Where are the "profit points" for small and medium-sized paint enterprises?
With the continuous development of the paint industry, market competition is also intensifying. Some brands are increasing their market share, but why are the sales of other brands not improving? Faced with rising raw material costs and increasingly picky consumers, what should small and medium-sized paint distributors do? What is the development path for small and medium-sized distributors? Currently, where are the profit points for small and medium-sized distributors?
Profit Point One: Retail Stores
Many small and medium-sized distributors operate one or two retail stores. Since they are stores, there will naturally be some unfamiliar customers who come in without any business relationship. However, the business from walk-in customers is limited and requires time to accumulate; stores that have been open longer tend to perform better than those that have just opened.
Retail business from stores only accounts for a small portion of total sales. To grow their business, small and medium-sized distributors must shift from being "sitting merchants" to "active merchants"; only by taking the initiative can they strengthen their channels.
Profit Point Two: Community Promotion
With the guidance of some well-known brands, distributors have begun to promote in newly opened properties and communities. The usual practice for distributors is to hire one or two salespeople to run around the community. However, this promotion is costly, with the salaries and commissions of salespeople accounting for about 15% of the total gross profit. After deducting costs for salespeople and advertising, the risks often outweigh the benefits. Even if they manage to hire one or two capable salespeople, retaining talent is a headache for small and medium-sized distributors.
Profit Point Three: Home Decoration Companies
Currently, many distributors are deliberately trying to develop channels with home decoration companies. In fact, the channel with home decoration companies can be described as a double-edged sword; it is tasteless to eat, but a pity to discard.
Home decoration companies require extremely low prices for paint products, which leads to a gross profit of only about 20% for this channel. Additionally, home decoration companies often require deposits or monthly settlements and rebates, and some small home decoration companies frequently change locations, making defaults a major issue.
Therefore, most small and medium-sized distributors treat this channel like a hot potato.
Profit Point Four: Distribution Channels
Many brands are strengthening the construction of distribution channels. For small and medium-sized distributors with limited financial strength, this is indeed a development path with low investment and quick returns.
However, the downside is that due to the rapid development of a large number of distribution customers in a short period, there are no good methods to help these county-level distribution customers retail products, leading to a gradual decrease in customer loyalty.
For small and medium-sized distributors, following the same path may help sales, but this assistance is only temporary.
Profit Point Five: Project Channels
Almost all small and medium-sized distributors look at project channels with envy but are also fearful. Projects can indeed create a group of overnight wealthy bosses, but they can also drag down a company.
Due to the lack of financial strength, good social connections, and, more importantly, project experience, small and medium-sized distributors find themselves daunted by projects, which involve accounts receivable, bidding, corporate qualifications, and on-site supervision, making many distributors hesitant.
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