Reasons for revenue reduction in hardware enterprises

After several years of rapid development, hardware companies have not only failed to usher in their "spring" this year, but have also been questioned by consumers. The market competition is becoming increasingly fierce, and profits are gradually declining. What are the reasons for all of this?

1. Uncultivated professional market

Generally speaking, consumers can easily purchase hardware products at a nearby grocery store or daily supermarket. This is because the hardware industry has not cultivated a professional market, and traditional hardware distribution centers lack systematic marketing strategies and related regional protection, let alone a stable price system. If there is a professional hardware market, there will be strong market supervision, consumer purchasing centripetal force can be formed, and market order will also be excellent.

2. Lack of comprehensive brand capability

After a careful understanding, it is not difficult to find that the hardware products circulating in the market today have rough workmanship, single and outdated styles, and insufficient brand protection, which seriously reduces consumers' trust in the products. When consumers purchase hardware products, they attach great importance to the brand, which can be said to be the primary demand for purchasing products. The poor comprehensive strength of the brand undoubtedly restricts the overall development of the hardware industry.

3. Foreign funded enterprises seize the market

Most of China's hardware products, especially the mold industry, are produced in small workshops, and the products produced lack professionalism and refinement. In contrast, most foreign mold companies are "small and specialized" and "small and refined", which opens up a channel for foreign-funded enterprises to enter the Chinese market.

4. Raw material prices rise, profit margins decrease

The direct downstream material of hardware products is steel, but the price of steel continues to rise. Taking bathroom hardware as an example, the cost of raw materials for producing a faucet product is the highest. Currently, faucets are mainly made of copper materials, and the price of copper is around 38000 yuan/ton. According to Yikuang.com, the cost of raw materials accounts for more than 70% of the total production cost. Calculated based on a gross profit margin of 30% for domestic sales, the cost price of a faucet has reached 200 yuan.

Whether the hardware industry can usher in spring in the future, everyone is waiting and watching.