In today’s international market, simply having a physical factory is not enough. Many bosses and employees in the pet industry believe having a factory gives them a strong position in business negotiations. They think that as long as their product quality is good enough and there is sufficient demand from customers, marketing skills and strategies are not important. However, this line of thinking is flawed.
Firstly, owning a factory does not necessarily imply strength. Secondly, excellent products can capture market share even without the backing of a factory.
The Highest Value Lies in Product Design and Development
For instance, over a decade ago, a friend interviewed at a company called ffid with the naive belief that owning a factory meant strength and credibility. He asked the interviewer if ffid had its own factory. The interviewer responded with a question: “What difference does it make if a company has a factory?” He then explained the entire value chain from OEM factories to design and development (R&D), citing Apple as an example of a company that excels not because it owns factories but because it focuses on design and R&D. Apple’s strategy involves designing top-notch products and outsourcing manufacturing to factories. Design and R&D constitute the most valuable part of the value chain.
Certainly, factories bring economies of scale and production expertise that lower costs. However, the notion of “I have a factory, therefore I am superior” should have been abandoned long ago.
Sales Skills Matter
Some still live in the past, believing that superior product quality and high demand negate the need for sales skills. In today’s fiercely competitive pet market, if your product isn’t on par with Apple’s, there are plenty of competitors ready to fill your place. Thus, sales skills are crucial. For instance, a simple product like a dog leash has over a hundred suppliers on Alibaba. Relying solely on the product is insufficient to dominate the market.
Finding Customers Requires Talent
In B2B business, talent is the most crucial factor. Even if your product is exceptional, neglecting marketing and sales means your salespeople are reduced to mere product presenters. There are exceptions, like Tesla, whose CEO Elon Musk famously claims their products are so superior they require no marketing or sales expenditure. However, such cases are rare in the business world, and no pet export company is as dominant as Tesla. Design flaws and reliance on cheap labor explain why Chinese factories are proliferating yet facing increasing challenges in selling their products.
