Question 1: How to calculate the profits of convenience store products and how to operate them? For example, they say that the positioning of domestic convenience stores is unclear, that domestic convenience stores are lagging behind in value-added services, that domestic convenience stores have not found a profit model, etc. Many corporate executives feel that their glasses are covered with calluses.
Don't understand how to solve the problem.
I think the profit of franchise stores is divided into three levels: primary profit: selling basic goods, relying on gross profit margin and rebates to survive; transitional profit: relying on franchising, becoming bigger and stronger, and achieving profitability; ultimate goal: relying on piggybacking and e-commerce
, fully profitable.
These three levels are advanced one by one. If any level is not done well, it will be difficult to move to the next level.
There are also some problems in the sales of basic commodities at present, but I would like to focus on the second stage - the transition period profit model.
First of all, it is very difficult for a convenience store to be fully profitable without a franchise.
Theoretically, if the number of direct-operated stores grows to 100, you cannot guarantee that every store location is a prime location. There may be 10 stores that are profitable, 30 stores that are flat, and the other 60 stores that are losing money.
(This ratio is not alarmist among mainland directly-operated stores).
We call them "Excellent Store", "Zhuangjing Store" and "Ziqiang Store" in turn.
As competition becomes increasingly fierce, if the company's sales cannot keep up at this time, it is difficult to say whether the 30 Zhuangjing stores can be maintained.
Therefore, it is normal for the company to suffer overall losses.
If you join the franchise, the situation will be greatly improved: first of all, your 10 profitable stores can continue to be directly operated, or you can join them through bidding; secondly, your 30 Zhuangjing stores will all be profitable after joining - the cost will be reduced (tax, tax, etc.)
Manpower), efficiency improvement (there must be a difference between your own business and the company's business, let alone you are a dedicated employee), in the same way, even if the sales do not change after joining the Zhuangjing store, it is still a profit; again, your 60
For a self-improvement store, most of your energy can be used to deal with this burden - if there is a major flaw, close it; if there is no major problem, adjust it, and if you can turn a loss into a win or even, then join; this cycle is a virtuous circle.
Funds and costs are gradually recovered, and new stores can be developed.
What needs to be reminded is that stores with serious losses are not suitable for franchise, and they should be closed when necessary; if they can maintain it, they can maintain it. Only stores with a balance of income and above are suitable for franchise.
No matter what, once a Ping Ping store joins, both the company and the franchisee will make a profit.
(The premise is that the franchisee understands retail:)) The company will be more dynamic and will not be dragged down by Ziqiang Store and Zhuangjing Store.
The principle of this theory is very simple and clear.
In practice, franchising is also an important means of making money.
The franchise ratio of foreign convenience stores is very high. Why do they want to vigorously develop franchises?
An analysis of 7-11’s annual report will reveal the problem.
Its profit ratio is roughly as follows: franchise gross profit commission is 90%; non-operating income is less than 1%; direct-operated store merchandise gross profit income only accounts for 9%, and many of its products are exclusive products or self-developed products, with high gross profit.
It is difficult for domestic convenience stores to do this for the time being.
Okay, even if the domestic convenience store business catches up with 7-11, is it okay to rely solely on the gross profit of goods?
The truth is obvious.
That’s all I have to say about how to make profit by joining the franchise.
What needs to be pointed out is that it will not work if China’s franchises copy those from abroad.
Personally, I think that China is currently suitable for entrusted franchises, and it is not suitable for gross profit commission in the early stage.
In a word: We must build a "convenience store with Chinese characteristics" franchise.
Secondly, for convenience stores to be profitable, they must have a strong purchasing department.
The so-called strong does not mean being big, but using research and marketing concepts to purchase convenience store products.
Convenience store purchasing is more about creative purchasing than selective purchasing.
These determine whether the company can obtain the above 9% gross profit income from goods.
If the purchase of convenience stores is just the same basic product negotiation as that of hypermarkets, how can the products be competitive?
Why do customers pay for high margins?
Why should franchise owners choose you instead of other brands to join?
Many convenience store executives have been wondering, which department of the company is most important?
Most people think that it is the development department, because the value of network resources is the most meaningful, and you can "marry someone" when the situation is worst.
This idea is correct to a certain extent, but if it is not speculation, then I think it is still crucial to do a good job in business.
One of the keys to running a good business is what to sell.
Besides convenience of time and space, what else can we offer to attract customers?
No matter what you sell, it is necessary for customers in the business district to report to the store every day.
As for operational capabilities and positioning issues, I don’t think the short term is the main reason.
Convenience stores still have insufficient customer base in mainland China (at least in Beijing). The more they are segmented, the harder they are to operate.
What experts call positioning is very important, but you must know that the initial stage (introduction period) of convenience stores can only be for the public. As far as I know, convenience stores in Xi'an, Nanchang and other places are still... >> Question 2:
What is the average profit of a convenience store?
The gross profit is generally between 30% and 40%, and the final profit depends on the comprehensive expenses!
Comprehensive expenses: labor, housing, rent, water charges, electricity charges, maintenance charges, material charges, product losses, promotions, external service charges, taxes, miscellaneous charges, office supplies, card swiping fees, franchise commissions. Final profit: equal to business
Amount - purchase cost = gross profit - comprehensive expenses = net profit.