These reasons lead to low profit margins for cutting companies?

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The market is weak, the competition between the peers is fierce, and the cutting-slice industry enterprises are faced with the dilemma of low profits. The comprehensive analysis is nothing more than the following reasons:
1. There is no sound market mechanism
As is known to all, the flat cutting disc on sale industry is difficult to form a relevant management mechanism due to the low barriers to entry. Although many associations and institutions in the industry have called for fair and reasonable competition, they have little effect.
The traditional distribution center of cutting chip products is a systematic marketing strategy, and the lack of relevant regional protection, the stable price system is even more difficult to talk about. Once the professional market is formed, and with the strong supervision of the market, the production enterprises can be guaranteed to be worthy of the name, forming a consumer’s purchase centripetal force, avoiding the phenomenon that the peers flock to, blindly produce, cause inventory, and lower prices.
2, no comprehensive brand ability
The cutting piece products that are generally circulated in the market are simple in style, outdated, and have a rough workmanship, even without brand protection, so that consumers’ trust cannot be obtained.
According to relevant market research, 45.3% of hardware consumers use the brand as the primary demand for purchasing products when purchasing cutting products, which implies that it is even more difficult for unnamed brands to gain a foothold in the market. In this era of information redundancy, the brand is obviously a target, which can concentrate the people with fixed characteristics under their unified management, which is more conducive to the promotion of enterprises.
3. Foreign companies seize the market
A large number of hardware products in China are produced in small workshops, especially in the fiber cutting disc Chinese supplier industry. Because of their lack of professionalism and exquisiteness, many foreign-funded enterprises have opportunities to take advantage of.
On the contrary, foreign cutting companies are mostly “small but specialized, small and fine”; foreign famous brand cutting products make domestic enterprises far behind, so domestic cutting products are difficult to enter the high-end market, and only some services are not very demanding. Business.
4, the cost of rising public
From the industry operation report of the previous two years, the main reason for the decline in profit growth in the industry is the increase in costs. The increase in administrative expenses and the increase in financial expenses were relatively large. Electricity, workers’ wages and purchase of raw materials all increased in varying degrees. Many enterprises returned funds, processed inventories, and sold products at low prices. In addition, due to environmental protection or market reasons, enterprises have to increase the cost of transformation and upgrading, and the current transformation and upgrading is not a simple furnace, the site is increased, but the quality changes, intelligent, automated and widely used, advanced The use of technology and technology has increased investment in fixed assets, increased costs, and diluted profits.
Nowadays, the quality of our products is constantly improving. Many products have been able to reach foreign standards. The continuous decline in prices is caused by mutual price reduction. It is hoped that enterprises can communicate with each other and learn from each other to achieve the goal of common improvement. In the process of learning, we must digest advanced experience, we must not make hard imitation, and we must respect the intellectual property rights of R&D enterprises. This is also the basis for in-depth exchanges.


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