Cabinet hardware needs more channels to maintain profit

In recent years, the hot market of cabinets has brought a huge demand for hardware accessories. Although the proportion of hardware accessories in the entire cabinet is not large, they are an important part of the cabinet, which directly affects the overall quality, function and life of the cabinet, and also affects the aesthetics of the cabinet.

With the improvement of people's consumption level, China's consumers have higher and higher requirements for cabinets. This will undoubtedly drive the development of the cabinet hardware industry. The market capacity of cabinet hardware is also very large. According to industry analysts, cabinet hardware will soon become a new round of kitchen consumption hotspots. The cabinet hardware industry will be one of the most competitive industries in the future, and will also spawn a number of well-known hardware brands.

Production costs continue to climb At present, the relationship between domestic cabinet hardware companies and their upstream and downstream is more of a competitive relationship. The supplier mainly gains benefits by increasing the price of input factors and reducing the quality of unit value. For cabinet hardware manufacturers, raw material costs account for a high proportion of total costs, so the potential bargaining power of raw material companies is very strong. What is even more unfortunate is that due to the relationship of the national economic system, raw material companies are generally state-owned large-scale metallurgical groups. Their market position is stable and there are many buyers. Therefore, when the prices of raw materials such as aluminum and copper rose in recent years, most of the costs were passed on to Manufacturers.

How can the profit under the line be squeezed and the cost of cabinet hardware production enterprises delivered to consumers through channels? The answer is very difficult. Why? Because of fierce price competition. The process gap between the domestic mid-market brands and the low-end market manufacturers is narrowing, so many small and medium enterprises are struggling to enter the mid-range market, and price competition is their most direct way, although the domestic first-line cabinet hardware brands In the effort to move closer to the high-end market, but due to the low quality of design and research and development, and patent protection is not enough, competitors a lot of imitation and plagiarism, making the domestic first-line cabinet hardware brands also fell into the quagmire of price war. The price of the terminal could not be increased, and the price of raw materials rose again. The offline profits of cabinet manufacturers were reduced.

The terminal channel melee is not online, and the most common terminal form of cabinet hardware products is the building materials market, that is, retailers authorized by the brand dealers face consumers directly by entering the building materials market. As of December 2012, the number of the national building materials market has exceeded 10,000, not only the product display and sales methods are the same, and there are usually many shops selling the same brand of goods in one market. The degree of market competition and the level of confusion can be seen in the market. .

However, it is worth mentioning that the development of e-commerce channels is bringing changes to the supply chain of cabinet hardware companies. Due to the flatter channels, part of the channel cost saved benefits consumers, and the other part is backed by producers. Pressure eased. However, the proportion of online channels in sales of the entire industry is still relatively small, and the price competition on the line is also very fierce. Coupled with courier costs and promotion costs, the channel dividend is also difficult to sustain for too long.