What are the causes leading to the decrease in profit margin? by Andrew Chow

Consumer now a day more IT savvy, hence always comparing price online & offline. Challenging for offline dealer as they have high operation cost and they will seek better support from supplier like us.

2024-02-27 07:07:23 UTC

2024-02-27 07:08:44 UTC

Marketing do promotion in good segments rather focus on Axor and Best segments

For developed markets, more and more mandatory requirements are being implemented. In order to be able to continue selling, more and more cost involved in testing to comply with local regulation.

2024-02-27 07:09:16 UTC

Consumer request higher quality service.

2024-02-27 07:09:19 UTC

2024-02-27 07:09:57 UTC

Focus on old product segments rather than new novelties with expected higher margin

Supply Chain Disruptions

2024-02-27 07:09:58 UTC

Increase in freight cost due to disruption of war, covid situation etc

Beside testing cost, more human resource involved for handling all this testing. Forcing sales people to cover this role even their core job scope is supposed to carry sales activity.

2024-02-27 07:10:48 UTC

Some newer products have higher amortisation costs and lower economies of scale

2024-02-27 07:10:53 UTC

Supply Chain Disruptions

2024-02-27 07:11:04 UTC

Shortage of material

2024-02-27 07:11:24 UTC

Competitors always follow our products and do not invest in their R&D.

2024-02-27 07:11:35 UTC

Sales promotion with high discount.

2024-02-27 07:12:03 UTC

Work overload is not efficient for both operational procedures and labor costs.

Supply Chain Disruptions

2024-02-27 07:12:25 UTC

Production Delay due to shortage of labor

In order to survive, we need to give better discount to our offline dealer to compete with our own products online, this has impacted our margin.

2024-02-27 07:12:29 UTC

Material and energy costs have gone up in plants

2024-02-27 07:12:30 UTC

Manpower for label stickers.

2024-02-27 07:13:30 UTC

Supply Chain Disruptions

2024-02-27 07:13:50 UTC

Supplier factory closed down

2024-02-27 07:14:06 UTC

Less and less high-end projects in the market.

2024-02-27 07:14:52 UTC

Lack in communication and planning of stock urgency and caused freight arrangement from sea to Air freight. High logistics costing.

Chinese manufacturers are quick to copy technology and designs, leading to similar looking products with the same features that compete with the original products.

2024-02-27 07:14:57 UTC

Water saving is not just the trend but it has gradually became the requirement of GP, which means more customization is required which bring up the production cost and reduce our competitivess.

2024-02-27 07:15:40 UTC

2024-02-27 07:15:43 UTC

Pricing released and committed to dealers before we confirm the new list price.

Due to more and more new rulles and regulation, the number of product available for us to sell is getting lesser, thus items with low cost might not be able to sell whereas only items with high costing are available.

2024-02-27 07:16:54 UTC

2024-02-27 07:17:06 UTC

Production process flow not optimize resulting to higher cost
Last minute order place result to higher operating costs

2024-02-27 07:17:07 UTC

Many special request need attention but lack of manpower to cover.

2024-02-27 07:17:07 UTC

Reduce paper works, such as printing etc...

Higher compliance costs - increasing requirements for sustainability and environmental protection .

2024-02-27 07:17:08 UTC

2024-02-27 07:17:14 UTC

Additional rebates given to dealers to achieve their annual target sales.

Whether buying online or offline, customer expected to have after sales service whenever they complaint. This has incurred more cost and time from local team to settle the issue.

2024-02-27 07:17:47 UTC

consumers have more choices for price comparison hence price has become more competitive

2024-02-27 07:20:56 UTC

rising overheads cost

2024-02-27 07:22:13 UTC