The emergence and rise of hard discounters is here to stay. Hard discounting is a business model which tends to offer no real value or points of difference to its customer. It measures itself on pure numbers and high turnover of product, with little or no regard to its end consumer. It factors in high product failure, warranties and non-conformance in its basic high turnover model. In simple terms, products are purchased at a low cost, a basic mark-up is added and customers are enticed through a tsunami of targeted marketing.
However, what are you really purchasing?
As they say, “the poor man buys twice.”
Chances are, you are purchasing product from a seller that has little knowledge of where their product(s) are actually made. In many cases discounters work on a high turnover - low margin model, meaning frequent shipping and consolidation of goods are required to suffice. Normally, this type of arrangement is handled by offshore trading houses who simply source low cost vendors/factories and product, applying the sellers logo and arranging cargo consolidation. Huge pressure is placed on these Trading Houses to meet supply demand. In turn, a single item can be produced by two or three vendors, meaning two or three variants in quality and specification. Trading Houses tend to work on very small margins and survive purely on volume. They are usually provided a very low target price by the discounter. It comes as no surprise that the lowest cost vertical manufactures are assigned by Trading Houses.
Discounters who operate in this fashion tend to have less regard in relation to quality, and add little in the way of innovation and/or value to its product and end user. Rather, they create copies or imitations of leading brands using inferior raw materials and processes. Clever marketing by the discounters then claim to offer like for like product and build quality to leading brands at heavily reduced pricing, yet its own employees have little understanding of its origin. If this was actually the case, then we would all enjoy our new 200 Series LandCruisers or Y62 Nissan Patrols at Great Wall Prices, it’s that simple!
Brands in most cases operate in a totally opposite model. Brands are totally engaged with the entire supply chain, innovation, design, and are committed to delivering reputable product with real value and purpose. Brands invest heavily and are often at the forefront of new technologies, testing, analysing and creating with passion whilst delivering on expectations and experience.
At Darche, we measure our success through feedback and our end users voice and thoughts. Our most important asset is our customer, who’s loyalty and product emotion has delivered Darche the respected brand it is today.
Can we build product as cheap as major discounters?
Absolutely. However, we just choose not to. We will not compromise on quality and manufacturing processes.