How to make a lot of money in the steel business?

Business is getting harder and harder to make a profit." This is nowadays in the steel circulation area often heard a sentence. However, business is difficult to do also have to do, the way is always more than difficult. Today, some steel dealers on the profit model of innovation, seems to be more concerned than ever. What is the profit model? To put it plainly is a way to make money. Dealers from the top of the purchase of steel, markups sold to the next, earning a sales differential, which is the dealer's traditional means of profitability. Ancient Chinese businessmen "secret" business strategy, one of which is "when cheap and buy, although expensive has been cheap; when expensive and sell, although cheap has been expensive. Since the reform and opening up, with the steel as an important means of production as a commodity into circulation after the market, the early batch of steel traders to seize the opportunity, by virtue of their own high degree of familiarity with the local market as well as more efficient than the manufacturers of the resident, lower cost of the operating system than the local end-users more than the information source of the market trends, the upper to undertake the manufacturer's steel sales business, and down to the service of the local end-users, and thus gained the survival of space. The company has been able to gain survival space and profitability by taking over the steel sales business of manufacturers and serving local end-users. Especially the rapid development of China's iron and steel industry, the market is large, low threshold, high profits, prompting China's steel distribution industry in the past two decades to get a high-speed development, a number of private steel dealers rapidly growing. However, with the market pattern of the increasingly perfect, as well as scientific, refined development of the tide came, individual, family-based steel dealers in the past is no longer the scenery. Manufacturers of access flattening, direct sales model, leading to increasingly fierce competition in the market. Especially in the face of steel prices "upside down", the factory price is higher than the market selling price of the situation, steel dealers rely on the traditional "cheap and buy, expensive and sell" profit model has been difficult to make a profit, and some steel traders are even in a difficult situation to survive. Some economists believe that now individual dealers activities, development of the stage has become smaller and smaller, the development of dealers seems to have entered a "bottleneck". At present, this kind of domestic and soil, single and small individual dealer groups are gradually shrinking, until the more advanced international development wave washed away. In the near future, the perfect steel modern logistics system is likely to replace most of the distribution function of steel dealers. In this environment, steel dealers must change the traditional profit model, to adapt to market changes, or no profit, can not survive. Faced with huge changes in the market environment, some steel traders with a certain strength have begun to try to explore new profit models, such as brand-based profit model, service-based profit model, etc., these profit models reflect the three core competition, that is, the product as the core of the competition, the service as the core of the competition and the creation of the core of the competition, and the three core competition and advocate the optimization of the product structure for the profit model, the function as the core of the competition, and the optimization of the product structure for the profit model. These three core competitions advocate a profit model characterized by optimizing product structure, a win model with function as the basic feature and a profit model with innovative service as the breakthrough. Product structure profit model Nowadays, steel traders pay more and more attention to the product structure of their business, constantly optimize steel varieties and specifications, pay attention to the famous brands produced by large state-owned enterprises or steel favored by downstream end-users, or provide marketable steel according to the requirements of the users to expand the market share. For example, the purchasers of some tunnels, rail transportation, Expo venues and major municipal construction projects in Shanghai put forward higher requirements for rebars, wire rods and other construction steel, such as rebars and wire rods produced by general small and medium-sized steel mills, which are refused to be accepted by the quality supervision department of the tunnel construction projects. Therefore, steel traders in the procurement of steel, steel origin, brand, quality, etc. attaches great importance to the general procurement of large steel mills from the famous brand products, thereby improving the bargaining power of the channel and increase end-user awareness, and ultimately from the optimization of the product mix to achieve the desired profitability. Innovative service profit model steel traders to the customer service extension radiation to value-added, from the end user to enhance value-added services to improve their own profitability. For example, some steel trading companies to establish steel processing, distribution centers and logistics bases, through steel processing, distribution and warehousing and transportation, etc., by all means to reduce the customer's procurement costs and transportation costs. At the same time, through the processing and distribution of steel, the utilization rate of steel can be improved, so that customers can get real benefits, thus establishing a stronger cooperative relationship with steel traders. The steel traders also improve their own economic efficiency in the value-added services. Scale operation profit model Nowadays, the domestic steel traders exist in small scale, large number, poor strength, low level and other issues are more prominent, the ability to defend against market risks is not strong, the lack of the right to speak on the price of steel, seriously affecting the profitability of steel traders. Therefore, many steel traders try to merge and reorganize to build a large steel trading group companies, expanding the scale of the same time to grow the strength of enterprises. Such as steel orders, steel trading group companies can win price advantage with large quantities. This is like a modern hypermarket versus a small supermarket, the same as the use of scale profit model. Supply and demand network chain structure profit model Many steel dealers with certain strength have begun to study the supply chain, through the exploration of the supply and demand network chain structure to achieve corporate profitability, such as steel traders and producers, logistics companies, financiers, wholesale agents to form an alliance. According to the international successful cases, a supply chain must have a chain master, in terms of steel, the chain master can be a steel mill, can also be the downstream steel distributors, construction of steel production, sales of supply and demand network chain structure. This is an important way to enhance the core competitiveness of steel traders, and also the best mode to realize profitability. British economist Christopher said that in the future, not only the competition between enterprises, but also the competition between supply chain and supply chain. Industry insiders believe that the shift in profitability forced steel dealers have to change their own characteristics according to marketing ideas, the implementation of differentiated marketing model.