Sales masters painstakingly managed for 12 years before the global retail giant’s sales rose to 150 million US dollars, while Bezos took Amazon online bookstores into the billion-dollar sales industry in only three years, and the growth rate remains unabated. Today, Amazon has grown from a network company in a simple garage into a large company with a market value of nearly 30 billion U.S. dollars. Its customers are located in five oceans around the world. When Wal-mart expands and builds supermarkets globally, Amazon only needs to rent a few turnaround warehouses to open its online bookstores (now offering CDs, music, and other products) to the rest of the world, regardless of where the users are in the world and at home. Networked computers can select products on their websites without having to carefully select stores, train employees, and spend a lot of fixed manpower and day-to-day running costs around the world.
First of all, it does not need to rent a facade site and hire a large number of salesmen, which can save a lot of management costs. Amazon's market coverage is wide, and each order quantity is large, so it is possible to obtain lower price concessions from suppliers. According to consumer demand orders do not require large inventory for turnover, which saves a lot of storage costs.
Amazon's sales are mainly through attracting consumers to visit websites and then making purchases. Therefore, the sales cost is mainly advertising promotion expenses, which saves a lot of sales personnel expenses in traditional sales.
Receipts and delivery are completed through internet cooperation, which saves a lot of labor. When Amazon’s sales exceeded US$100 million, only 9 employees were employed.
Because of the "virtual" nature of online shopping, Amazon can develop at an alarming rate. At the same time, it can also serve consumers at very discounted prices. Most of the books purchased on Amazon can save 3-5 percent of the money. This is all due to The cost reduction brought by online business brings benefits to both businesses and consumers.
Second, how to use the Internet to reduce management costs
1) The Internet connects different types of computers through open and unified standards, which can maximize the sharing of computer resources and information, and can also realize remote information exchange and communication. All these are the development and use of Internet technologies. result. Many companies have already applied the Internet to enterprise management and have achieved great economic benefits. Using the Internet to reduce the costs of transportation, communications, labor, finance, and office rents in management can maximize the benefits of management. Many companies that are founded on the Internet are just because the management costs of online companies are relatively low, so it is possible to start a business and seek development opportunities on their own.
2) First, using the Internet can reduce traffic and communication costs. For some businesses involving global companies, business personnel and management personnel must maintain close contact with business stakeholders around the world. Many multinational companies’ presidents spend 1/3 of their time on the plane because they have to stop at all parts of the world. Take a tour to understand the progress of your business. Nowadays, using the Internet can solve these problems very well. Through inexpensive communication tools such as E-mail, online phone calls, and online meetings, etc., online communication can be conducted. According to statistics, the emergence of the Internet can reduce the cost of enterprises in traditional transportation and communications. About 30%, this ratio can also increase. For small companies, the Internet has given them a "wing" that they can use to expand their business on the Internet without leaving the house. For example, a young girl in the United States used her family to establish an online flower shop in 1995, and her business was covered. In the United States, what she needs is just a server on the Internet that can accept orders and provide product information, and then hires a few small workers to mail by address. Later, after she and the United States Federal Express Internet connection, she only needs to Order information processing was transferred to FedEx, which sent flowers directly from flower sheds to flower dealers. All this was done online, and the business of the little girl is now booming.
Free Internet phone software can be downloaded on the Internet. This is a very good sound quality free internet phone software. It is also a better type of software that can be used today, from computer to computer, and computer to phone. Computer to computer, in addition to Internet access, local telephone charges, no additional costs, but the other computer needs to install this software, and was on the Internet; computer to telephone, the United States toll is 0.1 US dollars / minute, plus Internet access, the city Internal telephone charges.
3) Second, reduce labor costs. Thanks to the Internet, many of the traditional management processes handled by people can now be automated through computers and the Internet. Or the work that was originally required to be handled by the company’s own staff was changed by the customer himself. For example, the Dell company in the United States started direct selling through direct mail and mail, and then sold direct through the Internet. The user used the Internet to help the computer. The benefits of automatic selection and placing of orders are very obvious. Not only are users on the Internet free to choose, Dell also does not need to hire a large number of telephone attendants to accept orders from customers, but also avoid many unclear factors in phone orders. Improve efficiency while reducing a lot of labor costs. Therefore, the use of the Internet for business management is not only to increase work efficiency, but also to use it to reduce unnecessary personnel in the work and reduce loss caused by human factors.
4) Third, reduce corporate finance costs. Enterprises can produce on-demand, order on-demand, without having to maintain a large inventory, or only maintain a certain amount of inventory for a few special best-selling products, which can greatly reduce the capital occupation, while using the Internet to achieve enterprise management information, networking, can greatly reduce business With regard to general employees, investment in fixed assets, and daily operating expenses, companies can save a lot of money and expenses, so the demand for corporate finance costs is greatly reduced. Because of the use of the Internet, you can use very little money for entrepreneurial development, so when this year is an era of heroes, as long as you have a good "idea" and a small amount of money you can start business development, of course, still need some time to venture capital The intervention helps development, but a good start is half the battle.
5) Fourth, reduce office rents. Through the Internet, commercial enterprises can realize non-store operations, and industrial enterprises can realize non-plant operations. Amazon’s online bookstore, as described above, is a typical example. Since the business is done online, it does not need to rent an expensive office space in a busy area. At present, with the help of the Internet, many companies have moved their offices from the city's bustling hubs to the peaceful suburbs. This not only avoids congestion in the urban areas, but also allows them to work in the environment at a low cost. It really serves two purposes.
6) For productive companies, their products can be contracted to other companies via the Internet. An important economic reason for the traditional "small and complete" business is the difficulty of cooperation between companies. Now, through the network communication technology, the information system of the enterprise and its partners is networked. The cooperation between the enterprises is as convenient as the internal cooperation of the enterprise. In this way, the enterprise can outsource its own products and services that do not have the advantage of comparative cost. "The production of core values" thereby reducing costs. For example, 90% of Compaq's computers in the United States are not produced by itself, but are instead issued to manufacturers for production. Compaq provides technology, software and brands, and then distributes the products directly to users, so the Internet can achieve global production cooperation. , "virtual" production is no longer "virtual".
7) Reduce management levels. Through network communications, the general manager of a company can easily communicate directly with grassroots employees and reduce the middle tier, which not only improves work efficiency but also reduces management costs.
8) Pay attention to the problem. When using the Internet for management, pay attention to the following issues:
First, we cannot simply pursue the reduction of corporate management costs. We need to consider issues from the perspective of improving corporate management efficiency and increasing competitiveness.
Second, when using the Internet to reduce costs through management, it is necessary to pay attention to changing traditional management models and methods, and more importantly, to change the working methods and ideology of managers.
Third, how to use the Internet to reduce procurement costs
1) As the saying goes, “Illness from the mouth†is the same for companies. If the company’s procurement is poorly managed, the raw materials purchased are too expensive or of low quality, and regardless of how they are managed and controlled during the production process, their products will be directly affected. . The reason why the procurement process often occurs is due to excessive human factors and information obstruction, through the Internet can reduce the human factors and information is not unimpeded, to minimize procurement costs.
2) First, the Internet can be used to integrate and process procurement information and order from the supplier in order to obtain maximum volume discounts. Such as the United States Wal-mart is through its retail management information system will be required to purchase the information will be unified to the headquarters, and then from the headquarters and then through the network to the bulk order of suppliers to obtain the maximum benefits.
3) Secondly, by using the Internet to connect production information, inventory information and procurement systems together, real-time ordering can be achieved. Companies can order according to needs, minimize inventory, and achieve “zero inventory†management. This has the advantage of reducing on the one hand Capital occupation and reduction of storage costs, on the other hand, can avoid the impact of price fluctuations on the product. Such as the United States, Dell through its flexible online procurement system, its parts and components inventory time compressed to less than a week, while other computer companies are a month or even three months, which is a one-time price of computer hardware products and declining industry That said, the backlog of inventory means that the price of parts for your product is always higher than the current price, which is why Dell is able to sell at a price 15% lower than its peers.
4) Thirdly, by automating and scientificating inventory and order management through the Internet, human intervention can be minimized. At the same time, procurement can be performed with higher efficiency, which can save a lot of manpower and avoid unnecessary loss caused by human factors.
5) Fourthly, information sharing with suppliers can be conducted through the Internet, which can help suppliers to supply according to their production needs without affecting production and increasing inventory products. For example, the Boeing Company in the United States to meet the needs of airlines around the world for parts and components of the company, set up a webpage for parts and components on the Internet, users all over the world can directly contact suppliers through their web pages to obtain support. The user's service speed and reduce costs, while the user can get the support needed at the fastest speed, avoid excessive intermediate links and achieve zero turnover.
6) By publishing the purchase information and the "real-time video conferencing" system on the Internet, it is possible to allow the global suppliers to quote and sell the price, so that the supplier with the lowest integrated cost can be selected. For example, a Wenzhou self-employed person released the news of buying sharkskin on the Internet for free. Within 3 days, they received quotation from a number of machine manufacturers in Korea, Japan, and Peru. The lowest price was 50 yuan and 1 kilogram in Wenzhou, which was then Wenzhou. The price is 150-200 yuan and 1 kg.
7) Pay attention to the problem. The use of the Internet to reduce procurement costs must pay attention to the following issues:
First, data sharing must be performed with the company's internal management system, especially the inventory system and production system (commercial department is the sales system), so that the procurement department can understand the information on the Internet and order information;
Second, the company's site must set up a dedicated website to provide the type, model, quantity, and delivery time of the products needed by the company, as well as contact information, etc.;
Third, it is best to establish long-term cooperation relationships with a few suppliers, and to achieve the sharing of procurement information and suppliers, to strengthen the mutually beneficial cooperation between the two sides, and to obtain long-term commercial benefits, because 80% of profits come from 20% of profit-producing areas.
First, how to use the Internet to reduce sales costs