Lao Gao: This cold winter will be very long. I personally give some suggestions to merchants

Let me talk about my phased summary of the e-commerce industry. At the beginning of the year, many people are looking forward to the outbreak after the epidemic, but objectively did not appear. Most industries did not explode, and what they waited for was even shrinking. Especially for merchants with annual turnover below 30 million, the probability of performance decline is relatively high.

The economic environment is gradually recovering, but it takes a process. I communicate with members every day. This year, it is not the decline in platform traffic, but the decline in purchasing power of the entire consumer group.

Many merchants told me that their turnover has not increased or decreased, but their profits have declined. Why? Because the same performance costs more than in previous years.

Visit and exchange of the Guangdong Branch of the Golden Crown Club in October 2023

This cold winter is probably longer. Today, I will give some suggestions to merchants:

01

The company is small and the business is bigger

The next ten years are not suitable for starting a business. If someone tells you that the environment is good and advises you to start a business, this person is definitely a liar. In the future, only bosses with a level of 80 or above can succeed. If you have a level of 80 or below, I don’t recommend that you persist.

Ten years ago, if you tried one point of effort, you would get three points. Now it may be a 0.5 point return, or even no return. Instead of starting a business, it is better to join a company and work hard to become a partner.

If you are starting a business, I’ll give you a word, make the company smaller and the business bigger. Which one is better, if you make 10 million yuan with an annual turnover of 500 million yuan, or if you make 30 million yuan with an annual turnover of 100 million yuan? Obviously the latter.

02

Expand the dividend period, focusing on the internal circulation period

In the era of serious intra-volume, we must focus more on core competitiveness and do more professionally in professional fields, rather than blindly expanding and doing things we are not good at . What is the probability of success if you are not good at competing with others for 10 years?

In the next few years, you should focus on your own advantages and cooperate with foreign countries. If you are good at supply chains, do your supply chain well. You don’t need to study cross-border e-commerce by yourself. You can directly cooperate with the boss in the club who does a good job in cross-border business. He will do Amazon and sell your goods.

The slow economic growth in the next ten years will surely allow many e-commerce companies to return to their core competitiveness and become industry leaders. When you focus more and more consumers recognize you, the brand will naturally come out.

03

E-commerce people strive for more efficiency

When I was doing research at Jinguan Club, I found that many top merchants are still growing in performance , and some merchants are still expanding in categories. Many opponents quit and gave up, freeing up a lot of market space for them.

This shows a phenomenon: the strong will always be strong, and small and medium-sized businesses will become smaller and smaller.

E-commerce companies that live well have one rule - high efficiency , either high team efficiency, high traffic efficiency, or high efficiency in new products.

Those companies that have collapsed or whose performance has declined often have poor organizational capabilities, poor talent echelons, or poor traffic efficiency. Therefore, we must gradually reduce departments and businesses with poor manpower and invest more in places with good manpower.

The current economic environment is competing for core competitiveness, and how much muscle you have instead of fat. If you are strong, you can live for a long time.

04

Only cooperate with top talents

Talent is what e-commerce bosses need to pay attention to in recent years. Being trapped in the business will consume your time infinitely. Find someone who has succeeded. Finding top talents can be very difficult and may take time, but this is right and worth going all out. There is no time to try and error. If you go to find someone who makes do with it, it will waste a lot of time once you work together.

05

Repurchase rate > GMV

In the past two years, everyone will find that traffic is becoming increasingly unstable. If your business does not repurchase, no matter how much traffic you have, it will be a silhouette of fireworks. You will spend 10 million yuan in advertising fees this year and another 10 million yuan next year. The financial perspective is extremely unfavorable.

I also invested in 45 projects. In the past, I often looked at the company's annual turnover. Now I focus on the repurchase rate, or renewal rate . For example, I invested in a technology company, and the repurchase rate of their products can reach 90%.

A repurchase rate of 30% is a lifeline. Below this value, it will inevitably mean that you have to continue to invest in advertising fees. Traffic is getting more and more expensive, and you will be very dangerous.

The era of turnover is over, and we should pay attention to whether there are more old customers left this year than last year.

06

Public and private domains are equally important

Many people can make the repurchase rate very high through private domains, but if your public domain capabilities are poor and your new media capabilities are poor, consumers have not heard of you for a long time and will slowly lose it.

Those who do well in private domains should also consider doing Xiaohongshu, investing in some building or airport advertisements, and expanding your brand reputation from multiple angles. People are "tempered by the incest". When they buy something, they also see if others have heard of it and whether they have bought it.

07

If you can't hold on, layoffs are better than bankruptcy

Sometimes I really envy those companies that can go bankrupt, live a life without having to be so stressed, cherish life and start a business less.

If you really can't hold on to your business, layoffs are better than bankruptcy. If you go bankrupt, you will be done. At least the company is still alive and you can support some employees as much as possible.

08

Adjust your mindset and fight with a relaxed heart

Don’t pursue double your performance too much, because it’s difficult to double, and it makes you unable to sleep. People are insatiable. You have done 1 billion and you still want to do 10 billion. You still want to do 10 billion and you still want to do 100 billion. You may be happy all day when you truly realize it. real. I have talked to many listed company bosses and they told me that they were only happy for a day when the company went public. We must work hard with a contented attitude.

I am very content anyway. I can achieve this with such a look and IQ. I am happy every day - even if I lose a lot of money and go bankrupt some companies. Whether it is successful or failure, I am happy to achieve my goal or not .

I hope everyone will also have this mentality and spend more time pursuing happiness. After happiness, you will have more energy, so that you can start a business more continuously.

In short, in one sentence: the current economic environment cannot recover explosively, so when making strategic layouts, you must not expand blindly. In the next one or two years, focus on where you can harvest food.

END

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Note annual turnover