The profit of LED display contractor is as thin as a cicada! How to deal with the embarrassing situation?
With the continuous innovation and maturity of LED display technology, it has gradually entered the digital display era. The display industry has a very broad prospect and unlimited market opportunities. At the same time, competition in the domestic LED display industry has become increasingly fierce, and many companies have begun to look for new development directions in order to occupy a place in the future market competition. Under the background of this kind of industry development, engineering companies are also in an awkward position. Particularly recently, the impact of wholesale channels has further squeezed the survival value of engineering companies. Profit margins have also become smaller and smaller, and collection of payments has become more and more difficult. This is also a very serious practical problem faced by every engineering company.
Manufacturing is in a difficult situation Contractors are struggling
A few days ago, according to a report released by a research institute, the average wage in China’s manufacturing industry has exceeded that of the major Latin American countries except Chile, and has reached about 70% of the level of certain Eurozone member states. This is a positive for China’s economic development. Feedback is also an intuitive manifestation of the substantial increase in labor costs in the manufacturing industry. With the intensified industry competition in 2017, under the influence of the "price cut tide" and the obvious trend of industry reshuffle, corporate profits have been further reduced. Both labor, raw materials and business operating costs have risen sharply. Therefore, the cost issue has become a problem that many small and medium-sized enterprises LED display screens are troubled by.
Nowadays, LED displays are sold in various ways. Among them, there are various forms such as retail, channel business, and LED display engineering business. It can be seen that engineering contractors are also one of the huge groups that cannot be ignored. As an important media carrier that integrates various functions such as advertising, commercial display, and entertainment interaction, LED display screens are gradually improving and perfecting their publicity functions. At present, in the current competitive market environment, although the visual effect of LED display screens is getting better and better, it is frequently exposed that the quality is getting worse. In order to obtain greater profits, some manufacturers and engineering companies continuously improve and replace electronic raw materials and accessories, which greatly shortens the service life and increases the failure rate. As a result, users are less and less likely to choose and use LED displays. Don't worry, there is a lack of trust in the product. Therefore, it is more difficult for manufacturers and engineers to do business.
Intensified industry competition The cost of profit is as thin as a cicada
There must be cause and effect, and the situation mentioned above may not be "undergrounded". As far as the current development situation is concerned, the cost price of the LED display manufacturing industry has basically become transparent. At the same time, Party A also has the right to compare product quality, service quality and price with respect to the market, which, to a certain extent, poses a threat of lowering prices to engineering companies. In the production process, the engineering company also faces the pressure of survival, and has to reduce the profit due to it. If the project company wants to stabilize the project at this time, only to further reduce the cost, basically only give up profit or even lose money.
In fact, there is an interdependent relationship between engineering companies and manufacturers in market activities. However, nowadays, more and more manufacturers directly participate in the project, especially the entry of large companies. With the help of strong contacts and market operation methods, the situation of engineering companies is becoming more and more difficult. In some large-scale projects, the owner will conduct a lot of market research on the equipment and performance used. In this way, the brands selected by the engineering company are limited, and the right to speak is less and less. In order to get the project, the manufacturer usually makes a unified quotation to the contractors participating in the project. It is not difficult to see from this that the project contractor and the manufacturer are actually a loose community of interests.
The relationship between engineering contractors and manufacturers is delicate peaceful coexistence and common development
In addition, with the rapid advancement of the digital age, engineering companies are facing a strange phenomenon, that is, the selected software platform and equipment supplier more or less restrict their own development. In other words, in order to prioritize the sale of their own equipment, platform vendors often impose some restrictions on the software, or can only extend new features on their product lines. In this way, if the owner puts forward new functional requirements, the engineering contractor usually can only screen among the new functions and new equipment developed by the original platform supplier. In the end, there are usually only one or two manufacturers' equipment in the entire system. This relationship can be maintained in a short time, but from a long-term perspective, if the manufacturer's technical capabilities are not updated in time or the service is not in place, the three parties of the owner, project contractor, and manufacturer will have conflicts due to inconsistent interests.
Therefore, both engineering companies and manufacturers are constantly looking for new ways of cooperation. In order to gain more benefits and autonomy, relatively capable engineering companies are usually ready or already in their own production and development of products . In addition, the contractor also needs to cooperate with the manufacturer in an orderly manner, especially in terms of product quality, because the contractor must link up each qualified product to Party A during construction, and must be excellent in the quality of the product itself, so as not to Various problems such as wiring, linking, debugging, etc. appear in the middle or after-sales. Now the engineering acceptance standards are more stringent. If there is a slight negligence or unqualified place, Party A will single out the fault. On the one hand, it affects the progress of project acceptance, on the other hand, it also affects the return of project funds. The direct economic loss to the contractor is relatively large.
To sum up, as an important part of the entire industry chain, engineering companies are not only limited to the single technology and product of LED display, but also broaden their horizons, innovative thinking, and focus on display solutions. supplier. Actively absorb various advantages and competitive display technologies, such as LCD, DLP, projection, OLED, etc., to meet the various display needs of customers. For local engineering companies, any product, in addition to the product itself, has an increasing proportion of after-sales service. An industry with better services is bound to bring a steady stream of vitality to the enterprise, and it is also conducive to the handling of customer problems. Therefore, enhancing the level of after-sales service is also one of the factors that cannot be ignored by engineering companies.
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