"The Way of Heaven" - Why do we insist on selling speakers when the net profit margin is so low?
Feng Shijie asked: "Brother Ding, how much profit do we have left?"
Ding Yuanying replied: "A pair of speakers makes 110 yuan, and there is still 3.2% profit left."
Feng Shijie asked: "3.2% profit is not as high as the bank's interest rate. How can this business continue in the future?"
Ding Yuanying said: "The bank has an annual interest rate, and the company's capital efficiency depends not only on the profit rate, but also on the frequency of capital turnover. Even if the company has zero profit on the speakers at present, as long as the farmers in Wangmiao Village earn the processing fee, it is meaningful. The fact is that the sound rack supports the company. In order for the speakers to make money in the future, a gap must be made now."
Ye Xiaoming asked: "Why do you do this? What is the purpose?"
Ding Yuanying replied: If you don't do this, the speakers can't be sold, which is not enough to show the low cost and high quality of the Ge Lushi speakers. If it doesn't drop to this level, it won't be enough to sell out, and if it doesn't sell out, it won't be enough to become a trend.
Maybe many things are like this. If we only calculate it based on the input-output ratio and profit return, it will not work.
In addition to financial thinking, we also need to have insight into social relationships, consider cash flow, etc.
If we only look at money, many things will really not work.
