Businesses involving sea cucumbers and abalones can easily give people the wrong impression of generating excessive profits. But what is the actual situation? If you are a catering supplier, the dual pressure from upstream breeders and downstream hotels will limit your gross profit margin to a maximum of 30%. After deducting the kickbacks to the head chefs of hotels and further subtracting personnel and transportation expenses, there's barely anything left for you.
Many people simply think that they can use sea cucumbers and abalones to initially attract restaurants and then later introduce some profitable products to make money. However, reality shows that this is merely wishful thinking. If it's already difficult to sell high-priced scarce goods like sea cucumbers and abalones, how could common seafood such as shrimp, crabs, and marine fish be sold at high prices?
Thus, in order to escape the deepening profit trap, agents continuously seek out products that can be sold at high prices. But no matter how much they search, these products eventually get slashed to cheap goods. This is a profit curse in the catering channel. Countless catering suppliers in China struggle in this quagmire, unable to break free.
The Right and Wrong of Business Models
Drucker said that managers must first confirm the direction of their business, and only then consider the methods of operation. In reality, most people always habitually focus on solving immediate problems without ever stepping back to look if they have unknowingly embarked on a path with no return. No matter how they optimize their product structure or business model, they are destined to be mere "laborers."
In recent years, both in the corporate world and academia, debates over various business models can often be seen in the media. For example, should businesses focus or diversify? Some advocate for specialization, while others support diversification. Regarding brands, some support single-brand strategies, while others favor multi-brand approaches. As for promotional tactics, some prefer aggressive marketing, while others advocate low-cost entry into the market. When it comes to channel expansion, some support exclusive agency agreements, while others prefer multiple agencies... Regardless of the chosen model, within companies or during exchanges with channel partners, diverse opinions never cease. No one can provide a universally applicable answer, and perhaps there isn't one.
Perhaps, the charm of the commercial world lies precisely in the diversity of business models. Regardless of how mature an industry may be, even in so-called sunset industries like laundry detergent, new brands like Pengjing have emerged and achieved remarkable results. Regardless of how powerful the giants in the industry may be, even the seemingly invincible Procter & Gamble, companies like Unilever, Colgate, Diao, Chaobai, Lafang, Shulei, etc., coexist harmoniously and maintain growth rates that are not inferior to Procter & Gamble.
Some say that heroes need not inquire about origins. However, by examining the background behind the success of each company and individual, the paths they chose are indeed related to their "origins." Different personalities of entrepreneurs, the competitive environment they face at the start of their ventures, and the funds, human resources, and customer resources they possess determine the business model each company selects.