Many people have heard: The wool comes from the pig, and the bear pays the bill. But what I want to ask is: Why does the wool come from the pig? Why should the bear pay the bill? If you haven't figured out why, it's just your own wishful thinking. I'm afraid you can only listen to other people's entrepreneurial stories, but you can't copy this story yourself.
Let’s conduct an in-depth analysis of this issue, mainly for the following three reasons:
1. Who is willing to share the cost with you?
The answer is that he is already spending this cost, and has not increased his own costs by helping you share your costs. On the contrary, after the cost is shared for you, the cost for both of you is reduced. Cost sharing actually merges the repetitive actions that both parties are doing at the same time.
The sharing economy that everyone is talking about now is essentially cost sharing. For example, recreating space is actually a private office; for example, some office buildings separate conference rooms on the first floor. If someone uses them, they can just rent them. This is a private facility. Including the express trains we have talked about repeatedly, UBER's examples are all about sharing equipment.
2. How to increase the income level?
We need to increase profit margins. If we only obtain it from direct customers, this situation is often difficult to sustain because you make too much money from direct customers. The ideal situation should be: you only make a little reasonable profit from direct customers, so that you won't make others too jealous and won't attract a lot of people to flock to your business. But beyond that, you have third-party, fourth-party, fifth-party customers, there are tiers of revenue beyond direct customers.
How can this be achieved? The key is to discover the potential value beyond direct customer buying and selling. Since your costs have covered all the costs of doing business with direct customers, you find that all value costs except direct customers are 0.
For example, McDonald’s plate paper. McDonald's has to put a piece of paper on the plate because the plate will look dirty if it is left standing. McDonald's consumes hundreds of thousands of paper plates every day. In other words, this piece of paper will be displayed in front of hundreds of thousands of people every day, so this piece of paper has advertising value, so this piece of paper can be sold to a third party as an advertisement. This is to increase the income level. Because this paper is used in the first place, it does not increase any additional costs for you. The cost for selling advertising yourself is 0.
3. Variable costs tend to 0
Variable costs are the additional costs required for each additional product the company produces or each additional customer it adds. Under the traditional concept, the variable cost of an enterprise will not be 0. For example, if you make water cups, clothes, etc., the final marginal cost is the cost of raw materials. Every time you produce one more one, you will use one more raw material, so the variable cost of a traditional enterprise will not be 0.
But for some digital and information-based enterprises, the variable cost can be 0. For example, no matter how many people watch the seats in a movie theater, a movie is shown every day. One person needs to use it, and ten people need to use it. So the variable cost for the movie theater is 0.
Since the variable cost is 0, this type of company can theoretically provide some products for free. When providing certain products for free, this type of company can completely eliminate some conventional competition methods from the outside world. For example, the free provision of 360 Security Guard completely disrupted a large number of paid anti-virus software.
Let’s go back and look at the original question. You want the wool to come from the pig and the bear to pay the bill. Why? That is, you must gradually transition from the most traditional buying and selling relationship with customers to the value input and cost sharing of new ecological roles. That is to say, it is transformed into a network-like multi-dimensional composite relationship, so that a business model that can increase revenue and reduce costs can be built.
Finally, the analysis of the cost of reengineering revenue ends with a case:
A large domestic group company has more than thirty subsidiaries of various sizes.
Within this group company, the office has a very important function, which is to help subordinate companies apply for various government subsidies and patent certifications, and at the same time find the corresponding government departments to ask for preferential policies for these patent certifications. This is a very traditional function of the office, and it is performed very well. The office uses this function to obtain many preferential policies and subsidies for subordinate companies every year, and creates a lot of non-operating income for subordinate member companies.
Because the company has such ability, it packages this ability and brings it to the market at a price far lower than the market price. In order to give full play to the advantages of this function, the final approach of this group company is to directly waive the service fee. As long as you entrust the company to them, they can help you apply for preferential policies or subsidies for free, and only share 20-30% of the profits from the subsidies and preferential policies. Once this service was launched, it was very popular among small and medium-sized enterprises, and similar competitors in the market simply could not compete with it. Why can this be done? Because this activity itself is a self-owned activity of the group company, without any additional cost, and the additional cost is 0.
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