Very few people are willing to take losses voluntarily; those who are usually fall into traps. For example, financial schemes, Ponzi schemes, multi-level marketing, etc. From the perspective of the implementers, the first impression is that they will incur losses, while from the consumers' perspective, it initially appears to be a bargain.
Is it true that all losses in this world are scams? Not necessarily, but it is unrealistic to expect someone to suffer losses for a lifetime, so overall, the losses incurred by the implementers are temporary, and in the long run, they tend to stabilize into profits.
Therefore, if the business entity is not a fraud, then taking losses is merely a temporary marketing strategy. Of course, the extent of these losses is not meant to make consumers instantly wealthy; capital is meant to create user dependency and habits, while marketing aims to provide better service.
Thus, the purpose of capital is to "feed the pigs," while marketing generally fails if it is not paired with a service model. However, it should be noted that not every decision-maker can achieve guaranteed results; the same methods can yield vastly different outcomes depending on who is making the decisions and implementing them.
Someone who often says, "I am here to make money; I came to earn your money," may be quite blunt and honest, but at the same time, it negates their ongoing value output. This approach may have been effective twenty years ago, but twenty years later, it only seems childish.
I once had a friend who collaborated with a partner who was said to have come from a state-owned enterprise. In the 1990s, he made some money using a rather rogue approach, so he believed that his methods were still invincible after leaving the state-owned enterprise.
However, he not only failed to solve his partner's problems but also placed greater financial pressure on them, ultimately becoming the last straw that broke the camel's back.
I once mentioned this issue to my friend, but he always believed he could manage it. In the end, I did not see them succeed; instead, the immense pressure and lack of a regular lifestyle led to health issues.
Coincidentally, over a decade ago, when I was still in the agricultural materials industry, my boss, upon first encountering some so-called successful individuals on the internet, began to express his sincere opinion that businesses are not charities. While he was not wrong, it also reflected his dulled perception of marketing; he was unlikely to use loss-leading marketing strategies and would struggle to understand their true essence.
I once visited a relatively large store with him, and he believed that as long as his products were good and he offered satisfactory profit margins, the other party should accept his cooperation. In his view, only monetary benefits were the sole sales strategy.
However, in the past, his salespeople were unable to reach any agreements with this store. When I arrived at the store, I simply observed and concluded that they could not possibly lack essential products. Introducing products often backfired. Therefore, instead of watching them hustle, it was better to get involved, and eventually, they actively requested cooperative products and directly paid for the inventory.
In fact, the other party had no intention of long-term cooperation; it was not a rejection of me but rather a rejection of the company. For long-term cooperation to be established, a continuous bond of scarcity must be built.
So, during the festive season, I specifically called to check in. The other party was very surprised and happy to receive the call, and we envisioned further cooperation. However, at that moment, the leader of the company approached me and began to say that the store had ordered too little on their first purchase. In short, his words were filled with mockery.
The reason for this situation stemmed from our subsequent argument. I believed that the female entrepreneur at the store did not lack product resources but rather lacked a trustworthy cooperative relationship. However, he disagreed and insisted that it was because they valued his products that they made the purchase. Neither of us could convince the other.
Ultimately, due to the market shifting to another relative of his, they could no longer reach an agreement. The notion that products equate to power did not lead to success.
In fact, the agricultural materials market cannot be managed with simple linear thinking. The constant pursuit of simplicity is akin to solving the equation of one plus one equals two every day, lacking necessary presentation skills and failing to establish good cooperative relationships. Ultimately, one can only attempt to manipulate the product, but the problem is that people have always considered products to be the least reliable.
Why do I say this? Because when the product is in your hands, the pricing power is in your hands. If you sell well, you can raise the price; if you sell poorly, you hurt yourself, so it is impossible to purchase a large quantity all at once.
A clear example is a manufacturer that offers cheap raw materials, and the wholesaler sets a relatively low wholesale price for micro-fertilizers, which do not sell well in various regions. However, a newly developed customer in my area sold very well, and their selling price was not low because, from their consumer group’s perspective, a price that is too low often leads to no purchases.
Later, when I promoted in other regions, I also adopted this retail pricing strategy, but they could not understand it. However, after research, I found that this customer was selling well, so the boss immediately raised the price, compressing this customer's profit margin to almost nothing. This action resulted in other regions being even less willing to sell, with direct sales volume approaching zero, and the customer who had good sales stopped ordering after the last batch of products.
At that time, I was present, and this customer casually told me that they could still exchange for a higher price. He kept his word and ultimately exchanged. However, the boss thought this was the customer being dissatisfied with me and scolded me, saying, "They are unhappy with you; do you think you are friends? Not at all!"
I don't know if we are friends, but when I visited him, he even took me to see his new home. Personally, I believe that such a rash price increase is inappropriate. First, the manufacturer did not actually raise prices; there are no walls that do not let air through. Manufacturer salespeople also go to the market, and once trust is lost, it will affect overall cooperation.
Secondly, products should not have a one-size-fits-all pricing strategy; some are core profit products, some are traffic products, and some are products that maintain relationships to promote overall profitability. However, he could not understand the nuances here and insisted on a one-size-fits-all approach, wanting to raise prices further.
I remember once discussing cooperation with a major sales client. After reaching an agreement, during the drafting of the contract, I thought his pricing was too high and inappropriate. However, he did not accept my suggestion but said that by setting a high price, he could wait for the other party to negotiate. As a result, the other party was not naive; upon seeing the contract price, they knew the other party did not have good intentions, and both sides had their own agendas, leading to mutual destruction.
This may have been his past business experience, but what he did not realize was that his experience was based on the fact that many stores were under his company's name at that time, which had a certain degree of coercion, not because this method was effective.
I remember that after a product with foreign roots obtained authorization, he began to implement a pricing strategy. At that time, he sought my opinion. I believed that a fair pricing strategy could quickly push the product to market, achieving market layout when sellers had high expectations. However, he rejected my opinion, insisting on following the foreign product model, charging according to the retail price, and then giving rebates to cooperative stores, as this strategy had been successful for foreign products. Ultimately, the product became overstocked, and coupled with the promoter advertising it as a panacea, it directly killed the product's vitality. At that time, I repeatedly emphasized not to promote the concept of a universal remedy, but he still printed advertisements and banners with the promoter without notifying me, claiming it could cure any disease and was the world's number one miracle drug, a universal remedy!
Looking back now, he was always thinking of methods to control, suppress, and calculate, ultimately shooting himself in the foot.