Hardware market profit declines into a foregone conclusion

Because of the increase in prices of raw materials and other factors, the bathroom hardware industry not only failed to usher in his "spring" but it was challenged by consumers. Is the “profiteering era” of profits truly a thing of the past? Indeed, with the rising prices of raw materials and the continuous expansion of the consumer market, the hardware industry's market competition is also increasing, the era of profit violence in the hardware industry is gone forever.

Profits have begun to decline. Now we take the current steel price as an example. The price of steel rose by RMB 100/ton during the day of March 17, 2011. In less than a month, the prices of various steel products rose 300 yuan to 500 yuan. The rise in steel prices has made it impossible for the steelmaking industry, which originally made less profits, to show its superiority. It has generally shown that profits can be almost zeroed and that the benefits of economic recovery are almost offset by an empty one.

Taking bathroom hardware as an example, the biggest cost of producing a tap product is the cost of raw materials. The current faucet products are mainly based on copper materials, and the price of copper is about 38,000 yuan/ton, according to industry insiders, raw materials. The cost accounts for more than 70% of the total production cost. According to the domestic gross profit margin of 30%, the cost price of a faucet is approximately 200 yuan.

Many hardware and electromechanical companies, including bathroom hardware companies, are all good and bad, and they share the same low profits. Their comprehensive analysis is not exceptional:

1, there is no professional market to cultivate the general consumers to buy hardware products is the principle of proximity, in a random grocery store, daily supermarket to buy, and the hardware industry is not closely related to the development of professional markets.

The traditional hardware product distribution center is no systematic marketing strategy, and lack of related regional protection, stable price system is beyond discussion. Once the professional hardware market is formed and the market has strong supervision, the hardware companies that settled in can be guaranteed to be worthy of the name, forming the centripetal force of consumers' purchases, avoiding the production, the flocking of peers, and the phenomenon of blind purchases.

2. There is no comprehensive brand capacity Hardware products that are generally circulated in the market have a single style, outdated style, and have rough workmanship, and even no brand protection, thus failing to gain consumer trust.