The fever in the fat market "does not subside"; manufacturers' irrational pursuit of profit is equivalent to self-harm!
2021-07-14
Recently
The fertilizer market is "running wild like a runaway horse"
In the face of skyrocketing fertilizer prices
This year's summer and autumn fertilizer market operations
Will be a direct test of manufacturers' wisdom and cooperation
Compared to the same period in history, this year's fertilizer price increase is large and fierce, both upstream factories and downstream distributors are caught off guard, especially frontline market personnel feel particularly unprepared. In the face of this abnormal situation, fertilizer production enterprises and distributors are seeking countermeasures, but in a state of panic, they often neglect one aspect while focusing on another, leading to chaos, which not only does not help solve the problem but also exacerbates conflicts between manufacturers and market games.
At the distributor level, in the face of soaring fertilizer prices, some brand agents, in order to survive, no longer exclusively represent their original brands, but instead operate cheaper brands or concept fertilizers, and some even consider dealing in inferior fertilizers. Although this is a self-rescue behavior forced by market pressure, it is not a good thing for manufacturers when distributors are disorganized during the most difficult times.
At the level of fertilizer production enterprises, some companies' response measures are also worth discussing. One type is "ruthless for the rich," which means irrational price increases; or in order to compete for the market, manufacturers of different brands engage in price wars, and vicious price competition often has no winners. Meanwhile, in the face of aggressive promotional offensives from competitors, distributors of the same manufacturer sometimes do not unite against external threats, but instead compete to lower prices and harm each other, resulting in mutual losses.
In recent years, agricultural input operations have been difficult, and the significant market fluctuations have further increased the difficulty of market operations. As land becomes more concentrated and large-scale farmers increase, agricultural input distributors face greater challenges in acquiring and maintaining customers, rising costs, and squeezing their profit margins. At the same time, we have entered an era of highly developed information technology, where prices are publicly transparent online, and the convenience and richness of choices have greatly increased, putting traditional agricultural input distributors in a difficult position.
In summary, the major trend of the times is putting agricultural input distributors in a passive position, and this year's abnormal market fluctuations highlight the weak awareness of cooperation between manufacturers and agricultural input distributors. The combination of various factors determines that this year's summer and autumn market will be a severe test for the industry.
For national food security and healthy industry development, the industry looks forward to a proactive government and an effective market. The fertilizer market is greatly affected by the macroeconomic situation; to cool down the overheated fertilizer market, it requires active guidance and regulation from the government and industry authorities. I hope that leaders of industry authorities and journalists will conduct on-site investigations to grasp first-hand market data, understand fertilizer raw material inventories and market demand, objectively and accurately release fertilizer prices and trends, and timely introduce relevant policies and regulations to stop disorderly price increases, combat price gouging, and ensure that agriculture and farmers have access to affordable fertilizers.
From an internal industry perspective, during difficult times, production enterprises and distributors should unite to weather the storm, abandon the narrow thinking of zero-sum games, and both manufacturers and distributors should share more and take on more responsibilities to achieve mutual benefit and win-win outcomes.
What is first needed is honesty and cooperation. Manufacturers and merchants should engage in face-to-face communication and discussion on fertilizer sales policies, form supply and marketing alliances, and become a community of shared interests to enhance their ability to resist risks, truly achieve mutual benefit and win-win, and lay a solid foundation for better cooperation between both parties.
Most importantly, manufacturers must completely abandon the desire for speculation and high profit returns. On one hand, during the summer and autumn, manufacturers should act as the main body of market regulation, introducing a series of risk prevention policies and proactive measures, guiding distributors to make timely payments and purchases when conditions are right, to avoid missing business opportunities, affecting sales, and losing customers and ground; on the other hand, manufacturers should rationally analyze the market, stabilize production, reduce costs and increase efficiency, with the strategy of minimizing losses and maximizing gains.
Secondly, in addition to improving management levels, accelerating structural adjustments and product upgrades, and honing internal skills, manufacturers should also develop economical, affordable, and high-quality new fertilizers, actively respond to market changes, and operate cautiously in the summer and autumn business.
Manufacturers seek profit, and merchants pursue profit, which is understandable, but if they are too utilitarian and too opportunistic, they will have a short-sighted vision and lose big for small gains. Mutual tearing between manufacturers will only harm both sides; instead of each going their own way and fighting alone, why not change the perspective to turn competition into cooperation, share resources, seek common development, and unite to face new challenges.
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