What's wrong with me being a rich man?

Chapter 144: End and Dawn

Li Jing was persuaded to come back.

But Yu Xing really didn't discriminate against people and still wanted to talk about the topic of vertical e-commerce. He was not here to chase stars, and he neither wanted nor needed to see this person's face.

Similarly, Bi Sheng of LeTao.com also found this kind of topic discussion very interesting.

So, during the recording session, Li Jing just watched coldly, while several other bosses talked about vertical e-commerce, but did not touch on the matter of Lefeng.com.

Yu Xing thinks that the interesting thing about the topic of vertical e-commerce is that almost all of these vertical e-commerce companies have died, with only Vipshop surviving.

Compared with Lefeng.com which focuses on the marketing of TV programs, there is a company whose choice is actually quite different from it. That is Jumei Youpin, which also originally appeared on the program "If You Are the One".

Chen Ou, the founder of Jumei Youpin, became famous with the advertisement "I am my own spokesperson" and used the Internet to achieve a large amount of dissemination. He also continued to participate in various programs and became a generation of Internet celebrity.

As an e-commerce company, Jumei's marketing is obviously more in line with the Internet, which led to greater success for a period of time and eventually its listing on the New York Stock Exchange.

When Yu Xing talked about the marketing of Lefeng.com, his original intention was not to make Li Jing give up the offline program, but to promote it through multiple channels. The two are not mutually exclusive. As for the words like "be responsible for the investors' money" and "Internet advertising is expensive"...

He wasn't sure whether this person was doing it on purpose or was sincere.

The discussion about Lefeng.com did not continue. While listening to the thoughts of several bosses, Yu Xing was pondering the ups and downs of e-commerce in his mind.

In fact, the competitive landscape of domestic e-commerce platforms will soon form a duopoly, with Penguin joining forces with JD.com and Alibaba joining hands with Suning. At that time, it is generally believed that the overall situation of this market has been determined and there will be no new variables.

However, from Pinduoduo to Douyin and Kuaishou's live streaming e-commerce, the domestic e-commerce market has almost changed dramatically in just a few years, and the process is as exciting as the formation of a duopoly.

The market that seemed solid at first surprised countless people, and there is still a unique vertical e-commerce company here.

Yu Xing felt that Vipshop not only survived but was able to develop, which was very worth pondering.

Bai Xiaosheng himself is practicing the vertical segmentation project route, and then he pushes it aside. So where should these people who are engaged in vertical segmentation in the e-commerce field start to get through the difficulties?
Bi Sheng of LeTao.com is still talking about his ideas: "I got the idea of ​​starting a business last year from the investor Lei Jun. He asked me to sell toys. I didn't have any ideas at the time, so I just wanted to sell toys!"

"We have been selling toys for several months and are close to breaking even. However, I discovered a problem: toys are too restrictive."

"Although our online toys are cheap, the children's money comes from their parents. Most parents in China prefer to spend money to enroll their children in cram schools. This bottleneck is too big!"

"But shoes are different. Amazon is negotiating with Zappos, a shoe vertical website, to acquire it. This is definitely a deal worth hundreds of millions of dollars. Amazon also thinks this direction is valuable!"

"Shoes are easy to standardize, and the pressure on warehousing and logistics will be low. Moreover, we are engaged in consignment sales, so the funds and inventory pressure will be better than purchasing!"

Bi Sheng was passionate and confident.

This confidence comes more from the current situation. The testing of shoes exceeded that of toys in the first week, which is simply a smooth road.

After hearing this, Yu Xing wanted to speak but hesitated a little.

The host Zhang Shaogang read this performance in time and said with a smile: "I think Mr. Yu has something to say."

Yu Xing picked up the microphone and put it down again, but finally picked it up again: "I'm afraid Mr. Bi won't record it either."

The whole place was filled with laughter.

Li Jing wanted to get angry but held back. She had already realized that her celebrity halo had no effect on the young entrepreneur.

Bi Sheng then said: "Please speak, Mr. Yu. You are allowed to be sharp."

Yu Xing felt that this label was a bit difficult to get rid of, but he didn't care. He pondered and said, "Mr. Bi said that he sells shoes and that shoes are easy to standardize. This is in contrast to the toys he sold before. But if we put shoes in the entire e-commerce market, we can see that, for example, clothing products with a wider audience also have strong non-standard attributes."

As the names suggest, "non-standard products" and "standard products" have great differences in specifications, styles and quality, while the latter have unified standards.

Yu Xing moved the shoes in a circle and continued, "Strong standard attributes mean a higher reliance on brands. I think everyone should understand this."

Bi Sheng thought about it twice, frowned, and confirmed this statement: "Yes."

"Products with big brands naturally have to ensure more profits for themselves, so they are unlikely to give you a large share." Yu Xing's thoughts gradually became clear. "Also, Mr. Bi, we can't just focus on vertical segmentation. There is a key issue. Comprehensive e-commerce platforms like Taobao and JD.com have also begun to extend their tentacles into segmented categories. What advantages do you still have?"

Bi Sheng said without hesitation: "I am faster than it, I can accumulate more segmented users than it, and I can establish a brand tone for professional shoe sales."

"Take shoes for example. Users' favorite brands are Nike, Adidas, Li Ning... They won't give them to you exclusively. Large platforms may be able to offer more discounts. Integrated platforms have more traffic. With so much traffic and discounts coming to you, do you still have any so-called advantages?" Yu Xing continued to ask.

Bi Sheng sneered: "According to what you said, vertical e-commerce will die, so there is no need to do it."

Yu Xing spread his hands, looking as if what you said made sense.

Bi Sheng suddenly swallowed unconsciously and slowed down his voice: "So what do you have to say?"

"I think we can do some calculations, and also do some calculations for friends who are doing vertical e-commerce." Yu Xing said calmly, "Let's dissect a vertical e-commerce company."

Before Bi Sheng had the chance to ask how to perform an autopsy, he heard the question raised by Yu Xing.

"Mr. Bi, vertical e-commerce companies have roughly these cost categories: logistics, warehousing, return logistics, customer service, technology, management, promotion, and packaging." Yu Xing stretched out his hand and listed them one by one.

He thought for a moment and held up his ninth finger: "Oh, there should be a collection fee. How much is the total cost of all these? That is, if you sell 100 million pairs of shoes, how much does it cost for logistics? How much does it cost for warehousing? How much does it cost for customer service, technology, etc. to handle these 100 million pairs of goods?"

If you are not the boss, you will know all these things.

At the very least, Bi Sheng couldn't give an answer immediately, but he didn't feel embarrassed and just took out his phone and called his colleague.

The recording of the show has been temporarily slowed down, and there are audience members in the audience who are guessing and trying to calculate.

Yu Xing glanced at him, and Li Jing on the other side had her eyes wide open, probably calculating in her mind as well.

He does not need a particularly precise value; fluctuations up or down are all within an acceptable range.

While Bi Sheng was on the phone, he simply asked the program team for a pen and paper, and then added up the items one by one. Logistics should account for 10%, reverse logistics for returns should be about 3%, warehousing should account for 10%, technology and customer service together should account for 5%, management should account for 10%, marketing should account for 10%, collection fees should account for 2%, and packaging should account for 1%.

These add up to 51%.

Bi Sheng checked the calculation twice, realized something, and began to sweat.

He looked at the number, was silent for a while, and reported: "It's about 51% on my side."

In other words, if the company sells 100 million pieces of goods, the overall cost is about 51.

Yu Xing was also surprised when he heard this. Your death is reasonable.

He leaned forward, looking for Li Jing's gaze.

Although there had been some minor unpleasantness between the two before, Li Jing gave him a similar look at this moment.

Yu Xing asked again: "Are you sure it's this number? Are you sure it's this high?"

Bi Sheng made a gesture, redialed the number, and verified the authenticity of the number again.

This time the speed is very fast.

Bi Sheng said: "On average, it may be reduced to 45%."

Yu Xing felt a little pitiful when he heard his tone, so he said decisively: "Okay, even if it's 45%, can you achieve a gross profit of 45% from selling shoes?"

To sell a pair of shoes worth 100 million, LeTao.com needs to pay a cost of 45. If it can make a profit of 100 on this batch of shoes, it can ensure the profit and loss balance of the entire company.

The problem is that standard shoes rely on brands. How much can the brands leave for online channels like Letao?

Bi Sheng thought hard for a moment and said, "If we expand our scale, we will have the opportunity to reduce costs."

"Mr. Bi, I don't mean to discourage you, but let's not talk about shoes. Looking at the entire e-commerce market, there are probably very few categories with a gross profit margin of more than 45%." Yu Xing reminded, "Competition in e-commerce will inevitably become more and more fierce, and the current gross profit margin must be greatly adjusted downward." He added: "If you can expand your scale, can't those platforms that are already large in scale expand?"

Cai Dabiao, who was really good at attacking his husband, objected at this time: "Mr. Yu is exaggerating. Expanding scale, occupying the market, and building brands are the moats of vertical e-commerce."

Yu Xing bluntly said: "These are all false moats! In the final analysis, the profits of subdivided categories are limited and cannot be balanced through other categories. What you said is also done by large platforms."

He continued, "Big platforms will develop both horizontally and vertically, there is no doubt about that, right? Who would leave the market unused? Looking at the products in the entire market now, women's clothing and makeup must have good gross profit margins, but they will also go through tests. Again, they can do it."

During the time Bi Sheng had been saying these few words, he had already been swallowing his saliva unconsciously.

We can talk about moats, brands, scale, and users, but putting these things aside, the most essential formula of “revenue-cost” is too simple and clear!

Just like, just like...

Bi Sheng suddenly remembered what Yu Xing had said before, "Dissection"!
——Let’s dissect a vertical e-commerce company.

The gross profit cannot cover the operating costs, and there is pressure from big platforms above. What other way out is there?
Competition will inevitably become more and more fierce, and product profits will inevitably become lower and lower. According to this forecast, the loss gap will further increase.

After hearing this, Li Jing couldn't help but say, "Competition exists everywhere. As long as we run fast enough, we will definitely be able to win in the end."

Yu Xing laughed and said, "What you mean by 'fast' is to compare the speed of TV programs with the Internet?"

It sounds good, but it is deformed when actually doing it.

Bi Sheng frowned, his heart on the verge of breaking, and he slowly said: "According to what you said, the death of vertical e-commerce is inevitable. Even the road of vertical segmentation is not feasible at all, even your Bai Xiaosheng is the same."

The principles are common, and the development trend of large platforms follows the same logic.

Everyone present stared at Yu Xing, wanting to hear his explanation.

Yu Xing said easily: "Vertical e-commerce and vertical segmentation are two different things. Bai Xiaosheng's workplace platform has different attributes. The giants all have their own positions, so they can't do what I do."

Bi Sheng was confused, and then he slapped his thigh: "Damn!"

He understood the subtlety here.

Damn, it’s the essence!

Yu Xing glanced at Bi Sheng with a smile, and he didn't think there was anything wrong in talking about this after Bai Xiaosheng had accumulated its current advantageous user base. On the contrary, he felt that the more he promoted this attribute now, the more trust he would gain from everyone.

Li Shanyou from Ku6.com next to him thought about the topic and returned to e-commerce: "Vertical e-commerce is different. Large platforms don't have any position restrictions or anything like that. Competition seems destined to be comprehensive. If you follow this logic, the future of vertical e-commerce is really not good."

Calculating the cost, sorting out the logic, and looking at the development, the future of vertical e-commerce is simply dark.

The size and speed of large platforms will only increase faster.

Yu Xing pondered and considered: "So, I think, well, this is my personal opinion..."

Bi Sheng urged: "Don't keep us in suspense!"

"I think LeTao.com has no future." Yu Xing did not keep anyone in suspense.

Bi Sheng stood up all of a sudden, and it was a mess!
Yu Xing coughed and said, "My personal opinion is that we should correct our thinking on vertical segmentation. The self-imposed limitation of selling specific products to specific user groups like LeTao and LeFeng is worth discussing."

“Drawing a circle like this and then declaring the self-victory of vertical segmentation will eventually be drowned by the development torrent of giants.”

"To truly survive, vertical e-commerce companies need to dig deep into models that are different from comprehensive platforms to do integrated retail."

What is vertical is the model, not the segmented products.

For example, the essence of Vipshop is the special sale model, which provides brand discounts, limited-time purchases and authentic product guarantees.

It originally sold leftover goods, providing value on both the supply and demand sides. Merchants handled inventory to save warehousing and management costs, while users got high-quality products at preferential prices.

But this alone is not enough to survive in the hell mode of e-commerce. The key is the supply chain turnover system built around the special sale model, which provides excellent supply of brand, style and fast turnover.

Bi Sheng stared at Yu Xing, his mind seemed to have gained something, yet he also felt confused.

Li Jing shook her head slightly, thinking it was too theoretical.

"Boss, are you done talking?" The host saw that the situation had calmed down and estimated that this part would not be edited in, so he smiled and said, "Are we still hiring?"

Yu Xing quickly said, "Yes, yes, sorry, we are just chatting casually."

He turned off the light and continued to wait for the elite he needed.

The process was restarted, however, the two vertical e-commerce bosses were in the same mood of being heavy-hearted, and even other bosses felt the murderous aura of the giants.

How can the giants stop at the e-commerce market?
The recording of the second episode ended in a slightly depressing atmosphere.

Yu Xing still did not stay to say hello, but before he could get on his electric bike, he was stopped by producer Xu Rongxian who had hurriedly chased after him.

"Hey, Mr. Yu, Mr. Yu." Xu Rongxian came closer and announced a message, "Bi Sheng and Li Jing are not recording..."

Yu Xing said, "Uh," "Blame me?"

"Don't blame you, blame me?" Xu Rongxuan said helplessly, "I have to cut your part."

"Hey, don't cut it, this is really useful information." Yu Xing shook his head and said, "If I hadn't sponsored the program, I wouldn't talk about this."

Xu Rongxuan said angrily: "Dry stuff, dry stuff, you are going to kill all the guests on the show, what else are you doing?"

Yu Xing thought for a moment and said, "I've said before that a program with some forum-like communication would be more vital and make many people think. Director Xu, really, please support it."

Xu Rongxuan smiled and said, "You have a good heart. When doing a show, we need to see the results."

"Director Xu, you misunderstood me." Yu Xing said seriously, "How about this, don't cut it. I'll reveal something that will definitely be a hot topic in the show later."

Xu Rongxuan asked: "What is it?"

Yu Xing shook his head: "I can't tell you now."

Xu Rongxuan was suspicious, thinking that the sponsor was trying to trick him, but suddenly he noticed the solemnity in his eyes and felt that he must have not misunderstood him, so he asked tentatively, "Is there any news on your website?"

Yu Xing laughed and said, "Otherwise, why would we name ourselves Bai Xiaosheng? Bai Xiaosheng, Bai Xiaosheng, go find out the news."

Xu Rongxuan's mind was full of thoughts, and he quickly made a decision: "Okay, that's it, the subsequent recordings have to wait until the schedule is finalized. I'll edit two episodes first to show the results to the station, there shouldn't be any problem."

He thought for a few seconds and then said, "Do you have any key points in this paragraph? The useful information should also be spread as much as possible."

"Isn't it enough that the two vertical e-commerce bosses' hearts are broken?" Yu Xing made a joke.

Xu Rongxian was helpless. It was rare that three guests left in two episodes.

Yu Xing lowered his head and thought, “The future of vertical e-commerce is dark. But please do not go gentle into that good night.”

Xu Rongxuan understood for a while and said with a smile: "You want them to die standing."

Yu Xing nodded: "I also want to make a price comparison tool for e-commerce products. This way I can die faster."

Xu Rongxuan was stunned for a moment and commented: "You have a really good heart..."

(End of this chapter)