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I have been cultivating in the LED industry for many years, and I have been stunned by my eyes. This is not a high-profile person, of course, some words do not feel unpleasant. So open this column, and discuss the LED rivers and lakes with Jun.
LED price increase paradox
As soon as the price increases, the circle of friends will culminate.
The rising water is not suitable for every industry. At least the LED seems to be irrelevant.
As early as half a month ago, my friend circle began to madly spread the prices of various raw materials. What aluminum, copper, gold, silver, paper boxes, plastics, glass, etc. are all rising, many people in the LED industry are hard to hide. Helplessness: LED will not go up!
"I will not go up", in my impression LEDer should be clear but do not want to admit: no!
Is it really? Let's analyze it down.
Let's first look at the reasons for the price increase of a commodity:
1) coping with rising costs;
2) The supply of products is in short supply;
3) Inflation, currency depreciation, so that the price of the product is lower than its value, the operator will have to raise the price to make up for the loss caused by the depreciation;
4) The product function is increased, the competitiveness is enhanced, and the operator can raise the price;
5) Maintaining competitiveness. In the fierce competition, consumers often use price as the basis for evaluating the quality of products in the absence of sufficient professional knowledge. At this time, maintaining high prices can improve competitiveness.
If the LED is going to increase in price, at present, only the first condition is met. Maybe someone would say that the chip is not in short supply? This question can add me to WeChat, I will talk to you privately to tell you the real reason.
This time, the price increase of metal raw materials is not the LED sales are too good, but the metal raw materials are stimulated by the large demand of the lithium battery industry, which further reduces the profit margin of LED. From this point of view, LED is passive, which is undoubtedly worse for the industry chain where the original profit is very thin.
On the other hand, although gold, silver, copper, aluminum and other raw materials have generally risen in price, wafers such as Jingyuan and Sanan are also rising in price, but there is still pressure on the price of finished lamps, which determines the package of the middle reaches. The price is even harder. As the price of raw materials rises, it is already compressing its own profits for packaging companies to maintain “no price cutsâ€.
At this time, there will be people who are not big but still claim to be “leading enterprises in high-power packagingâ€. They are still selling products below cost. If they are not cutting corners, they are not huge-scale production, not technical breakthroughs, that is, holding suppliers. Even 8 or 9 months of payment comes to "loss operation"?
Could it be that the "leader" is in overdraft consumption? With the money of the supplier to quickly cash out? Going to some governments in the Mainland to "fudge money"? Think about it and shudder. This reminds me of what Fei Ge once said, "Get out of the mix, and come back sooner or later."
Xie Peng has also been involved in these years in the industry, and has helped many companies to do strategic planning, but still did not understand how companies that sell products below cost should operate. Will this be the highlight of the next packaging industry?
I don't know. If it happens like what I am worried about, it really hurts us to be friends of the packaging suppliers. No way, born to be a life-threatening life, now it is a sweat for everyone.
Although friends around me said that it is too difficult to raise prices, but as far as I know, a new packaging company listed in Shenzhen has been raised by 5%-10%, and more companies are already eager to try.
Encapsulators who think that the price increase is too difficult may be worth considering. In the face of such a dilemma, whether they can understand the 72-like changes like the "old grandson" and know the gods (not to mention the rising prices of the old grandchildren). Or, with the high reputation of "old Liu", have a group of brothers such as Zhang Fei, Guan Yu, Zhao Zilong and so on?
Out of the world. It is often the case that some great strategists such as Roosevelt, Stalin, Churchill, etc. can be produced during the World War. So it is not a good thing for some companies in the LED world.
Of course, the “some†companies I refer to mean that for large companies that focus on quality and scale, they can use large-scale and capital leverage to make the industry's accounting period more benign and rational.
Closer to home, this round of raw materials rose, so that the package of price hikes came early.
After all, I think that adding features, maintaining reasonable profits, and removing false demand should be the starting point for price increases.
In my opinion, only the price increase, breaking the vicious cycle of low prices, and returning to the rational price, the LED era is likely to come. Here, I appeal to all lighting companies not to "compromise" and "being coerced" and take the initiative to increase the price of your customers. The LED rivers and lakes are still more crowded. After all, the lips are cold, after all, the supplier is the one who will live and die if you don’t leave.
By the way, remind the suppliers friends, in an extraordinary period, we must understand the customer strategy, rationally treat the account period, avoid cutting constantly, and still chaos.
Finally, launch a river and lake call for you. The 10th anniversary of the senior engineer from January 5th to January 6th, 2017. Ten years old, return to the original point. We sincerely invite heroes from all walks of life to come to Shenzhen to discuss swords.
In the future, I will share with you every week the things in the LED industry. If you are interested, you can also post a message below or add me a WeChat to share what you want to know and what you are interested in. If I was taken by the LED Jianghu Xie's Bai Xiaosheng column, I will cover you with a private letter.
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