Profit analysis of glasses industry
Relevant data show that 90% of the 320 million middle-aged and elderly people in China need glasses; Of the more than 20 million students, at least 80% need glasses. Moreover, a person needs more than one pair of glasses, and glasses are fragile, so the damage rate and renewal rate are very high. The annual demand of 50 million pairs, the annual sales of 20 billion yuan and the annual growth rate of 10% are the current market capacity of China glasses retail industry. The glasses market is a huge market, and people have to pay attention to it.
Glasses industry is a special industry. Semi-finished products must be processed by intermediate retailers before they can be sold as products. In this way, the profit of this industry is hard to ponder. At the same time, the information transparency of the glasses industry is very low. Frame lenses can only be sold after being processed by optical shops, so no manufacturer has such high enthusiasm to advertise, unlike electrical appliances and mobile phones. This has caused the information asymmetry between buyers and sellers. Many unknown factors in the glasses industry have caused a huge profit dispute between non-professionals and professionals.
I. Analysis of Industry Situation
1, profiteering theory of glasses industry
At the beginning of 2004, some media listed the glasses industry as one of the top ten profiteering industries in 2003. In May of the same year, China Economic Times published an investigation report: "8 yuan's glasses frames were sold to 180 yuan, exposing the amazing truth of the profiteering of the domestic glasses industry." The ex-factory price of 8 yuan spectacle frames sold to consumers' faces is 180 yuan. According to the survey, as far as the level of Wenzhou regular manufacturers is concerned, wholesale glasses 15-20 yuan is considered as high-grade,1kloc-0/5 yuan is considered as middle-grade, and 3- 10 yuan is considered as low-grade. But when these glasses frames appear at the counter of optical shops, they range from one hundred to two hundred to thousands.
The other half of the total sales of frame glasses is glasses, and this problem also exists in lenses. Ordinary myopia lenses, if they are white glasses, generally cost only 3 yuan to 5 yuan, and coated glass lenses cost only 8 yuan to 15 yuan, but they can be easily sold for more than 100 yuan by changing hands. Take imported Korean resin lenses as an example. The lowest wholesale price is 25 to 30 yuan, and the slightly better quality is 45 to 60 yuan. However, if you retail, you can sell it above 300 yuan. If it is a slightly famous resin lens such as Essilor, TAG Heuer, Su Na, etc. The retail price can be sold to 800 yuan at least, but the purchase price is only about 300 yuan. There are also sunglasses, the wholesale price is generally between 15 yuan and 35 yuan, but in shopping malls and specialty stores, at least they can be sold to 200 yuan. Even if it is 40% off, the business is still profitable.
2. Debate on non-profit
Glasses are a special commodity. Customers should have a pair of suitable glasses, and they must undergo optometry, processing, adjustment and review from the factory to the customer's use. So selling glasses is completely personalized service. Under the standard technical conditions, the optometry time is between half an hour and one hour, and the complicated and difficult cases are about two hours. It is generally estimated that the optometry cost is about 50~ 100 yuan, and the processing cost is about 25~30 yuan. However, there are many good lens processing procedures, and the time cost is also rising. Mass-produced lenses have myopia 1000 degrees and astigmatism of 200 degrees. If it exceeds this range, glasses lenses need to be customized, and the processing time should be 3 days to 1 week. Special needs even need to be processed abroad. Because optometry and processing are complex technical activities, the reflected value needs to be further calculated (the cost of optometry in the United States is about 30-50 dollars, and it is about 200-700 Hong Kong dollars in Hong Kong), but in China, free optometry and processing are generally used as selling points to attract customers, and their value is hidden.
For standard chain stores, the gross profit margin of invisible products is about 30%, and that of frames and lenses is about 50%. Part of the reason for this high profit rate is that optometry and processing costs are mixed in the price. Assume that the gross profit margin of the business can be maintained at around 50%. After sharing the operating costs, the expense structure is as follows: rent accounts for 14%~ 16% of the turnover, labor costs account for 13%~ 14%, marketing expenses account for 6%~8%, depreciation of fixed assets accounts for 3%, and value-added tax accounts for 17%. The total cost above is between 46.5% and 51.5%. In good times, the net interest rate is as low as 3.5%, and in bad times, it even loses money.
The glasses industry is neither a policy protection industry nor a monopoly industry; It is a normal development industry under market conditions. Through competition, the profit margin of businesses is getting smaller and smaller. Say it is a profiteering industry, it has no basis for profiteering, and there is no reason for the glasses industry to become a profiteering industry; All the expenses and sales profits of the glasses retail store are reflected in the goods. Consumers know nothing about many expenses of optical shops and are not familiar with the added value of optical products such as labor, technology, sales, design and brand name. Some consumers simply compare the ex-factory price of their own frames and lenses with the retail price of finished glasses, thus drawing the conclusion that glasses are profiteering, which is illogical.
3. Factor analysis
① Semi-finished products
Glasses are different from color TV phones and even cars. Optical shops sell semi-finished products, not finished products. "8 yuan frame" is just the ex-factory price of the factory. After the frames and lenses are sold to optical shops, a series of processing services such as optometry are needed. Optical shops need to be equipped with professional instruments and certified professional optometrists, not just a few salespeople. In this way, it is difficult to directly reflect the price reduction of glasses products from the factory to the consumer field.
② The transparency of industry information is low.
The information transparency of the glasses industry is very low. Frame lenses can only be sold after being processed by optical shops, so no manufacturer has such high enthusiasm to advertise, unlike electrical appliances and mobile phones. This has caused consumers' ignorance of glasses products. Information asymmetry between buyers and sellers. Salespeople know what glasses they sell, but consumers don't know the relevant knowledge. He just wants the more expensive the better. More often than not, he paid for it.
③ The influence of the old sales format.
The sales format of Laowangpu Wangdian has caused' three-point glasses and seven-point expenses', and its own price can't be reduced, which also hinders the emergence of new formats.
④ Industry agreement
In the past, there was a convention in the glasses industry that the purchase price multiplied by 2 or multiplied by 3 was the retail price in the OTC market. However, the insider revealed that whoever still abides by this rule now will be regarded as a fool, and even there is a jingle circulating in the industry: "20 yuan's glasses frames are sold to you by 200 yuan, friendship by 300 yuan and quotation by 400 yuan."
Second, the cost analysis
If we only look at the data of 8 to 180, there must be huge profits in the glasses industry that most people think. But whether there is profiteering needs comprehensive analysis, especially from the perspective of economics.
People in the glasses industry have their own analysis to prove that there is no profiteering in the glasses industry: glasses are a special commodity, unlike some products, the factory parts can be put into use after simple assembly. Therefore, for glasses with power, such as myopia glasses and reading glasses, there are more complicated links from the factory to the customer's use, that is, optometry, glasses matching and even reexamination. So selling glasses is completely personalized service. Under the standard technical conditions, the optometry time is between half an hour and one hour, and it takes about two hours for complicated cases. It is generally estimated that the optometry cost is about 50- 100 yuan (about US$ 30-50 and HK$ 700), and the processing cost is about 25-30 yuan. However, there are many good lens processing procedures, and the time cost is also rising. At present, myopia 1000 degrees and astigmatism 200 degrees are recommended. Those beyond this range belong to special groups and need to be operated separately. The processing time takes 3 days to 1 week, and it may even be shipped abroad for processing, and there will be customs charges. Because optometry is a highly complex technical activity, and it is a personalized service for each customer, the reflected value needs further calculation. However, domestic optical shops generally attract customers with free optometry and free processing, and their value is hidden.
The reliability of this set of data can't be said to be none, but it can't be completely believed. If it is true that the net interest rate of the optical industry is as low as 3.5%, then why are there so many optical shops? This set of data can only be said to be exaggerated by insiders.
But consumers still don't understand the cost of glasses, including:
Consumers can see that all the optical shops are located in downtown areas, and the expensive facade cost is a large part of the cost. According to the national standard for glasses (GB1351-1999), it takes half an hour to optometry, and it takes 15 minutes to try on the sample. This regulation increases the time cost of opticians, which also shows that the optician industry is a technical industry with technical costs.
In addition, the optician wants to open a shop. Take Daming Beijing Road No.2 Store as an example, its monthly rent is about 1 10,000 yuan, equipment investment is about10.5 million yuan, and personnel expenditure is about 6,000 yuan per month. In addition, there are liquidity costs and raw material inventory costs.
In terms of funds, an optical shop costs more than 2,000 yuan a day, so the sales of an optical shop must reach more than 2,000 yuan a day to make a profit.
Third, profit analysis
First of all, quote an analysis of the glasses industry:
"Standard chain stores, the gross profit margin of invisible products is around 30%, and the gross profit margin of frames and lenses is around 50%. We also want to reiterate that part of the reason why the profit rate is so high is that optometry expenses and processing expenses are hidden in it. We assume that the gross profit margin of businesses can be maintained at around 50%. After allocating operating costs, the cost structure is roughly as follows:
The rent accounts for 14- 16% of the turnover.
The labor cost is about 13- 14%, including managers, optometrists, sales, maintenance and processing personnel.
The marketing expenses are about 6-8%, including the promotional activities of chain enterprises.
The depreciation of fixed assets is 3%, mainly due to the consumption of optometry equipment and processing equipment.
There is also value-added tax 17%, 50× 17% = 8.5%.
Other expenses 2%, including distribution, rejection rate, etc.
The total cost above is between 46.5-5 1.5%. In other words, the net interest rate is as low as 3.5% when the business is good, and even loses money when the business is bad. "
Although the credibility of this set of data is not high, imagine that there are so many optical shops with such low profit margins, and each one is more luxurious than the other. There must be a lot of exaggeration in this set of data, but its economic analysis angle is complete.
Let's make a hypothesis, taking Jingzhou Daming Optical Shop Beijing Road No.2 Branch as an example, and calculate its profit rate.
Cost part:
Store rent: 1 1,000 yuan/month
Investment in store decoration: 20,000 yuan, to be replaced once every three years.
Equipment investment: 6,543,800 yuan+0.5 million yuan, amortized according to the ten-year waste period.
Labor cost: 8000 yuan/month
Tax: 17% profit margin.
Amortization of inventory and other expenses: 654.38 million yuan/month.
In this way, we can calculate the daily capital expenditure of a store: about 2 183 yuan.
Based on the average daily reception of 10 customers, the ratio of high-grade, middle-grade and low-grade is 1: 6: 3. High-end glasses price 1200 yuan/pair, raw material cost 180+300=480 yuan; The price of mid-range glasses is calculated according to the average 450 yuan per pair, and the cost of raw materials is 25+45=70 yuan; The price of low-grade glasses is calculated on average per pair 150 yuan, and the cost of raw materials is 15+ 10=25 yuan. After deducting the cost of raw materials, the daily gross profit of this store is:
1200-480+(450-70) × 6+(150-25) × 3 = 3275 yuan
After deducting daily expenses and taxes, its daily average net profit is 906 yuan. Its average net profit margin is around 30%!
Then the glasses industry should be a high-profit industry. Of course, it is not like the profiteering or industry profiteering reported by many media. Although the profit of the glasses industry is high, there are still a large part of technical costs and risks. Because the technical factors and investment risks between optometry and lens processing are not easy to measure with funds.
Fourth, the industry development trend
Parity will become inevitable and the old format will be broken.
At present, there have been "glasses supermarkets" and "100-yuan optical shops". Guangzhou "glasses through train" avoids the strange circle of optical shops, hangs its own big signboard downstairs in the same busy section, and climbs a steep and narrow staircase. The second to fourth floors are spacious optical shops, and rows of shelves replace the counters. Compared with most Guangzhou glasses chain stores, the decoration is worse, and the price of glasses frames is mainly from tens to 1200 yuan. The two "Hundred Yuan Glasses" stores in Shanghai are located in remote areas, and the monthly rent of1000 square meters is only 10000 yuan.
Of course, the emergence of new formats will inevitably have obstacles. The sales format of Laowangpu Wangdian has caused' three-point glasses, seven-point expenses', and its own price has not come down, which has also hindered the emergence of new formats. In fact, there is an industry monopoly formed in price alliance everywhere, and new entrants are often squeezed.
The innovative way of cheap glasses stores in Shanghai and Guangzhou is to reduce the store rent. This is the weakness of the business model of "Wangpu Wang Zu" chain store.
The difference between "glasses through train" and "hundred-yuan glasses" is that it is as lively and beautifully decorated as those big glasses chain stores. You can still sell high-end glasses, but the price can be much cheaper than Dalian lock store. It also broke the practice that glasses chain stores rarely advertise, and actually invested 6.5438+0.6 million yuan in advertising fees after opening for more than a month. In the eyes of ordinary consumers, "glasses through train" seems to be becoming a new optical shop giant.
The old format of the glasses industry gives consumers few choices, which is not commensurate with China's status as a world glasses factory. What "glasses supermarket" and "100-yuan optical shop" are doing now is to break the vicious circle of dilapidated format.
Su Yong, director of the Department of Enterprise Management, School of Enterprise Management, Fudan University, believes that the monopoly of the optical industry will eventually collapse, and famous shops will definitely give in. Now, there are "100-yuan glasses counters" in some optical shops in Shanghai, and it is probably no coincidence that a large number of discount advertisements have appeared in some well-known optical shops recently.
Competition will lead to the emergence of new business models, and the old business models will eventually be eliminated by competition.