The pursuit of profit is the starting point and end point of every agricultural machinery enterprise, and no one wants to live with money. However, domestic agricultural machinery enterprises have long been limited to a single way of profit, agricultural machinery manufacturers earn manufacturing money, agricultural machinery dealers earn porters' money. In the incremental market before 2015, competitors are relatively limited, the market is not fully satisfied, the operating performance of production enterprises and distributors are growing, and the single profit model has its rationality and legitimacy, but after 2015, with tractors, combined harvesters, rice transplanters and other large types of agricultural machinery successively entering the stock market, manufacturers and distributors are facing the problem of weak growth and shrinking profits, and a single profit model cannot support the pursuit of higher level growth of agricultural machinery enterprises. The market has begun to call for a multi-level profit model, and enterprises need to obtain revenue and profits at multiple points, multiple links, multiple levels and multiple channels.
Regarding the multi-layer profit model, few people in the agricultural machinery industry are mentioned, and few people take the initiative to think, this article will popularize the concept of multi-layer profit model, and discuss how agricultural machinery enterprises build a multi-layer profit model.
First, in-depth understanding of what is a multi-level profit model
The multi-layer profit model, as the name implies, refers to an enterprise through multiple different channels, different links, and different periods to achieve profits, and the image metaphor is to eat more than one fish.
As for the multi-level profit model, as early as fifteen years ago, the author studied the remanufacturing business of the American construction machinery giant Caterpillar.
At that time, the domestic construction machinery enterprises and users can be said to be a typical "hammer sale", the product sold to the manufacturer and the user has almost no relationship, and Carter is the product and users for the full life cycle management, the product sold to the user is the beginning, the back of the genuine parts sales, financial leasing, two mobile phone several transactions, remanufacturing, and remanufacturing after the financial leasing, remanufacturing two mobile phone transactions, trade-in, etc., products from Carter dealer stores after sales, In the whole life cycle of the equipment, Carter and the user to have a relationship about 10 times, each relationship, Carter in the user service or value at the same time, manufacturers also to collect relevant fees or earn profits, it is said that Carter new machine sales and aftermarket profit ratio is 3:7, that is to say, more profits are obtained through many links of the new machine after-sales, that is, the aftermarket, which is a typical multi-level profit model.
If Carter's multi-level profit model is not clear enough, let's talk about KFC's 7-layer profit model: the first layer sells hamburger chicken wings to make money, the second layer is the money for the supply of ingredients, that is, the distribution of ingredients to franchised stores, the third layer is brand usage fees, the fourth layer is the use fee of the software management system, the fifth layer is the money of commercial real estate, the sixth layer is the money of selling user data and attracting traffic, and the seventh layer is the money at the level of earning capital.
Multi-layer profit model is a quite clever business strategy, multi-layer profit is not a simple sum of profits, but through the ingenious combination of products, services and capital and other elements have achieved the multiplier effect of profits, behind which there is the long-term spirit of enterprises, the strategic intention of industrial coordination, capital operation and other complex operations.
Smart companies are not only one layer of profit model, but more than two layers of profit model, the author once wrote an article called "domestic brands and multinational companies only one financial instrument", said that John Deere, Keyes, Kubota and other multinational companies have more than two layers of profit model, and domestic brands only one or two layers of profit model, so domestic brands live very hard, sell a lot of products, but profitability is far from comparable to multinational companies, so the construction of a multi-level profit model is very critical and urgent.
Second, how to build a multi-layer profit model for agricultural machinery enterprises
Let's take agricultural machinery production and manufacturing enterprises as the main body to discuss how to build a multi-layer profit model.
The first layer: new products
Almost all manufacturing enterprises business is around the product to carry out, of which new product sales is the vast majority of manufacturing enterprises to obtain profits in the main way, or even the only way, new product sales is enterprise operation, and the next to talk about the multi-layer profit of the 1, only the first 1, later it is possible to derive other possibilities.
For agricultural machinery enterprises, this "1" is the source of everything and the answer to everything, and the frequency and profitability derived from the "1" are closely related to this "1".
Such as the same combined harvester, John Deere S660 new machine sales of 2.5 million yuan, some buyers after three years of use of the second mobile phone at a premium of 2.65 million sales, buyers not only free use of the machine for three years, but also earned 150,000 yuan, to achieve multi-level profits, first of all, the product life cycle is long enough, the product has a strong retention rate, the product has the value of multiple circulation.
It can be seen that to build a multi-layer profit model, the most basic and fundamental requirement is to do a good job in the product, and good products are the source of everything and the answer to everything.
The second layer: accessories sales
Let's first popularize the concept of zero ratio: zero ratio refers to the ratio of the sum of the prices of all loading parts of the vehicle and the guidance sales price of the whole vehicle, multiplied by the percentage, and finally obtained a percentage coefficient.
For example, the price of Mercedes-Benz C-class new car is about 300,000 yuan, if all parts of the vehicle are disassembled and sold, according to the latest statistics, the zero ratio is 823.87%, that is, if the 300,000 C-class is disassembled and sold, the value of parts is 8 times the price of the whole vehicle, and the cost of 300,000 yuan can be exchanged for more than 2 million profits.
The introduction of the concept of zero ratio is to let everyone realize the commercial value of accessories, the price of accessories sold on new machines and the sale of accessories separately can be several times different, agricultural machinery products will not be 8 times worse, but 2-5 times is universal.
For domestic agricultural machinery manufacturers, the second layer of multi-layer profitability is to drive the sales of accessories through the sales of new machines, usually the original manufacturer is more than 2 times higher than the price of market parts and analogues, which can fully reflect the commercial value of accessories.
In fact, there is a problem in this place, that is, how to increase the sales of original manufacturers (Japanese companies called parts)? Not every agricultural machinery manufacturer is qualified to let dealers willingly buy original parts at a high price.
For example, large manufacturers will adopt mandatory "quotas" or bundled sales, such as a European and American company requiring that users who purchase a large harvester must buy 1 million accessories; Some factories inflate the price of the host and sell high-priced accessories in disguise in the form of giving users a large number of accessories with the car; There are some factories that attract users to buy accessories with the gimmick of authentic original parts.
But these tricks can not solve the fundamental problem, awakened users will not buy this account, and competitors will not allow this phenomenon to exist for a long time, the real to increase the sales of original parts is to control the price of original parts at a reasonable level, and carry out long-term and sustained promotion and user education, to implement the "value navigation" project, so that users recognize the value of high-quality accessories, and can easily buy original parts, the increase of original parts is not from the kidnapping of dealers, users, but from the analogues, Inferior accessories, fake and shoddy accessories squeezed, "either the east wind overwhelms the west wind, or the west wind overwhelms the east wind", in the process of trade-off, the sales of original high-quality parts can be increased.
In short, for agricultural machinery enterprises, especially strong brands, strive to sell as many original parts as possible, usually the original parts are higher than the profit margin of the whole machine.
The third layer: financial and insurance products
According to John Deere's 2022 financial report, John Deere's financial business achieved US$800 million, or about 6.4 billion yuan, contributing a profit of RMB840 million, accounting for 0.17% of John Deere's revenue and 16.25% of John Deere's total profit of US$7.13 billion.
I don't know if you can see the clue, John Deere is the world's largest agricultural machinery manufacturer, sales revenue of about 380 billion yuan in 2022, John Deere's first layer of income comes from construction machinery, agricultural machinery, lawn machinery, that is, the income from selling products, but John Deere also has a second and third layer of income, this income is not available in many domestic agricultural machinery enterprises, financial business is John Deere's most important source of income and profit in addition to products, Deere construction machinery and agricultural machinery financial business penetration rate of more than 60%, but in addition to new products, second-hand construction machinery and agricultural machinery also have a demand for financial leasing tools, usually John Deere's second-hand construction machinery and agricultural machinery to circulate 3-5 times, that is, in the financial business John Deere to earn more than 3 times of income.
In 2021, the author wrote an article "There is only one financial instrument between domestic brands and multinational companies", which says that multinational companies have multi-layer profit models and multiple tools.
Financial tools for agricultural machinery enterprises, on the one hand, is a very effective promotion tool to increase sales, is to turn the potential demand of users in the future into effective demand in advance, on the other hand, it is also a way to increase revenue, because users have to pay to use financial instruments, even if some factories provide users with interest-free financial instruments, but behind it will still design profit points that users cannot see or simply cannot understand.
It is not easy for agricultural machinery enterprises to earn the third layer of profits, first of all, the product quality must pass the customs, so that the loans or financial leases provided to users will not be overdue or defaulted; Secondly, the value of the product should be high enough, and the necessity of agricultural machinery finance with a domestic product value of less than 50,000 yuan is not strong, or it is not economical and cost-effective.
In this sense, domestic agricultural machinery enterprises to earn the third layer of profits, first of all, to do a good job of the product, followed by to the high-end, the more high-end agricultural machinery, the greater the demand for financial business, and have the opportunity to use financial business many times.
The fourth layer: scientific research, technological transformation, project income
This may be a Chinese characteristic is also a global unspoken rule, the source of profits of enterprises is multi-channel, product and operation profits are the majority, in addition, enterprises must also find ways to get profits from the surrounding communities or surrounding environment, enterprises operating in China can enjoy a variety of policy resources, project resources, scientific research and technological transformation support provided by relevant government departments.
For example, the prospectus recently released by a company to be listed showed that it won various policy subsidies of 70 million yuan in 2022, 95 million yuan in 2021, and 24 million yuan in 2020 and 2019, of which various subsidies accounted for one-third of the total profit in 2021.
"The way of heaven, the loss is more than enough, the way of people is not enough to serve the surplus", large enterprises and small enterprises are different, that is, large enterprises can obtain more resources from the surrounding environment, and small enterprises mainly rely on products and services provided by a single source of profit, which is the so-called "Matthew effect", to some extent, the competition between large enterprises and small enterprises is unequal.
Therefore, enterprises must not only do a good job in operation, on the other hand, they must also actively move closer to the management department, and they must grasp the distance, but they must not be alienated from the management department, and the policy resources that should be won should be won, and the strength that should be borrowed should be borrowed, and the enterprise should not be false and high.
The fifth layer: upstream and downstream business extension revenue
To increase the profit link or lengthen the interest chain, there are generally two completely different operating methods:
One is to extend upstream into the source of component manufacturing, raw materials, and even raw materials. Such as iron ore, copper ore, aluminum ore resources, etc.
Upward extension can change external resources into internal profits, in addition to better control the quality of parts, realize the synchronous development of components and the whole machine, improve the efficiency of the entire manufacturing end, and realize the means of investment, equity participation, mergers and acquisitions or incoming processing.
The second is to extend downstream into the circulation of agricultural machinery, agricultural machinery operations, agricultural planting, agricultural product processing and other links. This belongs to the deep water, is a heavy model, but to the downstream extension of many links, profit points will increase, such as domestic agricultural machinery production enterprises their own establishment of cotton picker operation service company, purchase of their own cotton picker operation, on the one hand to solve the problem of domestic cotton picker sales, on the other hand to increase the income of the operation, can be said to be a very smart business strategy, embedded in the middle of the multi-layer profit model, worth learning from.
Sixth layer: brand premium
There is a price list of the 2022 full-feeding rice combine harvester provided by netizens. It can be seen that the average price of Ward, which is also a 6kg rice combine harvester model, is between 90,000-130,000, Revo is between 100,000-150,000, Willow is between 100,000-110,000, while Kubota is between 150,000-250,000, and Yanmar is between 170,000-250,000, which shows that Kubota and Yanmar, which have brand advantages, have a high premium ability.
160,000 yuan between 90,000-250,000 yuan is the living space of the domestic rice combined harvester, and it is also the premium space of the brand.
Brand is psychological admiration, enterprises to increase profits, high-quality products can only be regarded as basic skills, selling good products at a good price is the real skill, and brands can do this.
Whether it is an enterprise or an individual, the most valuable asset is the brand, a successful brand is often any tangible asset can not be replaced, the price and function of the goods, not only determined by the enterprise, but also in the consumer think that the goods are worth, what is the use, the most important money-making tool of the enterprise is the brand, the brand is a premium weapon, promote the product to sell expensive, sell fast, sell more, sell for a long time, to achieve the goal of continuing to make more money, the power of the brand can also accelerate the capital turnover, bring greater cash flow, It is a fast and lasting way to monetize.
At the same time, the brand is also a bridge to develop from a small enterprise to a large enterprise, a small factory without the support of the brand, it is difficult to resist various risks, only by establishing brand advantages, can we have the capital to expand and copy.
Brand is also a sublimation of business, entrepreneurs in the new era of common wealth can not simply position themselves and enterprises to make money, do business, but need to rise to the brand, have the pursuit beyond product function and profit. In the final analysis, operating a brand is to operate a relationship, do a good job in products, and obtain excess profits; Make the brand stronger and establish a moat of competition and price war.
The sixth layer: investment and financial income
Fundamentally, the profit of a company comes from three channels: selling products, selling companies, and making money.
At present, domestic agricultural machinery enterprises only have a single profit channel, that is, only one layer of profit model, to reach the fifth layer, the sixth layer is very difficult, agricultural machinery enterprises should through the sale of products and services to obtain the first pot of gold and complete the original accumulation, on this basis to use their own assets, funds, prestige, brand, etc. to carry out investment and financial management.
For example, enterprises can use the idle funds lying on the account to manage short-term wealth or purchase long-term financial products, operate stocks, and can also invest in other enterprises, such as upstream supporting enterprises or new businesses and technologies that represent the future of the industry.
The reality is that many agricultural machinery enterprises have a lot of resources, but these resources can not make money, can not amplify resources, can not be realized, this aspect is not a lack of resources, but backward thinking and outdated concepts.
Tier 7: Capital gains
Recently, the successful IPOs of Chongqing WM and Sino Navigation have given two injections of strength to the agricultural machinery capital market, and also triggered the second round of IPOs of domestic agricultural machinery enterprises.
The stock price of WM on the first day of listing rushed to 85 yuan, that is, when the original stock was invested, 1 yuan became 85 yuan, increasing by dozens of times, which is a geometric number of wealth growth, which is different from the traditional production + distribution, reproduction + redistribution linear profit model, is the highest level of profit model that human beings can think of, but also a higher dimensional, the most intelligent profit model, is the crown jewel of human business model, so that countless grassroots become rich overnight, and achieve the counterattack of life and career, At the same time, it is also the ultimate pursuit that more people dream of.
epilogue
Multi-layer profit model is a very smart business model, perhaps the deepest truth of business, agricultural machinery enterprises in the future competition to achieve profitability and achieve more profits, can not only have one layer of profit, but artificial, consciously design multi-layer profit model.
If the entire agricultural machinery industry chain is compared to a fish, agricultural machinery enterprises to do is not only to eat fish, but to turn fish heads, swim bladders, fish offal, fish roe, and even fish scales, fish bones, etc. into money, in fact, this is not a rhetoric, many restaurants have done this, many agricultural machinery enterprises have also done this, in the future, multi-layer profit model of agricultural machinery enterprises have a higher probability of survival.