Fast Fashion Clothing Brands Such As Meibang Fall Into The Dilemma Of Big Agent Mode

The so-called big agent model means that a large agent holds the agency right of a brand in one province or several provinces. It is understood that at present, more than 90% of fashion clothing brands in China adopt the mode of large agents to expand their channels. At the beginning of the establishment of clothing brands, the big agent model opened up the market for them, and the rapid development saved a lot of time and labor costs.

However, the disadvantages of this model are also increasingly apparent: large agents are divided into different areas, resulting in product price confusion and unequal policies among dealers in the region, which makes the sustainable development of fast fashion brands in trouble.

Domestic fast fashion The brand is falling into the dilemma brought by the big agent model

The so-called big agent model means that a large agent holds the agency right of a brand in one province or several provinces. It is understood that at present, more than 90% of fashion brands in China adopt the mode of big agents to expand their channels. At the beginning of the establishment of the brand, the big agent model opened up the market for the brand, and the rapid development saved a lot of time and labor costs. However, the disadvantages of this model are also increasingly apparent: large agents are divided into different areas, resulting in product price confusion and unequal policies among dealers in the region, which makes the sustainable development of fast fashion brands in trouble.

August, China Economics It is still in the downward phase. Most regions in China have not ushered in autumn yet, and the new autumn products in shopping malls have begun to enjoy a 20% discount. At the same time, the major clothing brands are also in full swing to clear inventory war.

At this time, brand dealers suddenly understood a truth: big agents can only add to the cake, and can't provide timely help. No matter how to discount, clear inventory or place orders, big agents are more "obedient" than their own direct stores.

Major agents first seek self insurance

In July 2012, China's CPI index is expected to fall below 2%, hitting a 30 month low. Among them, clothing prices rose by about 3% year on year, and clothing prices rose by about 3% year on year.

Such a slow price increase is in sharp contrast to the "rapid growth" of clothing prices two years ago. "Now, many brands are clearing their inventory to recover their cash," a senior person in Metersbonwe told reporters.

Not long ago, the leisure clothing brand Metersbonway revealed a net asset of about 3.2 billion yuan, but half of them were out of season clothes in the warehouse.

In fact, due to the sales decline in the first half of the year, many brands are facing a similar situation. Clothing brands and large agents began to face huge inventory pressure, and a large amount of inventory has obviously hindered the flow of cash.

"Once the inventory appears in the first half of the year, the big agents will take a conservative strategy to reduce orders or cancel orders at the order meeting in the second half of the year." The above-mentioned American people told reporters, "On the one hand, the big agents do not have enough funds in their hands, and on the other hand, the big agents will increase their consideration of risks."

It is understood that at present, more than 90% of fashion brands in China adopt the mode of agents to expand their channels, and the enthusiasm of agents determines the situation of brand dealers in the second half of the year.

The data shows that at the clothing order meeting that ended in May, the order volume of Sima only maintained a single digit growth. Sima Garments released the announcement on the revision of its performance in the Chinese report. It is estimated that in the first six months of 2012, it will achieve a profit of 241 million to 284 million yuan, a year-on-year decrease of 35% to 45%.

The reporter learned that the Sima brand has adopted the agency system since its inception. Through the agency model, the brand is delegated to the agents, and the agent development channels are used, thus saving a lot of time and labor costs for the brand in the initial market development. {page_break}

However, now, when brand owners are in trouble, big agents are also difficult to support. As a big agent of a fashion consumer brand, Liu Bing is currently facing the "torture" of brand dealers. He said: "The headquarters asked us to execute the orders at the beginning of the year, but now the sales are not good, so I can't continue to press for funds."

Excessive delegation of authority increases management difficulty

The friction between big agents and brand names is not only now.

As large agents have obtained very large authority, the agency system has also brought management problems to brand operators. "For the same product, each dealer's price is different, and after-sales service is inconvenient." Liu Bing expressed his confusion to reporters.

For example, if you ask different dealers about the same product, there are multiple prices. Because the dealers get different sales prices from different dealers, it is like a price war between themselves. "Agents will give more discounts to those who have a good relationship with them, and they will get more sales opportunities for major models," said Liu Bing. This practice makes the dealers have unequal rights, thus causing price confusion.

Pan Wenfu, an expert on dealer issues, believes that "when the rights and capabilities of agents become more and more powerful, stores will bully customers, and the management of headquarters will become more difficult, including the price policy, which will be affected by agents."

Different from Sima, Metersbonwe has always promoted a flat sales route, contacted dealers directly, and treated dealers equally. "We treat all dealers equally, and there is no special discount. We don't want to cultivate large agents, which is very bad for us." A senior person of Metersbonway told reporters that they treat dealers as terminal drivers, that is, they constantly launch new products and promotion activities to drive consumption, Instead of giving dealers more preferential terms. Therefore, Metersbonwe has also been able to rapidly develop its own distribution network.

Crushing big agent mode

"Big agents often divide the area and have a great say in the products." The former representative of Canon China once told reporters, "In the promotion activities of products, agents often put this responsibility on the brand, which limits the healthy growth of the brand."

It is understood that there has been a "battle" for IT, digital and other consumer products to integrate channels. The mode of large agents has been canceled, and the mode has been changed to direct marketing, or the channel has been flattened directly. Brands face small agents directly.

For brands, canceling large agents can not only reduce the intermediate links, but also increase more profits. "Agents who feel that they have a good relationship with others will give more discounts and gain more sales opportunities." Li Yu, once an agent of Sima in North China, told reporters. The unequal access of dealers to rights has also led to price chaos.

It may be a wise choice to choose the integration channel at this time point. Pan Wenfu believes that "to cancel agents, manufacturers and dealers need to establish a direct relationship. In the case of increased market demand, it is easier to establish a relationship with each other, because both parties need to be more closely connected."

"If we can seize the opportunity to flatten our channels, we will gain more profits while keeping the terminal price unchanged, that is, the profits originally belonging to the agents will be attributed to the manufacturers." Pan Wenfu said, "No matter what, the channel revolution is a painful process, and we should also prevent possible retaliation by big agents."

However, brand Marketing experts Yang Yeqing also said to the reporter, "The cost of canceling big agents is amazing. It used to be a general with a group of soldiers. Now every soldier has to interact directly with the brand dealer, or every soldier is your own development. How high is the management cost?" He even thought that if it was not handled well, some brands would crush big agents, It may mean the death of the brand.