business

In August of this year, Adidas officially opened its flagship store in Taobao. This is not a good thing for Shanghai Hyun Development Co., Ltd. (hereinafter referred to as "Hyun"), which has made Adidas inventory a new business.

The more inventory Adidas handles itself, the less inventory it can handle. But the head of the show, Bao Qinghua, doesn't seem to put all its eggs in one basket. He said that if the big sports player has inventory, it will show off. Can live.

Selling inventory to making money from selling new goods makes Hyun move inventory management into a business started in 2008.

This year, the inventory of sports brands including Adidas was not benign. Due to the high expectations of the sports goods market after the Olympics, companies such as Adidas had a large backlog of goods at various distributors and did not actually sell them to consumers.

Adidas annual report shows that in 2008 its global market inventory value of 1.995 billion euros, a substantial increase of 22.5% year-on-year; in the Chinese market, a widely circulated figure is Adidas inventory value of about 1 billion yuan***. As of June 30 this year, inventory still plagued Adidas. In the first half of the year, Adidas Greater China sales were 403 million euros, a decrease of 16% year-on-year. This is the only decline in Adidas's performance in the six global markets.

In 2009, the product value of a batch of adidas known as “garbage packs” that Hyun Tei handled reached 60 million yuan***. Bao Qinghua said, Adidas, Nike, such a strong sporting goods companies generally do not return, but due to too many inventory, dealers overwhelmed, in 2008 Nike and other for the first time to the dealer a certain amount of return.

The predecessor of Hyun is a company that manufactures shoes, hats, and clothing distribution management software. Nike's dealers, Anta, Xtep, and Seven Wolves are all customers of its software. Difficulty in shipments from distributors naturally does not show off.

In the second half of 2008, the company was established to specifically clear stocks of Nike, Adidas and other big sports companies. The “good fortune” is not worse than selling new goods.

Nike, Adidas these big-name inventories in the domestic three, four, five cities actually have a market. Nike, Adidas single product prices are generally more than 500 yuan, the average price of Hyun is between 3 to 7 fold, so Nike, Adidas after the sale of a pair of shoes as long as the average price of 300 yuan, now Li Ning product pricing The average price is 200 to 300 yuan. For those consumers in the third, fourth and fifth tier cities who are more concerned about brand names but have limited purchasing power, discounted Nike and Adidas products that have little difference from domestic sports brand prices are no longer expected. It cannot be said."

Selling inventory not only has a market but also has room for making money. Take Nike as an example, the price of dealers getting goods from Nike will be 6.1-6.4%. If they are sold at full price in Shanghai, the dealer's gross profit will be 30-40 percent, but these goods will enter the mall and the mall will Deduct points, enter the mall to charge 28 to 35 percent of the cost, a good mall to deduct 35 points, for Nike such a big brand may be deducted less, 28 percentage points, plus labor , utilities, capital costs, dealers to make money is not easy. In contrast, a large amount of inventory is on hand like an ant-like distributor on a hot pot, and the stock is sold at a surprisingly low price. The inventory of Adidas obtained from dealers can reach 3% or less. If done properly, selling inventory is not less profitable than selling new goods.

In Xuzhou, Jiangsu, the daily sales of a local store in the show ranged from RMB 5,000 to RMB 6,000. The monthly sales amounted to RMB 150,000, which was not inferior to the sales of new stores.

In 2009, Hyundai sold Adidas, Nike and other companies more than 100 million yuan in inventory, profit more than 10 million yuan, of which about 60% of the income from Nike and Adidas stock.

Made into the franchise chain model In the initial period of inventory business, because the trust with Nike, Adidas dealers is not yet strong, Hyun is a one-time buyout of a batch of stock from the dealer where goods, buyout occupied A lot of cash, the pressure on the capital to show off quickly converted to the development of franchise stores on this road.

The benefits of joining the model is obvious, to join the store to give goods to show off the cash, Hyun move to get the money to find Nike, Adidas dealer to goods, Hyun do not have to pay for themselves; the other hand, to become a Hyun-linked stores , but also need to pay to join the show fee, Hyun's affiliate system is divided into three levels, the provincial affiliate to pay Hyun moving 80,000 yuan, 50,000 yuan at the county level, 10,000 yuan at the county level. Bao Qinghua said that for a while, he found that provincial franchisees had strong strengths. After familiarizing with Hyun's business model, some of them became competitors of Hyun. Therefore, Hyun was canceled at the provincial level and only accepted single stores. Join us.

In 2009, there were more than 300 franchised stores signed with Hyundai, and more than 200 were actually opened. The sales area is 80 to 200 square meters.

Hyun's franchise stores are not the same as domestic and foreign sports brand stores. Domestic and foreign sports brand stores can only sell one company’s products. Hyun’s franchise stores include Nike and Adidas, as well as PUMA and New Balance (New Balance). ) And other brands, this model is quite attractive.

Bao Qinghua said that stores only make one brand, investment and risk are great, such as you do a Nike, Adidas a store, a shop needs 1 million yuan investment, but become a brand discount discount stores, as long as 300,000 ~ 400,000 yuan, can sell 6 to 7 brands of products, a brand of the product is not easy to sell, other brands of products sell well, still have money to make, so Hyun's franchise stores develop rapidly.

Is the big name still closed?

Adidas opened an official flagship store on Taobao, which has an impact on Hyun, but the most terrible is the view of Adidas and Nike executives on the Hyundai model.

On the surface, Hyun sells inventory, freeing distributors from the tight constraints of the capital chain, which is objectively beneficial to Nike and Adidas; and Hyundai discount chain stores are mainly distributed in the domestic three, four and five markets. , Nike and Adidas major markets in the domestic first and second-tier cities, to fill the gap between Nike and Adidas, Nike, Adidas's products into the domestic three, four, five-line market, Nike and Adidas are still trying to do things .

Bao Qinghua said: "Nike and Adidas can handle their own inventory, but from the perspective of price and cost, it is better to sell it directly to me. Now logistics has been outsourced, then why can not clear out of it? Nike, Adidas We have different voices, but PUMA and other brands recognize us, we enjoy the treatment of the first-tier dealers, and we hope that Nike and Adidas's senior leaders can also recognize us as such a model.”